PARIS — OneWeb LLC’s June 15 announcement that it had selected European manufacturer Airbus Defence and Space to build some 900 small satellites, most of them in the United States, raised as many questions as it answered.

Among them: Why is a U.S. production facility needed? What are the per-unit cost assumptions for the fleet, and what is the status of selecting launch services? Does the company have a specific plan to deorbit the satellites at retirement? With Airbus now assigned the role of satellite builder in a future joint venture with OneWeb, what is the status of the rest of the supply chain, both for the satellites and the user terminals?

In an interview, OneWeb Space Systems Director Brian Holz addressed these and other issues. Alongside OneWeb founder Greg Wyler, Holz worked on the O3b Networks Ka-band broadband network, which has entered commercial service and has secured satellite fleet operator SES as a key shareholder.

Holz was O3b’s chief technology officer.

Can you confirm that the basic architecture is 648 operating satellites, which when spares are added equals 900 satellites for a future order with Airbus?

Yes, our initial constellation will be 648 satellites but we intend to grow it. So there is an allocation in there for network expansion, and additional allocation for spares as well. We think we can grow from there but that’s what we’re going to start with.

Airbus said the first 10 satellites would be built in France, with the remainder produced in the United States.

That’s correct. We’re looking at a pilot project, which will help us qualify our production methodology and the technologies we want to use. We’ll fly the pilot for a period of time as we ramp up production. We intend to do the pilot in Toulouse, France, at the Airbus Defence and Space facility there. We’re going to incorporate the production line into a factory in the U.S. Right now we’re looking at a couple of different states for the location of that factory. That will become clear in the next couple of months.

Will this decision depend on what advantages are offered by the bidding states?

There are several factors involved. We’re looking for the right location to do the operations of the constellation. For that we need a fairly robust logistics system around it. We have to move the satellites to get them launched, and we want to co-locate other parts of the system there from an operations viewpoint. So location and logistics are very important in the selection process. But obviously we are going to create an opportunity around a lot of high-tech jobs, both with our production factory and with the fact that we plan to have a significant portion of our operations capability located at the same site. Long-term, it’s more than 700 jobs between production and operations. So it’s a fairly significant opportunity and we’re seeing a lot of interest in it. We want to make the right choice and make sure our partners are involved as well. We’re fairly close to finalizing it and I expect it will become clear in the coming months; we’re progressing well.

Why do you need to produce in the United States — for possible U.S. government business?

Once we have successfully demonstrated the production techniques we are going to be creating a resource. We’ll be building these systems at a price point that will be pretty advantageous for seeding new business plans and new missions. The U.S. government, I would think, would be very interested in that capability. The structure of the opportunity we are setting up with Airbus will allow third-party sales and use of the technology that we develop. We’ll sell the capability into other mission areas.

So you’re not talking about a hosted payload for your constellation?

What we’ll have is a very inexpensive platform that can host payloads in and of itself, or implement other small- and medium-size constellations by leveraging the production capability we’ll have.

Is the original idea of a production facility co-owned by you and your satellite prime contractor still the model?

We’ve got a very motivated and interested party in Airbus. We’re very happy to be able to work with them in our project. It will be clearer in future announcements that are coming out, but they’re very much a partner in this, both in OneWeb and in the satellite production. We’re excited about that. If you look at their brand globally and some of the things they do across their business, from a production viewpoint, it is a very good choice for us to assure success in what we need to do for this system.

OneWeb has referred to this in the past as a joint venture.

That’s exactly what it’s going to be. It is a joint venture. That is what we’re implementing. There are a couple of steps to go through before it actually closes, but it’s all documented today and we’re moving forward on it.

What is your deadline with the International Telecommunication Union to begin broadcasting in your selected Ku-band frequencies — what the ITU calls Bringing Into Use?

Our BIU deadline is 2019. But we’ll have systems using this operational frequency before that.

You mean with the pilot satellites, or something else?

The pilots are key to that, yes.

The projected $400,000 to $500,000 cost per satellite — is that aspirational? How should we look at this?

Based on the work we’ve done in the past nine months or so, and in the process we went through in selecting our joint venture partner in Airbus, we are very confident that we can get to numbers like that. We still have a lot of work to do. It’s more than a goal. We’re extremely confident that if we don’t achieve numbers in that range, we’ll be extremely close.

You expect to get to these cost numbers midway through the production run?

Yes. There’s a lot of innovation that can be done in leveraging the production and in process change when you don’t have to design a one-off spacecraft that is more interested in maintaining a heritage approach. Our process is different. We’ve done a lot of work laying out how we approach the problem and we are confident we can get it within the price targets we have.

What is your assessment of the launch services market, which will be a big piece of your capital cost?

