- Daily Zen
South Korean Technology to lead new market trends after investment on OneWeb
Hanwha, a South Korean technology and manufacturing company, has invested $300 million in OneWeb, the UK-backed satellite internet pioneer, picking up an 8.8 percent stake in the company.
This brings OneWeb’s total equity investment since November 2020 to $2.7 billion with no debt issuance.
OneWeb was on the verge of bankruptcy last year, but a joint bid of $1 billion by the UK government and India’s Bharti Global rescued the company.
OneWeb aims to deploy 648 satellites in low Earth orbit to deliver broadband services around the globe. It already has 254 satellites in orbit, and is in competition with Elon Musk’s Starlink to provide low-cost satellite-based internet.
Hanwha’s investment will push OneWeb’s valuation in the vicinity of $3.4 billion. Bharti is investing $1 billion for a roughly 35 percent stake and the UK government, which invested $500 million in the bailout, will hold just under 20 percent. Eutelsat, the French satellite operator, which earlier invested $550 million, will hold another 20 percent.
Hanwha’s investment will fund a second generation of satellites with more advanced communications and positioning capabilities. Hanwha will route the investment through its defense systems division, Hanwha Systems. The group will also acquire a seat on OneWeb’s board.
Hanwha is South Korea’s leading defense supplier and manufacturer and OneWeb hopes to rope in new government customers and an extended geographical reach with Hanwha’s interest in the company.
Neil Masterson, OneWeb chief executive, said Hanwha would also bring “advanced defense and antenna technology” to the group.
For Hanwha, it is a natural expansion, as it already is in the defense equipment manufacturing business. The low earth orbital satellite market is expected to expand from roughly $350 billion in 2016 to as much as $1 trillion by 2040, estimates Morgan Stanley. “To OneWeb’s vision of connecting all the people across the globe, Hanwha Systems’ satellite and antenna technology will bring more advantages,” said Youn-Chul Kim, president of Hanwha Systems.
Hanwha’s investment will relieve the UK government, which was being questioned for investing in a failing company.
Hanwha’s injection was “the latest in a series of votes of confidence in the company from the market”, said Kwasi Kwarteng, UK business secretary.
“The government’s equity stake in OneWeb not only allows the UK to capitalize on our first-mover advantage to deploy low Earth orbit technology but will put our country at the forefront of the small-satellite market, which is set to rapidly expand over the years ahead.”
“With Hanwha alongside, we will be able to access the highest quality of technological thinking and development. They are a powerful partner in our global mission to connect the world,” said Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises.
The investment is expected to be completed in the first half of 2022, subject to regulatory approvals.