OneWeb, the government-backed satellite-based broadband internet operator, has struck an agreement with BT that will see the two companies work together to improve rural broadband connections in the UK. OneWeb is building a constellation of satellites in near orbit around the Earth with the end goal of being able to provide a satellite-based broadband service anywhere in the world.

The partnership agreement is a commitment to explore how OneWeb’s satellite broadband technology could improve broadband services in remote rural regions of the UK, which notoriously suffer from slow speeds. BT is largely responsible for the UK’s broadband infrastructure through its Openreach business and is under pressure from the government to improve reliability and speeds across the country.

Britain suffers from one of the widest broadband speed gaps in Europe with cities and major towns usually benefiting from a fast, reliable infrastructure while more remote connections can be poor.

Extending full fibre optic cable infrastructure to rural areas is commercially problematic as there is little prospect of recouping the initial outlay and maintenance costs as there simply aren’t enough users. However, the government now sees high-speed broadband as a core utility that must be provided if more remote areas of the country are not to be left behind economically.

BT last month confirmed an infrastructure investment programme worth billions that will see Openreach extend its full-fibre broadband infrastructure to another 5 million premises across the country. 1.5 million of those premises are located in areas defined as rural. The target is for 25 million premises to be connected by 2026.

OneWeb was last year bailed out by the UK government, which invested £400 million for a 42.2% stake as part of a consortium that also included Indian firm Bharti Global. The satellite internet start-up had failed to raise enough new investment to fund it through to commercialisation and had fallen into receivership. Dominic Cummings, who was chief advisor to prime minister Boris Johnson at the time, encouraged the move. He saw satellite internet as a strategic priority for post-Brexit UK.

Internationally, OneWeb will be a direct competitor of Elon Musk’s Starlink, which has already launched over 1800 satellites into near orbit and has started offering a commercial service to remote areas of the USA. It has also secured a license from Ofcom to offer its broadband service in the UK and is currently testing. Competition between the two rival providers should work to the benefit of UK customers.

BT chief executive Philip Jansen commented on the deal with OneWeb by saying it is

“clear that greater partnership is needed, both with government and within industry, to ensure connectivity can reach every last corner of the country”.