{"id":59735,"date":"2020-05-13T17:05:24","date_gmt":"2020-05-13T09:05:24","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/tom-choi-onewebs-failure-will-dent-new-space-investment\/"},"modified":"2020-05-13T17:05:24","modified_gmt":"2020-05-13T09:05:24","slug":"tom-choi-onewebs-failure-will-dent-new-space-investment","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/tom-choi-onewebs-failure-will-dent-new-space-investment\/","title":{"rendered":"Tom Choi: OneWeb\u2019s Failure Will Dent New Space Investment"},"content":{"rendered":"<p>OneWeb\u2019s bankruptcy follows the demise of LeoSat, creating more fodder for debate on the topic of building successful business models around Low-Earth Orbit (LEO) constellations. <\/p>\n<p><em>Via Satellite<\/em> spoke to Tom Choi, executive chairman of Airspace Internet Exchange and former Satellite Executive of the Year winner about his thoughts on the fate of OneWeb. Choi, a longtime OneWeb critic, coins a new term \u2014 NOOBS: New Opportunities in Old Bad Space \u2014 as he predicts the long-term impact on the industry.  This interview was originally published March 31. <\/p>\n<p>\t\t\t\t<img loading=\"lazy\" width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2015\/01\/bgAepBtnS42ub6cGfTR9_VS_OneWEb_SE_Cover_DGTL-300x225.jpg\" class=\"attachment-medium size-medium\" alt=\"\" style=\"width: 120px; height: auto;\" decoding=\"async\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2015\/01\/bgAepBtnS42ub6cGfTR9_VS_OneWEb_SE_Cover_DGTL-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2015\/01\/bgAepBtnS42ub6cGfTR9_VS_OneWEb_SE_Cover_DGTL-800x600.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2015\/01\/bgAepBtnS42ub6cGfTR9_VS_OneWEb_SE_Cover_DGTL-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2015\/01\/bgAepBtnS42ub6cGfTR9_VS_OneWEb_SE_Cover_DGTL.jpg 1280w\" sizes=\"(max-width: 300px) 100vw, 300px\">\t\t\t<\/p>\n<h3 class=\"fs-5 mt-0\">Explore the OneWeb Special Edition Issue<\/h3>\n<p class=\"mb-0 fs-smaller text-balance\">Check out more from this issue and find your next story to read.<\/p>\n<p>\t\t\t<button class=\"btn btn-primary\" type=\"button\" data-bs-toggle=\"offcanvas\" data-bs-target=\"#offcanvasMENU\" aria-controls=\"offcanvasExample\" aria-label=\"button\" style=\"white-space: nowrap;\"><br \/>\n\t\t\t\tView More <i class=\"bi bi-arrow-right-circle\"><\/i><br \/>\n\t\t\t<\/button><\/p>\n<h3>VIA SATELLITE: OneWeb announced on Friday that it was going into Chapter 11 Bankruptcy protection. What is your reaction to this news? Are you surprised?<\/h3>\n<p><strong>Choi: <\/strong>I am surprised. OneWeb was backed by Softbank one of the most successful investors in the internet and telecommunications sector. Softbank provided somewhat of validation and most importantly financial support. I believe there is an interesting twist to this story however and I don\u2019t believe we have seen the last chapter on OneWeb.<\/p>\n<h3>VIA SATELLITE: We firstly had the demise of LeoSat and now the news on the OneWeb. What does this say about the current state of the satellite industry? Some will say history is repeating itself. Can we argue that this isn\u2019t happening?<\/h3>\n<p><strong>Choi: <\/strong>I have been the most vocal opponent of OneWeb since the original announcement. My opposition was based on technical, regulatory, and logistical reasons. LEO broadband is extremely difficult to implement. Since 2009 there have been over $20 billion in new investments into New Space with these new investors openly giddy about how they are backing \u201cSmarter than (Geostationary) GEO projects.\u201d This arrogance upset me because I know our industry is full of smart and very clever people. History is indeed repeating and once again we see that managing lots of money doesn\u2019t give you any extra IQ points. Needless to say, the wasted investments did harm our industry because after these projects got funded, their sales people hit the road championing their cause adding dissonance to the (Fixed Satellite Service) FSS industry. Many of the customers got confused and decided to forego their GEO FSS network expansion plans. OneWeb\u2019s and other LEO broadband\u2019s demise is not negative to the existing (Mobile Satellite Service) MSS and FSS industry. In fact, it is good that it stops distracting customers of FSS GEO satellites.