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Investing in Space

OneWeb launches first satellites as global internet race with SpaceX and Boeing heats up

Key Points
  • Start-up OneWeb sent its first six satellites to space on Wednesday.
  • OneWeb plans to launch 650 satellites in an interconnected network, called a constellation.
  • Several other companies are also racing to launch satellite internet constellations, including Boeing, SpaceX and Telesat.
The Arianespace Soyuz rocket carrying the first six satellites for OneWeb.
OneWeb

The race is on to provide the world with high speed internet using next-generation networks of small satellites.

OneWeb sent its first six satellites to space on Wednesday, using an Arianespace Soyuz rocket launched from French Guiana.

Eventually, the startup plans to launch 650 satellites in an interconnected network, called a constellation. Once in orbit, the satellites will provided internet coverage across the entire globe, CEO Adrian Steckel explained to CNBC.

"It's a big launch for us because it makes it real," Steckel said. "These are fully working satellites."

Several other companies are also racing to launch satellite internet constellations, including Boeing, SpaceX and Telesat. SpaceX launched the first two test satellites last year for its Starlink network, which aims to put 4,425 satellites into orbit.

OneWeb has raised more than $2 billion to fund its massive satellite network. Due to the heavy capital and technical requirements of OneWeb's goal, the company has also either partnered with or received investment from SoftBank, Qualcomm, Airbus, Virgin Group, Coca-Cola, Maxar Technologies, Hughes Communications and Intelsat. Despite the big names backing the company, OneWeb has largely remained quiet ahead of this first launch.

"I think a lot of people may have wondered what is going on with us but we've been keeping our heads down and working," Steckel said.

"Our mission is for the OneWeb network to provide seamless global Internet coverage by 2021," the company said in a tweet.

These next-generation satellite constellations are looking to offer speeds comparable to Earth-bound fiber optic networks. But, beyond competing with each other, the likes of OneWeb and SpaceX will be going up against the ground-based systems of telecom giants Time Warner, Comcast and AT&T

"We will become the largest internet provider by square miles covered," Steckel said.

OneWeb has facilities in London and Virginia, and is building a massive manufacturing facility in Florida. Each satellite will be about $1 million to manufacture.

"We're set up for scale," Steckel said. "We can do about two satellites a day at maximum."

To manufacture the satellites, OneWeb created a joint venture with Airbus. These first six satellites were built in Toulouse, France, at the company's facility near Airbus' manufacturing plant.

"We anticipate, with a successful launch, our second launch will be in the fourth quarter of this year," Steckel added. "Then we will be launching once a month for the next two years."

Commercialization

At the Mobile World Congress (MWC) on Wednesday, OneWorld announced its first ever customer contracts.

The company will provide network operator Talia – which mainly operates in Africa and the Middle East – with consumer broadband and community Wi-Fi across several regions. OneWeb is aiming to connect all of Talia's markets by 2023.

In a separate contract with Italian telecom provider Intermatica, OneWeb will assist with connectivity.

"We have significant agreements with both partners, and (we'll be looking to) expand beyond those and gain a good proportion of customers. We want to secure more partners in key markets," OneWeb COO Nicolas Zibell said.

Although OneWeb would not disclose the costs involved in the deals, Zibell told CNBC that both contracts were "substantial."

WATCH: Just what is OneWeb?
VIDEO1:4901:49
Just what is OneWeb?

– CNBC's Chloe Taylor contributed to this report.

Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.