Practice Area Articles

Internet of Things Case Study

December 13, 2020

By Paul Hastings Professional

Building the World’s Largest Satellite Constellation

WorldVu Satellites Limited, also known as OneWeb, is working to build the world’s largest satellite constellation. The OneWeb constellation will initially consist of more than 600 Low Earth Orbit satellites that will offer Internet services continuously to all areas of the earth including to the 3 billion people who currently do not have access to the Internet. With more than 10 terabits per second of aggregate new capacity globally, OneWeb will seamlessly extend the networks of mobile operators and ISPs to serve new coverage areas, bringing voice and data access to consumers, businesses, schools, healthcare institutions and other end users.

Paul Hastings represented OneWeb in connection with raising more than $500 million of equity and in establishing a global corporate governance structure that would allow existing and new investors to both manage the company and work as commercial partners with the company in the construction of the satellite constellation. The investors include Greg Wyler, Founder of the Company, as well as Qualcomm (U.S.), Virgin (BVI), Bharti (Mauritius), Airbus (European), Echostar (U.S.), Intelsat (U.S.), TPlay (Grupo Salinas) (Mexico), The Coca-Cola Company (U.S.) and MacDonald, Dettwiler and Associates (Canada).

The Challenge

The complexity of this cannot be underscored enough. No one has ever attempted as large a satellite constellation or one with so many JV partners. Each rocket launch will carry 35 satellites and it will require 50 launches—the largest launch contract ever—to position the more than 600 satellites. The challenge was developing a corporate governance structure that allowed numerous global investors and strategic partners to have oversight of the company while also permitting them to participate commercially in the development of the satellite constellation (i.e., managing conflicts of interest) and providing enough flexibility to allow for new investors and strategic partners to be added as the project evolves. The partners each had different regulatory requirements and roles in the project, and each wanted unique oversight rights.

The Solution

The Paul Hastings team worked with OneWeb’s management and existing investors to find a way to align the interests of companies from various regions of the world, to design the JV structure to allow for additional partners to be added, and for the project to be completed literally across the globe.

The team created a unique corporate governance structure that facilitated the cooperation and financial and technical resources of numerous global companies. Crafting the governance and investment mechanisms for the company to allow strategic partners to be both investors and commercial partners was particularly original. Each investor has a specific role. For example, Qualcomm is developing the modems that link the land antennas to the satellites, Virgin is providing launch services, Airbus is building the satellites, and Bharti is distributing telecommunications services. Some investors have board seats, others have board observation rights, and others are just investors. In addition, we worked many of the investor's commercial agreements, so that rights granted to one investor do not overlap with another investor and there is a sense of fairness.

Our focus on aligning the stakeholder interests allowed Paul Hastings to more rapidly complete the transactions by resolving business differences and to align business objectives.

Results

The Paul Hastings team successfully designed a structure for the client that enabled them to raise $500 million to develop the satellite constellation. Further proof of success will come as additional investors sign on.

The most satisfying value will come when the project is finalized and OneWeb can execute on its mission to help connect the half of the world that has no way to connect and create an affordable global gateway.