We’re really confident with the launch. There are a couple of factors we are looking at. One is price; the other is schedule. It’s sometimes difficult to manage launch manifests. You learn from the lessons of the past. From a manifest control point, the schedule is more of a driving factor than the overall price in terms of our being successful in the end. So we’re going to have a combination of launchers, with a combination of launch pads. We’re fairly mature in our progress in finalizing that. I would anticipate some announcements in due course. But we’re very close.

By September?

By September I think every major piece of our system will be finalized from a partnership viewpoint and the approach we are taking will be very clear.

This is still a 1,200-kilometer orbit?

That’s the operational orbit, a near-polar 1,200-kilometer orbit. We selected it for a number of reasons — to simplify operations, to get the coverage we wanted, to allow us to put the right capacity in the markets we want to serve. So it’s a complex trade we went through.

You went through iterations of fewer satellites in higher orbit, versus more in lower orbit?

We’ve done a bunch of trades around the orbit selection and we’re trying to balance the user terminal complexity with the number of satellites in orbit and then the coverage we want for a certain service level. When you look at what we’re tying to do, getting everything to balance is not necessarily an easy thing. But I think we have a good solution that will allow us to achieve our goals.

At what point do you need to select a terminal manufacturer for an order that in the satellite world is big but that may be small in the broader terminal world?

For the user terminal we are talking about millions. We are actively working with several different kinds of technologies and vendors in that area today. I expect that in the September to November time frame you will see several vendors that will be involved — at least in the first stage of prototyping the technology for us. You know that Qualcomm is involved. They’ve got one of the key aspects of the user terminal, which is the modem chips and the LTE chips for the terminal. There will be other announcements around the antenna technology that we want to use in those terminals. It’s looking very promising. We have some very aggressive cost targets there but we’re confident we can get there.

These are 150-kilogram satellites at a 1,200-kilometer orbit. What is their service life?

We’re balancing the total life cycle cost of the system. You have to look at reliability in making your choices there. The life cycle cost is still going to be dominated by launch, no matter how cheaply we can find the launch vehicles, at least in the near term. So that drives you to put reliability into the system. We’re trying to balance all that. We believe we will end up at a minimum with a five-year design life on these satellites. We expect to achieve better than that as we go through the detailed design. It doesn’t really work with a single-string, throwaway satellite. You can’t design a system like that today because you are still dominated by launch costs.

So the business model of U.S. Earth imaging satellite constellation operator Planet Labs won’t work here.

No, we need a reliable satellite system to provide a reliable service to customers.

But you reckon that five years is solid — there’s upside from there but the five-year life is a minimum?

Our design today at least supports that. It’s going to come down to sizing the consumables to get a longer life. I believe we’ll achieve much better than that for the per-satellite launch mass and launch volume that we’re trying to achieve.

At 1,200 kilometers, do you need radiation hardening, or will putting the sensitive components deep within the design be enough to avoid the radiation issue?

You want to consider radiation in terms of how things degrade over time. Yes, the industry traditionally used models that were conservative with significant margins in there. There’s a lot more data today. The models, even since when we designed O3b, have gone through another update. So we can be a little more accurate about the environment and the margins we use in the design. It’s also very specific to the orbit you pick. Our orbit is more conducive to proton radiation than electron energy total dose. So you achieve a certain amount of shielding with that, and then you put the electronics on the inside of the spacecraft. We’re taking careful consideration of this in the design. We want to leverage the use of more commercial parts. We’re qualifying those as we go along.

What is your plan for deorbiting the satellites at the end of their service lives?

We intend to be very good stewards of space. We’re actually designing the system to have higher reliability in the deorbit process, to assure we can successfully deorbit at the end of life. It is a big driver in our design. We’re not discounting that and we don’t intend to create a bunch of junk in orbit. We’re putting the resources into the design to allow us to re-enter a spacecraft at the end of life, and we’re designing the reliability of the system appropriately to allow that to happen. We’re also likely to put some features on the spacecraft that will allow future services to go up and remove spacecraft in those low-probability occurrences where we may not be able to bring something all the way down, for one reason or another. We’re being very proactive in that. You will see we are handling this in the most proactive and positive way that we can.

It’s an issue that has raised concerns.

Absolutely, and we have been concerned about that. Whenever you design an architecture like this, [debris mitigation] has got to be at the top of the list of what you try to accommodate in the design. I want to make it clear: We have no intention of launching a bunch of stuff and creating a bunch of debris. We’re going to be very, very proactive in that area.

So you’re saving enough propellant at the end of life to force the satellite down low enough so that it re-enters the atmosphere within 25 years, as per current recommendations?

