Mit­tal looks to stars with OneWeb in­ter­net plan

In­dian en­tre­pre­neur and Gov­ern­ment seek to rev­o­lu­tionise broad­band with satel­lite sig­nals, say Lau­rence Dodds and Matthew Field

The Daily Telegraph - Business - - Technology Intelligen­ce -

In 1976, fresh from grad­u­at­ing from Pun­jab Univer­sity, Su­nil Bharti Mit­tal bor­rowed the equiv­a­lent of £1,200 from his fa­ther to start his ca­reer mak­ing bi­cy­cle crankshaft­s. Four decades later, he is the owner of a sprawl­ing con­glom­er­ate span­ning tele­coms, fi­nan­cial tech­nol­ogy and real es­tate, with a per­sonal net worth of more than $11bn (£9bn). As of June, he is also the man whose hands share the tiller of Bri­tain’s lat­est na­tional ven­ture into space.

On Fri­day, The Daily Tele­graph re­vealed that a con­sor­tium com­pris­ing Mit­tal’s Bharti En­ter­prises and the UK Gov­ern­ment had out­bid their ri­vals to take pos­ses­sion of OneWeb, a bank­rupt satel­lite com­pany head­quar­tered in Lon­don, in one of Bri­tain’s big­gest pri­vate sec­tor deals since the last crash.

The deal gives both the UK and Bharti a 45pc stake for $500m each, while the other 10pc re­mains with ex­ist­ing in­vestors. As well as giv­ing both the UK and India a hand in de­liv­er­ing a sys­tem that could con­nect bil­lions of peo­ple to high speed in­ter­net from space, the deal could also see a new com­mon in­ter­est forged at a time when Bri­tain is on the hunt for eco­nomic partners post-Brexit.

“I am de­lighted that Bharti will be lead­ing the ef­fort to de­liver the prom­ise of univer­sal broad­band con­nec­tiv­ity through OneWeb, with the ac­tive sup­port and par­tic­i­pa­tion of the Bri­tish Gov­ern­ment,” Mit­tal said.

“OneWeb’s plat­form will help to re­duce the ‘dig­i­tal di­vide’ by pro­vid­ing high speed, low la­tency broad­band ac­cess to the poor and hard-to-reach ru­ral ar­eas … as one of the largest tele­coms op­er­a­tors in India and Africa, I know what a pow­er­ful so­cial and eco­nomic en­abler this can be.”

OneWeb, along with ri­vals such as Elon Musk’s Star­link, be­lieve that low-earth or­bit (LEO) satel­lites, ar­ranged in “con­stel­la­tions” be­tween about 300 and 1,200 miles up, could bring Earth’s “last bil­lion” in­ter­net users on­line by blan­ket­ing even the loneli­est moun­tain with in­ter­net sig­nals from space. On that front Mit­tal’s in­ter­est is ob­vi­ous: Bharti Air­tel, his $40bn flag­ship com­pany, is India’s sec­ond big­gest telecom­mu­ni­ca­tions firm, hold­ing about a third of its mar­ket with 320m cus­tomers. In­deed, its shares in­creased by 4pc on Fri­day af­ter the deal was con­firmed.

Bharti was al­ready an in­vestor in OneWeb, which col­lapsed in March af­ter its key back­ers pulled out. The deal helps save that in­vest­ment with a ma­jor gov­ern­ment tak­ing a vested in­ter­est in OneWeb’s suc­cess.

But Mit­tal may have deeper mo­tives too. Ac­cord­ing to Abishur Prakash, head of the Toronto-based Cen­tre for In­no­vat­ing the Fu­ture, the deal is prob­a­bly driven by three let­ters: not LEO but Jio, the in­sur­gent low-cost phone tele­coms firm that has risen to be India’s big­gest mo­bile op­er­a­tor in only four years. “[Jio] started off as a very af­ford­able mo­bile sub­scrip­tion com­pany,” says Prakash, “and now it’s branched off into every­thing from e-com­merce to even think­ing about a dig­i­tal cur­rency. What Jio is do­ing is forc­ing all of these other ma­jor In­dian telecom­mu­ni­ca­tions com­pa­nies to start think­ing and act­ing big­ger. OneWeb is one way for Air­tel to di­ver­sify its holdings.”

Mit­tal’s purse-strings may have been loos­ened by the news that Face­book had taken a gi­ant $5.7bn stake in Jio’s par­ent com­pany with plans to in­te­grate the lat­ter’s new on­line gro­cery ser­vice into the for­mer’s pop­u­lar What­sApp.

