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LEOs have a fundamental problem

April 15, 2020

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There was a telling comment made following OneWeb’s Chapter 11 announcement, and it


concerns the all-important cost of user terminals. While rockets were being sent up by OneWeb
and still are by SpaceX (a Starlink flight was scheduled for April 16th but is now delayed).
But Samer Halawi, now EVP/CCO at Intelsat and who worked at OneWeb in 2017, told
trade magazine Space News that there was “no path toward” affordable and sub-$200
home user terminals. He justifiably argues that until there is an affordable home unit
available then the prospects for these Low Earth Orbit (LEO) constellations to get a
return on their huge investments are limited.

OneWeb has often spoken of providing broadband to all humanity. More recently it has
revised that audience and targeting rural communities who would use a village or
community centre as the main hub with re-transmission around the neighbourhood on
WiFi. OneWeb has also targeted the In-Flight consumer as well as ships, governments
and local authorities.

These LEO technologies are extremely sophisticated. They circle the Earth in 90-108
minutes (depending on orbital height). This fast transit over the sky needs a ground
terminal to be able to track the satellite but instantly electronically adjusts to track the
following space-craft in order to achieve constant connectivity. SpaceX, for example, was
at one stage talking about a base station costing $1000 each, and they were hoping that
mass-production would bring this down to nearer $300 each.

Some people argue that the LEO operators were looking to the cellular phone model,
where a phone costs $600-$1000 but this is amortised over a 2 or 3-year contract and
the client pays a simple monthly cost. But few isolated African or Asian individual
potential users could afford the resulting $60-$70-$80 a month cost for a LEO
subscription.
With OneWeb now navigating its bankruptcy ‘debtor in possession’ legal predicament, no
doubt further information will emerge as to its own thoughts on how it planned to square
this expensive circle.

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