Updated March 5, 2019 with correct OneWeb funding figure.

WASHINGTON — Satellite broadband startup OneWeb, now three months from the launch of its first satellites, is reducing the size of its initial low Earth orbit constellation by a third.

Greg Wyler, OneWeb’s founder, said the company will need only 600 satellites or so instead of 900 after ground tests of the first satellites demonstrated better than expected performance.

“What it does is it lowers the cost structure to reach that first phase of global coverage,” Wyler said in a Dec. 13 interview. “Rarely do you see costs go down, so it’s a pretty big deal.”

OneWeb had been under increased scrutiny within the satellite industry amid speculation that its satellite costs had grown well beyond their initial $500,000 target. Wyler confirmed the satellites had passed $500,000 a unit, but said the exceedance was minimal.

“It is higher than the goal, but it’s significantly lower than where things would have been predicted three years ago,” he said.

Wyler said OneWeb has added back ups for all major components on the satellites, including redundant computers and four reaction wheels per satellite, to improve the reliability of each spacecraft. OneWeb is building its satellites through a joint venture with Airbus Defence and Space.

Wyler declined to quantify how much less the OneWeb constellation will cost at 600 satellites, or to state the full expected cost of the system. OneWeb officials have stated that the satellites are below $1 million each, but have avoided greater specificity.

OneWeb says it has raised more than $2 billion to date from investors including Japanese conglomerate Softbank, fleet operator Intelsat and soft drink giant Coca-Cola. The heavily capitalized startup is seeking to raise the rest of its needs — at least several hundred million dollars if not over a billion based on previous estimates — through export credit agencies, though little progress has been visible since the last equity raise in late 2016.

Wyler said OneWeb “continue[s] to work with the ECAs” and is “very positive” about the process, but declined to give further details.

“OneWeb clearly needs to ensure that its initial constellation is financeable,” Tim Farrar, president of the telecom analyst group TMF Associates, said by email. “That will be easier if overall system costs can be cut by building fewer satellites.”

Adrian Steckel, OneWeb’s new CEO, first mentioned the constellation modification Dec. 12 at the Morgan Stanley Space Summit in New York City, an event that was closed to press.

Farrar said Steckel also indicated that OneWeb’s initial priority would be connecting boats and planes before focusing on internet for the masses.

“It seems likely that these customers would use larger, more powerful terminals compared to a low cost consumer terminal. Thus the overall link performance would be improved and there would be more available capacity per satellite, offsetting any reduction in the number of satellites initially deployed,” Farrar said.

Wyler said 600 is the minimum needed for global coverage. Beyond that, OneWeb is deciding whether it will add 300 first-generation satellites or shift to a second-generation constellation designed to layer on more capacity.

“Our plan is we are first building out for coverage so everyone can have high-speed, low-latency access, and then we have a second generation of satellites which is more focused on capacity, but the capacity will be dynamically placed to the areas where there are customer aggregations with needs for bandwidth,” Wyler said. “Ultimately the system will be extremely large and extremely high in total throughput.”

Wyler said he has “high hopes” that OneWeb will begin service next year, but admitted the service could slip to 2020.

OneWeb’s first 10 satellites launch in February on an Arianespace Soyuz from French Guiana. Arianespace has a contract to launch the bulk of OneWeb’s constellation on another 20 Soyuz rockets.