HomeMobile EuropeVirgin Orbit looks for buyer in Chapter 11

    Virgin Orbit looks for buyer in Chapter 11


    Bargain for an MNO

    UK start up commercial rocket and satellite venture Virgin Orbit has begun to lay off 85% of its staff and shuttered its operations after running out of money and customers. The company suffered by association with its publicity hungry founder Richard Branson of Virgin Airlines fame. Sadly, many Brits seemed to experience schadenfreude when TelecomTV reported this week that Virgin Orbit had filed for Chapter 11 bankruptcy protection in the US via the Bankruptcy Court for the District of Delaware.

    Under the provision of Chapter 11 the company can continue to operate as a business entity while it tries to find a buyer. “At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalise an efficient and value-maximising sale,” said Virgin Orbit’s CEO Dan Hart in a statement.

    Peter Kibutu, Advanced Technology Lead for non-terrestrial networks at satellite consultancy TTP, believes that consolidation alone will not be enough to achieve the competitive advantage satellite companies need. Satellite providers must do more to innovate and forge partnerships with mobile network operators. Owning a satellite provider would be a great coup for a mobile network operators. Perhaps they could all take an equal stake and enjoy the benefits of shared infrastructure. To achieve integration, satellite internet providers must develop NTNs based on the 3GPP industry standards defined at the end of 2022. This will help with the convergence of NTNs with terrestrial networks, bridging between the networks and a broad range of chipsets and handsets. Ultimately it would help them tackle spectrum constraints.

    Meanwhile Virgin Orbit’s stock price has fallen by 92% just this year and may yet decline even further, which could be a gift to a rival satellite player or a new entrant to the market. The documents submitted to the Delaware Bankruptcy Court disclosed that Virgin Orbit had assets of some $243m and debt of $153.5m as of 30 September 2022. That’s more than six months ago and the company’s fortunes have been on the slide ever since. As investors got more edgy and income dwindled, Richard Branson’s overarching Virgin Group, which has invested over $1bn into the failed initiative, including $60m since November 2022, tried very hard to keep the company afloat but finally admitted defeat saying, “Significant funding was not enough to counter the strong headwinds and liquidity challenges Virgin Orbit continues to face.”

    Virgin Orbit was spun out of Virgin Galactic, Branson’s space tourism company. While Galactic was ahead of its time Virgin Orbit seemed to have a lot more ‘legs’. It’s bad for the UK telecoms market that the UK public didn’t get behind it and give the stuck vehicle a push. The industry needs unity between its players and less self-serving behaviour. The loss of Virgin Orbit may diminish us all.