Satel­lite in­ter­net would also dove­tail with Air­tel’s sub­stan­tial foot­print in Africa. Ac­cord­ing to the re­search firm Om­dia, it is the con­ti­nent’s sec­ond big­gest mo­bile op­er­a­tor with more than 100m sub­scribers across 14 coun­tries. Africa’s pop­u­la­tion is pre­dicted to more than dou­ble by 2050, yet its in­fra­struc­ture re­mains patchy. These fac­tors help ex­plain why Mit­tal was will­ing to in­vest so sub­stan­tially. Prakash, how­ever, be­lieves there is a big­ger con­test afoot.

“Just like in the 20th cen­tury, when the US and a few other coun­tries dom­i­nated in­for­ma­tion tech­nol­ogy through un­der­wa­ter in­ter­net ca­bles around the world, the next in­ter­net ca­bles are be­ing built in space,” he says. “The na­tions that can con­trol the in­ter­net and beam it down will have im­mense geopo­lit­i­cal power … right now every­one is wor­ried about Huawei.”

If the model works, in­di­vid­ual LEO cor­po­ra­tions might find they can com­pletely by­pass ex­ist­ing in­ter­net cen­sor­ship regimes such as China’s “great fire­wall” or Iran’s US-built SmartFil­ter sys­tem. That could give the likes of Elon Musk or Jeff Be­zos, who are both build­ing their own in­ter­net con­stel­la­tions, the power to uni­lat­er­ally bring pop­u­la­tions on­line. OneWeb is there­fore an im­por­tant as­set in the new “great game” play­ing out on the edge of Earth’s ex­o­sphere be­tween com­pet­ing nav­i­ga­tion, sig­nals and ob­ser­va­tion net­works.

The com­pany has also been touted as of­fer­ing a sys­tem that could ri­val GPS. The UK Gov­ern­ment hopes to use OneWeb’s low or­bit satel­lites to pro­vide a form of backup to satel­lite nav­i­ga­tion tech­nol­ogy. It will align the UK closely with its South Asian ally af­ter it was booted out of the EU’s Galileo sys­tem as a re­sult of Brexit.

In a re­port last year, the Com­mons’ for­eign af­fairs se­lect com­mit­tee called for closer ties with India to head off geopo­lit­i­cal threats.

China, India’s re­gional ri­val, is heav­ily in­vested here, through its new BeiDou po­si­tion­ing sys­tem as well as other pri­vate and pub­lic in­ter­net con­stel­la­tion projects.

Mean­while, India re­cently banned 59 Chi­nese apps as part of its re­sponse to clashes be­tween the two coun­tries on the Himalayan bor­der re­gion of Ladakh. “India is now cham­pi­oning its tech­nol­ogy firms to put India first,” says Prakash. “India does not want to be de­pen­dent on SpaceX, or any­one else for that mat­ter, for in­ter­net … and so In­dian com­pa­nies may be now think­ing in a far more na­tion­al­is­tic way than be­fore in or­der to build that au­ton­omy and independen­ce.”

OneWeb there­fore puts Mit­tal along­side Bri­tish of­fi­cials at the helm of what might just turn out to be a gen­uine strate­gic com­peti­tor to Amer­i­can, Chi­nese and Euro­pean satel­lite con­stel­la­tions.

That would ob­vi­ously please Do­minic Cum­mings, in­tent on se­cur­ing the UK’s tech­no­log­i­cal independen­ce; it would also seem a good fit for Mit­tal, who has spo­ken of his hopes for India to ben­e­fit from Brexit and floated part of Air­tel on the Lon­don Stock Ex­change.

Ruth Kat­tumuri, co-di­rec­tor of the India Ob­ser­va­tory and a pol­icy ex­pert at the Lon­don School of Eco­nomics, says the deal gives the UK a chance to part­ner with India at a time when the na­tion is grow­ing ever more am­bi­tious in its own hi-tech econ­omy.

“India’s space mission is the cheap­est in the world,” she says, “and the UK needs to have part­ner­ships for its own space ex­plo­ration. Over the last 10 years the UK has been grow­ing its science and tech­nol­ogy projects with India, but this is re­ally go­ing to ex­pand in the fu­ture.” There are still ques­tions over whether OneWeb will suc­ceed. It has al­ready col­lapsed once, and low-or­bit satel­lite con­stel­la­tions are hugely ex­pen­sive. What­ever those prospects, the UK is now bound to the am­bi­tions of one of India’s tech­nol­ogy su­per­pow­ers.

‘I am de­lighted that Bharti will be lead­ing the ef­fort to de­liver the prom­ise of univer­sal broad­band con­nec­tiv­ity through OneWeb’

‘The na­tions that can con­trol the in­ter­net and beam it down will have geopo­lit­i­cal power ... right now every­one is wor­ried about Huawei’

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