Sept. 9 (Bloomberg) -- Google Inc., Liberty Global Inc. and HSBC Holdings Plc plan to build a satellite network to provide Internet connections in emerging markets.

The system will become operational late in 2010, according to a statement today from O3b Networks Ltd., the Jersey, U.K.- based venture backed by the three companies. Thales SA, Europe's largest defense electronics maker, said it has started construction of 16 satellites for the network.

The satellite order is the first stage of a 500 million- euro ($707 million) project to provide fast Internet connections to countries within 45 degrees north and south of the equator, O3b Networks Chief Executive Officer Greg Wyler said in a phone interview today.

``Google has an interest in boosting the Internet all over the world to reach new masses,'' said Wim Zwanenburg, a fund manager at Bank Degroof Group, which oversees $35 billion and doesn't own Google shares. ``The growth market for Internet and mobile phones is in emerging countries.''

Allen & Co., a New York-based investment bank, is also participating in the project, though it's investing less than the other three parties, said Charles Palmer, a spokesman for O3b Networks.

Together the backers are investing 43 million euros, which is sufficient at this stage, Wyler said. The company needs an additional investment of about 100 million euros and the ``current shareholders are a possible source,'' he said. In addition, the company will borrow about 350 million euros.

O3b Networks, which is owned by the four investors and its employees, plans to provide a high-capacity satellite connection to the Internet on which telephone companies and Internet service providers in emerging markets will be able to build their high-speed mobile and Web-access offers.

Liberty Global is the international cable-TV company controlled by billionaire John Malone. Michael Fries, Liberty Global's chief executive officer, sits on O3b's board. HSBC invested in the venture via its HSBC Principal Investments unit.

O3b Networks said it will offer fiber performance via satellite at prices comparable to fiber in developed regions. 03b stands for the ``other three billion'' people in the world who have limited Internet access.

To contact the reporters on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net; Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net

Last Updated: September 9, 2008 07:51 EDT