UK Parliamentary committee casts doubt on value of OneWeb satellite project

0
33


Even though eminent experts in the field believe there is a gold rush going on in space, with the leading actors in communications satellite rushing to deploy commercial crafts, the controversial OneWeb project, which aims to take advantage of such opportunities, still does not meet the recognised requirements of value for public money, a UK parliamentary committee has been told.

Formed in 2012, OneWeb develops what the UK government claims is “cutting-edge” satellite technology from its bases in the UK and the US. Emulating Elon Musk’s Starlink project, it aims to implement a constellation of low Earth orbit (LEO) satellites with a network of global gateway stations and a range of user terminals to provide an affordable, fast, high-bandwidth and a low-latency communications service, connected to internet of things (IoT) devices, and a pathway for mass adoption of 5G services.

OneWeb is also the developer of a positioning system rivalling GPS and the EU’s Galileo satellite navigation systems, to which the UK was a developer and contributor but has now lost access to after leaving the EU in January 2020. In addition to the UK government, the consortium buying OneWeb is also led by Bharti Global Limited, which is also committing $500m.

Yet, despite laying out aggressive growth plans for the constellation, after failing to find private investment, OneWeb filed for bankruptcy in the US in March 2020. That came as something of a surprise to many in the communications industry, as the UK government revealed that as part of a consortium including Indian comms provider Bharti Global, it was to provide $500m to take ownership of the financially troubled satellite technology provider and deliver the UK’s first sovereign space capability.

However, from its first announcement, the deal has seen many industry analysts question whether any commercial opportunities would be realised from OneWeb. Moreover, in late July, it was revealed that the decision to invest half a billion pounds, like Bharti Global, into the technically bankrupt company was taken against the advice of government advisers.

In what is a rare step for such issues, a ministerial direction on 26 June regarding the purchase from Sam Beckett, acting permanent secretary and accounting officer at the Department for Business, Energy and Industrial Strategy, cast doubt on the rationale for the deal.

In a letter to secretary of state Alok Sharma, Beckett noted that given the time and data available, HM Treasury had not subjected the deal to the scrutiny of a full Green Book compliant business case, including considering whether alternative options for investment might provide a better return. His assessment was that he could not satisfy himself that the investment met official value-for-money requirements. Beckett asked Sharma to recall that, following earlier discussions, he had asked the UK Space Agency (UKSA) to procure a separate independent technical assessment.

The issue regarding the value of the project was central to a meeting of the UK Parliament’s Business, Energy and Industrial Strategy Committee meeting on 17 September which principally set out to focus on the technical aspects of the project. However, technological aspects soon led into the domain of value.

The committee called on evidence from leaders in the UK satellite sector, namely Carissa Christensen, chief executive officer of Bryce Space and Technology, Marek Ziebart, professor of space geodesy at University College London (UCL) and Mark Dickinson, deputy chief technology officer and vice-president of the space segment at Inmarsat.

However, the meeting got off to a bad start when committee chair Darren Jones slammed the UK government for not “authorising” the presence of a key witness. He condemned this as gross interference into the work of a parliamentary committee.

Potential opportunity

Making the case for the advantages that a constellation offer could bring, Christensen noted there was “an enormous potential opportunity” for such services to provide internet connection to those parts of the world currently not on the grid. This was, she said, the aim of the Starlink constellation from Elon Musk’s SpaceX and that being built and designed by Amazon’s Jeff Bezos.

“They see this as an enormous market opportunity because they think they can sell internet services to a huge fraction of the population of the earth who currently don’t have it,” she said. “Whether or not they’ll be willing to pay for it is very much a moot point in that respect, but there is a market opportunity there, and to a certain extent, one which should be seen in the context of OneWeb actually being ahead of that race at one time.”

To this point, Jones added somewhat drily that given he had constituents in Bristol who were desperate for good broadband connectivity, he was sure they would be “thrilled” that sure they’re thrilled, the UK government’s was now in the business of providing internet to the world.

Returning to the issue of value, UCL’s Ziebart described the current satellite business environment as somewhat akin to a mixture of “the wild west without regulations and the Gold Rush”, but after noting the cutting-edge aspect of the OneWeb offer, he couldn’t specifically say that he saw clear guaranteed returns on the massive investment made by the UK government.

“From the point of view of return on investment, I’m personally not convinced,” he said. “But it does depend on what you’re buying, and what you think you’re going to get in return for your money. In terms of being ahead of the race, indeed [it was] doing very well in terms of these launches and its mass production of satellites, but now you have some like Elon Musk who’s entered into the race, and I think characterising it as a gold rush is a good way [to describe] how things are going.

Elon Musk’s launch technology is now superior, and he’s demonstrated that by launching 60 satellites – very, very reliably. The industrial and technological might that is represented by SpaceX is very hard to compete against, but that’s not to say the race is over. But it’s a costly race, and I think those costs are going to carry on rising and rising. I’m therefore not yet convinced of the value of the return on investment.”



Source link