<\/p>\n<p>LEO broadband is a bad idea whose time came and went over 20 years ago. I\u2019m amazed that LEO broadband was rehashed before they built the affordable consumer terminals. Why build satellites for space when you don\u2019t have affordable equipment on the earth to receive its signals? Today you can build affordable GEO (High Throughput Satellites) HTS at one-tenth the capacity cost vs. LEO broadband. Just what problem are they solving?<\/p>\n<p><script>var AIAD_fcd45f981d570e35cee941b23edc69c7_6a6d0671b052f;googletag.cmd.push(function(){var AIMAP_29b58f13885ebf8ea6b032f958eb0748 = googletag.sizeMapping().addSize([992, 100], [[970, 90], [970, 250]]).addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_737ce075cc05dd766c8f8ea08f3faa73 = googletag.sizeMapping().addSize([768, 100], [728, 90]).addSize([320, 100], [320, 50]).build();var AIMAP_21fe3bcfb86a8660aba4e721ee9338f3 = googletag.sizeMapping().addSize([1200, 100], [970, 250]).addSize([768, 100], [600, 300]).addSize([320, 100], [300, 250]).build();AIAD_fcd45f981d570e35cee941b23edc69c7_6a6d0671b052f = googletag.defineSlot('\/987\/satellitetoday.com\/via-satellite-digital-issue-ads', [ [600, 300], [300, 250], [970, 250] ], 'div-gpt-ad-1774631144891- 0-6a6d0671b0530').defineSizeMapping(AIMAP_21fe3bcfb86a8660aba4e721ee9338f3).setCollapseEmptyDiv(true).addService(googletag.pubads());   });<\/script><script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1774631144891- 0-6a6d0671b0530'); });<\/script><\/p>\n<h3>VIA SATELLITE: Do you think there is any chance a buyer emerges for OneWeb and the system can be revived in any way?<\/h3>\n<p><strong>Choi:<\/strong> I heard that most of the contracts of OneWeb are assignable to its creditor, Softbank. Are the satellites and the filing also pledged to Softbank as well? Perhaps this is the reason why Softbank let OneWeb go under, because it already had access to all the assets through its position as the senior lender. Perhaps OneWeb might be gone but will its replacement re-emerge as SoftbankWeb? Only time will tell.<\/p>\n<h3>VIA SATELLITE: Elon Musk joked at SATELLITE it would be good to have LEO system that doesn\u2019t end up in bankruptcy. Are the only systems that have a chance are the ones with billionaire backers?<\/h3>\n<p><strong>Choi:<\/strong> Masayoshi Son is one of the richest billionaires in the world. If he wanted to he can fund all the OneWeb CapEx himself and perhaps his position as the senior lender will allow him to do that without other pesky shareholders getting in the way. SpaceX will need to raise money from external investors to complete Starlink. The point is not who\u2019s backing it because the means is not the ends. There is no point to launch satellites if you aren\u2019t going to find enough customers to makes it sustainable. LEO broadband is an extremely difficult business for space industry veterans, let alone satellite broadband greenhorns who\u2019ve never sold as much as one kilohertz of capacity to a customer in their past. Maybe that doesn\u2019t matter and Elon and Jeff [Bezos] are infallible geniuses who will both succeed with their LEO projects because they have something that us common people don\u2019t have \u2014 succeeding in anything they aim to do. If they do, they would have my praise and my hope they would focus their next attention on curing cancer and world hunger because we certainly need those problems solved as well.<\/p>\n<h3>VIA SATELLITE: OneWeb cited what is happening with COVID-19 as one of the main factors which led to investors pulling out. Do you think we will see a slew of bankruptcies in the satellite industry as a result of the pandemic?<\/h3>\n<p><strong>Choi:<\/strong> The problem with coronavirus pandemic is that it is challenging not [only] solid businesses that had investment grade credit ratings, but even the stability of sovereign nations. If the current shutdown results in a massive recession or a depression, what happens to our industry, and all other industries, if our customers cannot pay their bills? Yet because the FSS and MSS companies are providing mission critical communications and broadcast services which everyone depends upon, we would be one of the last of the industries to be affected that way.<\/p>\n<p>Nevertheless, any company that was depending upon [venture capital] VC or debt financing will find the next several months extremely challenging. Investment grade corporate bonds are now down 20% or more, and only they will receive whatever liquidity there is in the market. Junk bond recaps and new issuances are off the table. There will be many business models that will not survive this pandemic and the inevitable global recession that will follow it.