Coke, Virgin, and Airbus Buy Into the Space Internet Dream

OneWeb announced a massive funding round backed by a prominent mix of global players

Greg Wyler, chief executive officer and founder of OneWeb Systems Inc., center, speaks about a new Internet-satellite network in London, U.K., on June 25, 2015.

Greg Wyler, chief executive officer and founder of OneWeb Systems Inc., center, speaks about a new Internet-satellite network in London, U.K., on June 25, 2015.

Photographer: Matthew Lloyd/Bloomberg

If you’re going to be a wild-eyed dreamer talking about building the Space Internet, it’s good to back up your hype with action now and again. That’s exactly what Greg Wyler and his company OneWeb did on Thursday by revealing a massive funding round and firm contracts to launch hundreds of the company's satellites into orbit around the earth. 

Wyler first presented OneWeb’s plans in January, saying that his company would surround the planet with about 700 satellites by 2019. These satellites would sit in what’s known as a low Earth orbit that would allow them to beam the Internet down at speeds rivaling fiber optic cables. The benefits of such technology are threefold: The billions of people without access to fiber optic cables could receive high-speed Internet for the first time; police and other first responders could create ad hoc high-speed networks during emergencies; and the world would also have, in effect, a backup Internet service. Heady—some might say quixotic—and extremely expensive stuff. 

Wyler, a longtime Internet and satellite communications entrepreneur, had already brought the chipmaker Qualcomm and Richard Branson’s Virgin Group on as investors. On Thursday, he announced that Airbus, Coca-Cola, Bharti Enterprises, Grupo Salinas, and Intelsat would join as investors, as well, in a $500 million funding round. It’s a prominent mix of global players, and one can only imagine the advertising slogans Coke will come up with if it’s able to play a part in delivering the Internet—along with sugar saturated refreshment—to almost every man, woman, and child. 

The funding, though, is blasé when compared with another part of OneWeb’s announcement—the stuff that goes boom. The company has signed a deal with European rocket launch group Arianespace for at least 21 launches from 2017 to 2019 with the option for eight more flights. Because of the huge number of flights, OneWeb will have to rely on launch pads scattered all over the globe, including in French Guiana at the tip of South America and in Baikonur in Kazakstan. Those launches, however, will not be enough to get all of OneWeb’s satellites into space. So the company has signed another agreement with Branson’s Virgin Galactic for 39 launches aboard its experimental LauncherOne. This is a major gamble by both OneWeb and Virgin Galactic that LauncherOne is up for such heavy duty. 

The presence of Intelsat as an investor is another key for OneWeb. The company’s proposed satellite service looks to cover much of the globe but fall short around the equator. Intelsat already operates a large fleet of satellites that provide services—albeit slower ones than OneWeb appears to offer—around the equator. O3b Networks, another company co-founded by Wyler, also has a network of satellites providing high-speed Internet service to equatorial regions, and it’s not hard to imagine a partnership between OneWeb and O3b being formed. 

The funding and launch arrangements complement existing work OneWeb did to obtain spectrum and to contract Airbus to build its satellites. “Together with our committed and visionary founding shareholders we have the key elements in place: regulatory, technology, launches, satellites, as well as commercial operators in over 50 countries and territories,” Wyler said in a statement. “We are committed to solving one of the world’s biggest problems—enabling affordable broadband Internet access for everyone.” In an e-mail, Wyler added that he was off to party with Branson and Will.i.am because that’s what you do after announcing such Space Internet plans. "We have some really good stuff still to come," Wyler added.

These moves put incredible pressure on Elon Musk and his rocket launch and satellite company SpaceX. Musk once considered teaming up with OneWeb but subsequently decided to build his own Space Internet service. SpaceX is in the earliest days of putting together a team to build satellites, and, as things stand, the company would struggle to have enough launch capacity to send up hundreds or thousands of satellites soon, since it has a large backlog of launches for other customers stretching out over the next few years. It’s also unclear how Musk will obtain the spectrum needed for his Space Internet.

What’s more unclear is whether either effort will be feasible or profitable. Both OneWeb and SpaceX are threatening to spend on the order of hundreds of millions, if not billions, on this unprecedented number of satellite launches. In a typical year, a company like Arianespace or SpaceX would be lucky to do a dozen rocket launches each. These companies will seriously need to up their games to meet demand. Once the satellites do get into orbit, OneWeb and SpaceX will need to find customers—quite often in poorer regions of the globe—willing to pay for their Internet service. 

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