Yes, but right now our models show we can bring them down in less than two years. We’ll probably do better than that, but in some of the scenarios we’re looking at, it’s two years. We’ll have the reliability in the deorbiting system to give us high confidence that we’ll be able to bring down all but a few. In those cases, we’re going to design features into the spacecraft so that we can go remove them as we evolve the system going forward.

You’re optimistic about an active debris removal system becoming commercial in the relatively near term?

There are things that are being done, and have been demonstrated in space already, that will enable a deorbit service. It’s just creating a commercial business around it that’s viable. We’re hopeful that we’ll be able to see that as our business plan evolves.

Can you explain the timing for the June 15 announcement? This is not a good time to be looking to the U.S. Export-Import Bank as an option for loan support, which I presume you are. Ex-Im is facing a challenge in the U.S. Congress for its reauthorization, which must occur by July 1.

We didn’t think about export credit agency financing in the timing of the announcement. It was really that we had this process going since last October. We have a very interested supply chain wants to participate in this. So we wanted to get the selection announcement out of the way. There will be several other announcements coming about financing and other partnerships in the project as we move to September. But for the satellite process, it was time to reveal a partner there. We have some events scheduled between now and the fall about our supply chain. We’ll have industry days both in Europe and the U.S. We’ll have supplier meetings in the U.K., and meetings with ESA [the European Space Agency] as well. We have a choreographed sequence of events to pull the right partners into the satellite side of the project and it was just time to reveal that so we could get momentum behind it.

And on export credit financing?

Obviously we will be pursuing export financing for a project like this. Our target has been to make this project as global as we could. That includes the participation in it. We didn’t want to create a company that looked like it was coming from one place. To be successful on a global basis, you have to do a lot of things to make that happen. You’ll see that in some of the announcements going forward. It’s important that we have global participation for us to be successful.

For export financing on the satellite production side, it looks like Ex-Im and little else, doesn’t it? It’s hard to see France’s Coface export credit agency backing a project where most of the production is in the United States.

You can create a business in a number of ways and have factories in different places. How you structure things financially is a big consideration. Coface has been visionary in this. Ex-Im became very aggressive and it has been successful for U.S. companies. There are always a couple of bad cases that can change that thinking, but for the most part the export financing has been very successful. With the pedigree of Greg and myself with O3b, and being successful in managing that, we think we’ve got the ability to work through that process. So we’re hopeful it will be there, but there are other ways to raise money. Once the total package of our company is revealed, it will be obvious that we have a very, very good chance of succeeding.

So if Ex-Im is not reauthorized and is put on ice for at least several months, that will not affect your plans?

We’ve anticipated some of this. If you remember O3b, we secured the export financing when all the capital markets had seized up. It took us longer. We have structured the project as we go forward to give us a good bit of time. A financial package will require some time to close. But we’ve learned a lot about how to do that. We’re confident in how we have structured everything from the pilot program to the production program that we’ll be able to secure adequate funding for each step we have to go through. We have timing inside the plan to allow that to occur.

You don’t need a full financial package secured before Airbus begins work on the pilot satellites?

That’s correct.

Do you need further financing to convert the Airbus agreement into an actual contract?

No.

Why is it not a contract yet?

We’ve been working hard the last three months getting everything in place. There are a couple of things we have to go through. Closing it all, and setting up a joint venture company with Airbus, means we need to go through those steps. The first step was to announce they had been selected. Other events will occur in the next couple of months.

Airbus announced the creation of its own venture capital fund in Silicon Valley, with an initial $150 million in financing, just a couple of weeks before the announcement of its agreement with you. Was that a coincidence?

They are very interested in leveraging their capability in Silicon Valley from an innovation viewpoint. This is one means of showing they are doing that. They have been very aggressive about this since I first talked to them in September of last year. They bought off on what we’re trying to do. They pursued it extremely aggressively and put together a fantastic proposition for us. I think they did that on the merits of our business case. I think they are looking long-term to Silicon Valley to create a larger presence in the U.S. and that’s an important statement on their part. This project will allow them to create an anchor and create new value. Our system, not just for OneWeb, will be able to offer an exciting opportunity that will allow things to happen in the States that could not be done before because of the overall cost of entry. This will help bring down those costs and hopefully will create some new businesses out there. Having a presence in Silicon Valley will allow them to leverage that.

Even if the satellite production plant is not in Silicon Valley given the prevailing costs there?

No, we won’t have a production plant in Silicon Valley. I don’t know that that makes too much sense from a business perspective. But we’re definitely going to have a strong presence in Silicon Valley. There are a lot of assets there that this system is going to require. We’ll have a presence out there to help secure the talent base that is out there. But from a manufacturing standpoint, it doesn’t necessarily make sense.