<\/p>\n<h3>VIA SATELLITE: Greg Wyler often spoke of the mission of O3B and the mission of OneWeb to connect billions of people around the world by satellite. Sadly, is this a mission that simply does not have a business model to be feasible?<\/h3>\n<p><strong>Choi: <\/strong>Having altruistic intentions are broadly good. I believe we should live our lives and dedicate what we are doing for a greater cause than our own lives or greed. I\u2019m not sure how much time people like Greg or others in Silicon Valley have spent in the emerging markets, in the jungle but I can tell you based on my personal experience, you are not solving their connectivity problems by LEO broadband. The low-cost terminals do not exist yet. The expensive terminals they produce requires hundreds of watts, if not kilowatts of reliable and affordable electricity that\u2019s not available in these areas. The tariffs they want to charge $1 per gigabyte or more are too expensive for rural residents in emerging markets. We have to reduce that by one order of magnitude which is possible with GEO satellites. Also, many of these [potential customers] are living in rainforests and jungles. The LEO broadband terminals won\u2019t close a link through thick canopy of vegetation.<\/p>\n<p>You want to play the hero, then go to the jungle and talk to the people and see what they need and what they can afford. Then look up to see if your LEO satellites are visible all the time. Then perhaps they will realize how bad of an idea LEO broadband is for connecting 3.5 billion people. The first company that has a sub-$100 terminal, that doesn\u2019t require commercial power, works all the time and can charge 10 cents per gigabyte will connect the 3.5 billion people. Until your technology does that please do not start and tell the world you are smarter than us.<\/p>\n<h3>VIA SATELLITE: Your final thoughts on the OneWeb news and what it means to our industry?<\/h3>\n<p><strong>Choi:<\/strong> OneWeb\u2019s failure will be very negative for the NewSpace industry. It will drive away many VC investors and LPs that are supporting them. If a project that raised close to $3 billion and was supported by one of the savviest and richest investors in the world cannot succeed, how will others? The failure of OneWeb maybe the beginning of the end for New Space as investor interest dries up. It\u2019s probably a good thing because too many of these New Space projects are all copycats of each other and rehash of old ideas. OneWeb was a rehash of a 20-year-old bad idea called Skybridge. In fact, NewSpace maybe the wrong term, perhaps we should refer these projects as NOOBS: New Opportunities in Old Bad Space.<\/p>\n<p>In all seriousness, it will also negatively affect GEO FSS because investors are not experts so they may lump all the \u2018space\u2019 investments as duds. Immediately after Teledesic, Iridium, Globalstar, ICO, and others went under 20 years ago, there was almost no appetite or investor interest in new satellite projects. Satellite companies languished due to lack of new investment and then it led to a wave of mergers and eventually [private equity] firms came and bought all that was available. I can see there will be consolidation of the big players and the privately held regional operators also. Needless to say, Starlink is a gigantic overhang to the industry and until what happens to that project is clear, people maybe apprehensive about doing any deals.<\/p>\n<p>Nevertheless, just like with the extinction of the dinosaurs came the new age of mammals, with the death of NewSpace (or NOOBS), perhaps we will see the emergence of smarter projects for space. Just like our nimble and smart ancestors that emerged out of the destruction of the dinosaurs, I boldly predict a new era will emerge which smart ideas for space will be more successful: projects that are not rehash of old bad ideas, but new ones that are brilliant not requiring billions of dollars from billionaires, but support from customers who want the services. Frankly, I can\u2019t wait until the coming dawn of \u201cSmart Space.\u201d<strong> VS<\/strong><\/p>\n<p>,<\/p>\n<h2 class=\"widget-title\">In This Issue<\/h2>\n<p>\t\t\t\t\t<!-- post id 291:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img loading=\"lazy\" width=\"300\" height=\"200\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/tob0Ree5SEq6eCB5dCur_ST28_Liftoff-FULL-2-1-300x200.