The deal will see Intelsat, which specializes in higher altitude geostationary (GEO) orbit satellites, leverage OneWeb’s low-Earth orbit (LEO) satellites, to provide airlines with the best of both technologies — this should in theory mean better performance, coverage, and reliability for aircraft as they move around the globe.
Indeed, the core benefit of a multi-orbit service is that while higher altitude GEO satellites have higher latency data transfers, they can cover wider areas and provide fixed coverage on a specific area; LEO satellites, meanwhile, sit closer to the earth and promise improved latency, however more of these satellites are required — OneWeb currently has around 428 LEO satellites in orbit, while Intelsat has a little more than 50 GEO satellites in operation.
The tie-up, ultimately, means that Intelsat should soon be offering commercial flyers uninterrupted coverage across oceans, polar routes, and everywhere in between.
While the partnership makes a great deal of sense in terms of bringing together complementary services, the two companies have had something of a tumultuous recent past — the path toward today’s announcement has been rocky, to say the least.
Best of frenemies
By way of a quick recap, Intelsat invested $25 million in London-based OneWeb way back in 2015, a deal that included a commercial agreement that apparently gave Intelsat and its customers exclusive access to OneWeb’s services in four markets: the U.S. government, maritime, oil and gas, and — crucially in terms of today’s announcement — aviation. Two years later, the duo announced a $13 billion all-out merger, which soon collapsed after failing to secure enough creditor support. Subsequently, Intelsat sued OneWeb and its investor SoftBank, alleging various breaches of contract and even fraud — the crux of the complaint was that SoftBank’s investment in OneWeb seemingly overrode Intelsat’s existing commercial agreements with OneWeb.
Then in the midst of the global pandemic in 2020, Intelsat filed for Chapter 11 bankruptcy protection, and revealed that it was withdrawing from its legal battle with OneWeb to pursue a more friendly “consensual resolution” with its rival, which — for the record — was also dealing with bankruptcy problems of its own (OneWeb emerged from bankruptcy in late 2020).
Fast-forward to early 2022, and Intelsat emerged from bankruptcy as a private company and less debt, while just last month OneWeb entered a process of merging with French rival Eutelsat in a $3.4 billion transaction.
Founded nearly 60 years ago, Intelsat has emerged as a major force in the aviation sphere. It acquired Gogo’s commercial aviation service back in 2020, with Intelsat now the consumer-facing brand that flyers see when connecting to in-flight WiFi. It’s worth noting that OneWeb also targets the airline industry, and just recently it signed its first such aviation deal with Gogo Business Aviation, which is aimed more at the private aviation sector.
So it’s clear that there is something of a strategy at play here, with each company focused on slightly different verticals. And as the rivals recover from their recent financial woes and embittered court battles, pooling their strengths through partnership will probably benefit both in the long run.
“We are proving that, through the power of partnership, a superior suite of multi-orbit capabilities can be offered to better serve the growing connectivity needs of the commercial aviation industry, delivering the highest value coupled with the lowest risk,” OneWeb’s VP for mobility services Ben Griffin said in a press release.
The two companies said that the new multi-orbit solution should go into service by 2024.
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