Bharti Enterprises: Partner UK Govt in OneWeb Rescue Deal. Who really are they? What does it mean?
Most will already know that the UK Government decided to rescue the ailing OneWeb Satellites, a London headquartered business which has a manufacturing base in the United States earlier this week, in a bid which they shared with equal investment and equal equity share, with Bharti Enterprises, who many of us, have never really given any thought to.
So who are Bharti, what are their aims and how will this impact the UK Government desire for the OneWeb constellation of communications satellites to morph into a sovereign comms, timing and positioning asset.
Who are Bharti Enterprises
Set up by Indian billionaire and entrepreneur Sunil Bharti Mittal in 1976 as an 18 year-old man, the business manufactured bicycle crank shafts for local industry, and within 4 years, Sunil was joined by his brothers Rajan and Rakesh forming an import business for motorcycle parts specialising in electrical generators. "OK so what?!" you might think?
As usual with these stories of huge success, fate was to deal the young company a shrewd blow, and India banned the import of generators. In the only major shift in direction the company has really ever taken, by 1984 Bharti was manufacting push-button phones rather than importing them, and so the communications giant (now the second largest in India) was truly born.
To give us an idea of the scale of Bharti, their ambition and their resources, in 2008 the company was in talks with a South African Telecoms operator MTN, active in 21 countries to buy a 100% stake for $45bn USD which would have formed the largest international buy-out by an Indian firm, but the talks were not concluded successfully. Translated from 2008 12 years ago, that deal would have been worth about 53 and a half billion US dollars today.
So, half a billion to buy a semi-estsblished network of satellites specialising in their area of communications, isn't a big stretch for Bharti. But, this isn't the first time they've done it!
Most of us are scarcely aware that Sunil has been on the board for OneWeb Satellites since 2015 after participation in a $500m investment round which enabled OneWeb to secure 65 launch orders. So now that Bharti have sunk a large part of a billion US dollars, they have a 45% stake in the business and 5 years worth of experience on the board of this London headquartered company.
Also on the board from the same early investment sits UK entrepreneur Sir Richard Branson as a result of Virgin participation. Virgin, Airbus and others such as Hughes Network Group and Coca-Cola remain shareholders within the 10% equity not shared between UK Government and Bharti.
Perhaps interestingly, it has been reported that Bharti, or more specifically, Sunil has been willing to play dirty with the rules, after a 2013 court case (which was dismissed) reportedly did have enough evidence to proceed in trying him for colluding with telecoms officials for additional frequency access. However, sailing close to the wind isn't unusual for successful billionaires, and it is perhaps best not to read too much into the allegations, even if they can be partially substantiated.
What are Bharti's aims through this venture?
Well this is a really important question. As we know, the UK Government is interested in a competitor for the Galileo system operates by ESA (European Space Agency) into which the UK poured a lot of R&D sterling and expertise. Indeed, the large part of the 'secret' technology which the UK is now excluded from using was developed by the UK part of the mission. But let's not go down the rabbit hole on that shrewd blow.
The point is, the UK is a large minority shsreholder in the group, and it wants Satellites to perform functions which are usually conducted by constellations in Medium Earth Orbit (MEO) which is just above 20,000 km above the earth's surface. For those aviation buffs out there that is a whopping 65.6 million feet, about 2000 times higher than most airliners fly.
A bit of context here:
Europe's Galileo will have 30 assets in MEO;
The American GPS network uses a base of 24 with space for another 6 as required; and
Russia's GLONASS operates 24 satellites plus 2 in a testing orbit.
Each of these systems occupies MEO and utilises multiple different orbital trajectories to enable global coverage.
Communications Satellites of the type that OneWeb have developed and launched 74 of (6 for testing purposes but 68 of which are operational) are in a polar Low Earth Orbit (1,200 km; 3.94 million feet; just over 100x higher than our airliners), which means that to achieve coverage of the whole globe, you need many many more satellites.
These satellites are designed to deliver broadband services, a bit like the famous SpaceX StarLink project, although that is placing satellites into often highly inclined versions of an equatorial orbit to form a sort of sphere that rotates around the whole Earth in a West to East direction.
So don't be fooled by thinking that the 68 operational satellites being more than double the number used for navigation much higher up does the trick. The whole constellation will consist of 650 satellites and is thus, just over 10% complete for the initial phase. A further 1980 are planned.
This LEO broadband constellation fits in perfects with Bharti goals, as they recently declared a desire to provide broadband and cell services to remote regions in which construction of hundreds of cell towers is impractical.
Whilst OneWeb employees have confirmed that there is some spare payload capacity in their approx 1 cubic metre satellites it is uncertain if this volume, and the other infrastructure on the assets is capable of maintaining the equipment required to provide timing and location services.
How does this impact the UK Government plan to create a sovereign location, timing and communications system?
It is by no means impossible that this constellation could deliver some, or all of the government's ambitions. However, OneWeb wasn't conceived or designed to fulfil this role.
We have learnt that the satellites already in orbit are not in the optimum orbit for navigation and that half a billion dollars brought OneWeb to the position of having 74 of the minimum required 650 into Low Earth Orbit. It is now suggested that the current satellite design (Comms only) costs only about a million dollars to produce and weighs 150kg.
Several nations already have the capability to boost such a payload into the required orbit, and the UK is hoping to enter this sector from as early as 2022 (see our articles about Skyrora's vertical Launch progress).
However, OneWeb has been launching abourd Russian rockets out of Kazakhstan, 34 assets at a time. That's a payload of 5,100kg to Polar LEO, which no UK launch company is currently on track to achieve. Skyrora's Skylark XL 3 stage rocket is designed to place 315kg into space, which is 2 satellites with space for about 7kg of additional kit onboard, which realistically is plenty, but 2 satellites per launch is extremely unlikely to work out cheaper per kilo to orbit.
As you can see, the route to success is far from clear, but not impossible for the UK Government. The biggest issue standing in their way is that a 45% stake does not give them control of the company's board and thus direction, and to describe such an investment as sovereign is stretching the truth pretty thinly. They will rely on the goodwill of their partner shareholders to bringing manufacturing to the UK as they desire, and to spend the time and resources on researching, developing and launching assets with more equipment and mass than required for OneWeb's core mission.
This has to be in the form of useful business case, so whilst it is entirely possible and indeed probable that the UK will provide itself with a sort-of sovereign system that mimics the big players, that the UK can throw expertise at the problem that could even make the system out-perform her friends and foes alike, it is unlikely to only cost the £400m of tax-payer money which has been sunk into the project at the outset.
We can expect to pay for the priviledge for years to come, and we cannot expect much generosity from Bharti, Coca-Cola or any other business who are thinking about the bottom line in a business which presently hasn't made a penny.