OneWeb, the UK taxpayer-backed satellite internet start-up the British government invested £400 million in as a strategic asset and to save the company from bankruptcy, is involved in a standoff with the Russian space agency. A rocket was due to launch from the Russian-owned Baikonur cosmodrome in Kazakhstan tomorrow night carrying 36 OneWeb satellites into low orbit over the Earth.

However, the Russian space agency Roscosmos yesterday demanded the British government give up its stake in OneWeb for the launch to go ahead. Roscosmos also demanded a guarantee from the company that its satellite-based internet service would not be used for military purposes.

OneWeb’s board has responded by voting to suspend all launches from Baikonur and the UK business secretary Kwasi Kwarteng stated that the government supported OneWeb’s position and that Britain was “reviewing our participation in all further projects involving Russian collaboration”.

Kwarteng also confirmed the government has no intention of selling its share in the company, stating “there’s no negotiation on OneWeb”.

That was met with an aggressive response by the Roscosmos director-general Dmitry Rogozin who delivered an ultimatum:

“OK, I give you two days to think. If there are no guarantees of non-military use of the system, there will be no system.”

The worst news for the company is that it will almost certainly lose not only the money paid in advance for the launch but the 36 satellites that were delivered to the cosmodrome located in the wilderness of the Kazak steppes. He said that the money would be held “due to the force majeure created by the aggressive policy of the West and the anti-Russian sanctions”.

The launch was to be provided by the French company Arianespace, which is contracted to carry out all OneWeb’s launches and has already been paid under a contract signed in 2015. They may also claim force majeure but OneWeb will have some confidence a compromise can be reached.

It would take a large dose of optimism for anyone at OneWeb or within government to now expect the satellites to be returned. The UK government’s £400 million stake in OneWeb was acquired in 2020 as part of a joint venture alongside the Indian telecoms conglomerate Bharti Global. Japanese technology investor SoftBank is also a backer as is the French company Eutelsat and South Korea’s Hanwha.

There will now be serious concerns that the presumed loss of the satellites, and that five other launches were scheduled from the same site this year, raises doubts over OneWeb’s future. It plans an initial constellation of 648 satellites, 428 of which are already in near space orbiting the Earth. However, OneWeb’s service will not be able to match that of rivals including Elon Musk’s Starlink if it doesn’t quickly expand its constellation.

Doing so is also not as simple as finding another launch site as OneWeb’s satellites have been specifically designed to be compatible with Russian Soyuz rockets. They will have to be redesigned and money found to cover the expense of new launches. All 6 launches planned from Kazakhstan in 2022 have already been paid for.

Last night Roscosmos filmed and released footage of workers at the cosmodrome covering up the Union Jack painted on the nose cone of the rocket that was supposed to launch the satellites. Rogozin mocked:

“Without the flags of some countries, our rocket looks more beautiful.”