Why Sunil Mittal Is Bidding For This UK Satellite Firm

Telecommunications tycoon Sunil Mittal has submitted a bid for OneWeb, the bankrupt satellite firm whose investors include SoftBank Group Corporation, people with knowledge of the matter said. An arm of Mittal's Bharti Enterprises conglomerate made an offer for the London-based OneWeb with backing from the U.K. government, according to the people, who asked not to be identified because the information is private.

The U.K. government plans to commit around $500 million to OneWeb alongside other investors as part of the company's Chapter 11 bankruptcy proceedings, a person with knowledge of the matter said last week. OneWeb has said that bids were due Friday.

Part of the U.K.'s interest in supporting OneWeb is to form the basis for a new national navigation system, after the European Union froze Britain out of the most secure elements of the bloc's project, called Galileo. Prime Minister Boris Johnson is trying to attract fresh foreign investment from countries including India, China and the U.S. to help offset the U.K.'s departure from the EU.

OneWeb makes so-called low-Earth orbit satellites that provide high-speed communications. It faces competition from Elon Musk's SpaceX Starlink project and Jeff Bezos's Amazon-linked Project Kuiper, as well as from incumbents such as Inmarsat, Intelsat SA and Eutelsat Communications SA.

Pandemic Blow

The company has raised about $3.3 billion in debt and equity financing from shareholders including SoftBank, Airbus SE and Qualcomm Inc. since its inception, according to filings. In a March 27 bankruptcy announcement, OneWeb blamed the financial effects and market turbulence related to Covid-19 pandemic for its failure to obtain financing it needed.

Mittal's group controls Bharti Airtel Ltd., India's second-biggest wireless operator. Shares of Bharti Airtel have risen 24 per cent this year, giving the company a market value of about $41 billion. The carrier is the biggest shareholder of Mumbai-listed tower operator Bharti Infratel Ltd.

Other suitors have also been pursuing OneWeb, and there's no certainty the Indian group's bid will be successful, the people said. A representative for Bharti couldn't immediately comment, while a spokesperson for OneWeb declined to comment.

A representative for the U.K.'s Department for Business, Energy & Industrial Strategy declined to comment on any bid.

"We have made clear our ambitions for space and are developing a new National Space Strategy to bring long-term strategic and commercial benefits to the U.K.," the government spokesperson said in an emailed statement. "We are in regular discussions with the space industry as part of this work."

Bharti Enterprises participated in a 2015 funding round for OneWeb alongside other investors including Qualcomm Inc., Richard Branson's Virgin Group and Airbus Group NV. OneWeb formed an alliance in 2018 with partners including Delta Air Lines Inc., Bharti Airtel and Sprint Corp. to allow wireless carriers to extend their service into airplane cabins.