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shrinidhi Rajan made post

Will the acquisition of OneWeb by Bharti Airtel make a different to the company’s value?

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Riya Dwivedi answered.
1 month ago

A consortium led by Bharti Enterprises has won the auction to acquire 20% stake in OneWeb, the satellite broadband operator that has filed for bankruptcy. This has the support of the UK government. The deal will allow OneWeb to complete the construction of a global satellite constellation to provide enhanced broadband services.

OneWeb had filed for Chapter 11 bankruptcy in March after it could not secure the $2 billion funding from Softbank Group. The Softbank had gotten into liquidity problems after its investment in We Work soured. Boris Johnson has pledged £500 million on behalf of the UK government for this deal.

OneWeb has nearly 74 satellites in orbit and plans to launch 550 more by end of 2021. This company was in direct competition with Starlink owned by Elon Musk. Johnson has been backing the Bharti-led consortium to keep OneWeb in the UK. In exchange for the rescue, OneWeb will bring manufacturing of satellites back to the UK.

According to McKinsey, nearly 50,000 low earth orbit satellites are likely to be operating in the next 10 years and the potential for companies like OneWeb could be huge. For Bharti, it is a logical extension to its global telecom and data expansion plans as it looks to expand its telecom footprint globally much beyond the reaches of Africa, where it is dominant now.