Within one month of the World Health Organisation announcing the global pandemic, on March 27th the global communications company, OneWeb, filed for chapter 11 bankruptcy. This was followed approximately one month later by satellite communications provider, Speedcast.
Both of these companies are prominent within the maritime industry, providing services to many vessels, and while these announcements were far from positive, it can be argued that the industry could see them coming.
Prior to coronavirus, Speedcast had already been struggling. In March 2020, for example, Speedcast's Board of Directors accepted the resignation of CEO PJ Beylier in light of a disappointing preliminary 2019 Full-Year financial result. This information, accompanied by the termination of the company trading on the stock market, indicated turbulent times.
It is also well-known that Speedcast had a substantial amount of business within the energy industry (such as oil rigs and energy supply vessels), and also provided services to many cruise ships. Pairing together the oil crisis with the temporary lockdown of cruise liners, along with the preliminary financial results of 2019, the filing for chapter 11 bankruptcy becomes more clear.
OneWeb, however, has singled out the coronavirus pandemic as the reason for its downfall. ‘Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding investment that would fully fund the company through its deployment and commercial launch. While the company was close to obtaining financing, the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19,’ read a statement released by OneWeb.
“OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere. Our current situation is a consequence of the economic impact of the COVID-19 crisis,” commented Adrian Steckel, Chief Executive Officer of OneWeb.
While many companies can bounce back from chapter 11, serious restructuring will be required. However, there is no doubt that the services provided by both companies are in high demand. For example, OneWeb’s commercial team had seen significant early global demand for OneWeb’s high-speed, low-latency connectivity services from governments and leaders in the automotive, maritime, enterprise, and aviation industries.
This demand for connectivity delivered from low-Earth-orbiting satellite constellations underscores the tremendous need for high-quality connectivity, especially for rural and under-connected communities worldwide.
If the pandemic has taught us anything, it is how much we rely on high-bandwidth, low-latency communications, cellular communication and the companies that provide this seamlessly to us.
One of the largest players in our market, OmniAccess, has remained buoyant throughout the last few months, remaining sympathetic to peer companies. This could be due to its client base, which largely comprises superyachts, rather than the cruise ships which now sit dormant...
One of the largest players in our market, OmniAccess, has remained buoyant throughout the last few months, remaining sympathetic to peer companies. This could be due to its client base, which largely comprises superyachts, rather than the cruise ships which now sit dormant.
As opposed to the inactive cruise ships, according to a source from OmniAccess speaking exclusively to SuperyachtNews, OmniAccess has seen its superyacht-based clients asking for upgrades to their communications specs on board, and these are reportedly long-term upgrades, suggesting that there are indeed many owners locking down on board their yachts. “These requests have mostly come from the US and remote areas in the Pacific,” added the source.
The upgrades will support the crew and everyone on board, who are now using these services and the bandwidth so much more than usual. It is also essential for many owners who are needing to keep their businesses updated around the world. Our source informed SuperyachtNews that while these upgrade requests would typically happen before the summer season, now that the 2020 calendar is up in the air, the requests are more sporadic.
The ‘new normal’ has been discussed many times in various different industries over the past two months, and it is likely that there will be a ‘new normal’ expectation of service delivery from companies such as OmniAccess, who are allowing owners to keep their businesses afloat while they are working remotely and so far from the office. While these expectations can be met, as affirmed by our source, it is likely that these ‘upgrades’ will only grow, and thus the baseline demand for bandwidth from the client will become ever greater.
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