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/tob0Ree5SEq6eCB5dCur_ST28_Liftoff-FULL-2-1-300x200.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/tob0Ree5SEq6eCB5dCur_ST28_Liftoff-FULL-2-1-800x533.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/tob0Ree5SEq6eCB5dCur_ST28_Liftoff-FULL-2-1-640x427.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/tob0Ree5SEq6eCB5dCur_ST28_Liftoff-FULL-2-1.jpg 1280w\" sizes=\"(max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tFrom Liftoff to Chapter 11: Inside OneWeb\u2019s Final Weeks<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n<hr class=\"my-3 d-block d-md-none\">\n\t\t\t\t\t\t<!-- post id 292:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img width=\"300\" height=\"225\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/dLiOaTzTy6N4QbQeb6gZ_VS_OneWEb_Wyler_Opener-300x225.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/dLiOaTzTy6N4QbQeb6gZ_VS_OneWEb_Wyler_Opener-300x225.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/dLiOaTzTy6N4QbQeb6gZ_VS_OneWEb_Wyler_Opener-800x600.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/dLiOaTzTy6N4QbQeb6gZ_VS_OneWEb_Wyler_Opener-640x480.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/dLiOaTzTy6N4QbQeb6gZ_VS_OneWEb_Wyler_Opener.jpg 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tIn the Eye of the Storm: Greg Wyler Breaks Cover to Talk OneWeb<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n<hr class=\"my-3\">\n<p>\t\t\t\t\t<!-- post id 293:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img width=\"300\" height=\"169\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/3iRBM2xfQIWnNIPpZGT6_oneweb34-img-300x169.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/3iRBM2xfQIWnNIPpZGT6_oneweb34-img-300x169.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/3iRBM2xfQIWnNIPpZGT6_oneweb34-img-800x449.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/3iRBM2xfQIWnNIPpZGT6_oneweb34-img-640x360.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/3iRBM2xfQIWnNIPpZGT6_oneweb34-img.jpg 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tIndustry Leaders Sound Off on OneWeb\u2019s Collapse<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n<hr class=\"my-3 d-block d-md-none\">\n\t\t\t\t\t\t<!-- post id 295:  \/code\/wp-content\/themes\/ai-beehive\/template-parts\/content\/post-snippet.php --><\/p>\n<figure class=\"overflow-hidden w-100 me-3\">\n<p>\t<img width=\"300\" height=\"150\" src=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/TSPNnYiYSyrBuBUxwA4c_web.space_.oneweb.stage_-300x150.jpg\" class=\"img-responsive wp-post-image\" alt=\"\" style=\"\" decoding=\"async\" loading=\"lazy\" srcset=\"https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/TSPNnYiYSyrBuBUxwA4c_web.space_.oneweb.stage_-300x150.jpg 300w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/TSPNnYiYSyrBuBUxwA4c_web.space_.oneweb.stage_-800x400.jpg 800w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/TSPNnYiYSyrBuBUxwA4c_web.space_.oneweb.stage_-640x320.jpg 640w, https:\/\/www.satellitetoday.com\/wp-content\/uploads\/2017\/01\/TSPNnYiYSyrBuBUxwA4c_web.space_.oneweb.stage_.jpg 1280w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\">\t\t\t\t\t<\/figure>\n<h3 class=\"fs-4 w-100 line-clamp-3\">\n<p>\t\t\t\tOneWeb\u2019s Red Flags Were Easy to Ignore<br \/>\n\t\t<\/h3>\n<p><!-- .post-snippet --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>OneWeb\u2019s bankruptcy follows the demise of LeoSat, creating more fodder for debate on the topic of building successful business models around Low-Earth Orbit (LEO) constellations. Via Satellite spoke to Tom Choi, executive chairman of Airspace Internet Exchange and former Satellite Executive of the Year winner about his thoughts on the fate of OneWeb. Choi, a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":59736,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-59735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/59735"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=59735"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/59735\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/59736"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=59735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=59735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=59735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}