“Space Oddity,” the 1969 song by David Bowie preceded Apollo 11’s moon landing. In this, the first half of the twenty-first century, which numerous experienced observers perceive as the first true Space Age, this melody is still relevant for several reasons, like Elon Musk’s playful nod to it last February during the launch of his new Falcon Heavy rocket and putting into orbit of his Starman at the wheel of a Tesla roadster.
David Bowie’s song isn’t the only oddity we’re seeing in space right now – the world is in the middle of a wild space race between nations and, recently, private actors, something that is totally new.
Amid this nebula of futuristic projects (space hotels, the conquest of Mars, and the exploration of oceans in space), two major ones with philanthropic overtones are particularly attracting the attention of the media, regulatory authorities, investors, and markets.
These two competing projects, Oneweb and Starlink (working with Space X), have the common goal of putting an end to the digital divide affecting close to 4 billion individuals (53% of the global population), by guaranteeing high-speed internet access for all by 2027.
The Solution That Came from Spaaace! … or Satellite Internet
A previous project named Teledesic was created in 1994 with the goal of placing 840 satellites in low earth orbit (altitude of less than 2,000 km) in order to provide high-speed internet. Although it was led by high-profile, internationally recognized personalities, such as Bill Gates, Craig McCaw, and Saudi prince Alwaleed bin Talal, was a failure and was stopped in 2002, after incurring nearly $9 billion dollars in costs and only placing a single demonstration satellite.
Technological innovation, the reduction in the cost of accessing space led by groups such as Space X, and the interest generated by data has shown the possibility of a lucrative business. Thus, many diverse projects have been inaugurated, intensifying the race for internet via satellite or related technologies (solar-powered drones, helium-filled stratospheric balloons, rocket-launching airplanes), with initial launches expected for the end of the year.
Although the trademark Starlink was not introduced until August 21, 2017, this project, which would provide high-speed internet to all, had been suggested by Elon Musk in 2015.
Like its main competitor Oneweb, the idea consists of putting several small satellites (850 lbs.) into low earth orbit by launching them from Space X’s Falcon 9 and Falcon Heavy rockets. The low altitude guarantees a fast internet connection and very low latency – 25 to 30 milliseconds – owing to the short distance the signal must travel in comparison to geostationary satellites. However, the decreased altitude limits coverage, creating the need for a greater number of satellites.
In the next five years, Space X, located in Hawthorne, California, plans to send 4,425 satellites into space to form its first constellation, which is nearly three times the number of currently active satellites! A second constellation of an additional 7,500 satellites in low earth orbit (at altitudes ranging from 335.9 km to 345.6 km) is also expected in the long term, according to information presented to the U.S. Federal Communication Commission (FCC) in May 2017.
To this end, two experimental satellites were put in orbit on February 21, 2018. Space X intends to begin the launches in 2019 with the objective of completing the first constellation in 2024 and thus offer high-speed internet on a global scale.
Space X differentiates itself from its main competitor Oneweb because of its integrated model – the company will manufacture the rockets and satellites it will launch – and because the ITU has yet to assign the company frequencies for its signal distribution.
The Oneweb Project, initiated under the name “WorldVu” in 2014, pursues the same objective of providing high-speed internet access to all at an affordable price as early as 2027. To this end, the Arlington, Virginia based company plans, according to founder and President Greg Wyler, to place three satellite constellations in low earth orbit between 2018 and 2027.
648 small satellites (275 lbs. to 330 lbs.) should be sent into space as the first constellation between 2018 and 2020. In order to achieve this, the company was structured around the key players so as to guarantee the project’s financial stability ($2.2 Billion dollars raised at the end of December 2017) and technical feasibility.
On June 15, 2015, Oneweb announced the formation of a joint venture (JV) with Airbus Defense and Space to manufacture 900 satellites dedicated to the project.
This JV will have to take into account the two major challenges – the expected satellite manufacturing cost ($500,000 dollars) and the constellation deployment timetable, which will require the production of 15 satellites per week, a true break away from the current model which could take months to build a satellite or to paraphrase the official project communication “mass production and satellites have never been used in the same sentence.”
The first ten satellites will therefore be manufactured in Toulouse. The rest of the production will take place at Exploration Park, near the Kennedy Space Center in Florida.
On June 25, 2015, Oneweb also signed a contract with the French company Arianespace to launch an initial subgroup of satellites into orbit on 21 Soyuz rockets (with the option of five additional Soyuz launches and three Ariane 6 launches).
The first launch is expected August 19, 2018 from the Guiana Space Center in Kourou (ten satellites should be put in orbit during this launch, then 32 to 36 satellites during each following launch).
Two other launch contracts have been signed with Virgin Group and Blue Origin LL (Jeff Bezos).
Oneweb’s internet design, development, and infrastructure manufacturing (software, physical) were entrusted to Qualcomm Group, which is one of the project’s shareholders.
Philanthropy or business?
The space race which the key players are engaged is not simply one of philanthropic activities. Underneath the marketing, the financial stakes couldn’t be higher.
The Starlink project’s launch cost is estimated to be $10 billion dollars, but the potential profits are staggering as shown by the Wall Street Journal on January 13, 2017, based on Space X’s internal documents. For Space X, this “satellite internet” activity could result in revenues of $30 billion dollars and operating income between $15 and $20 billion dollars in 2025.
Although these dizzying amounts, which the company never intended to release, and that might have too optimistic in the past, must be regarded with prudence, this activity would represent more revenue than the current core business (launches) in 2020, and nearly 86% of the company’s revenue in 2025.
Morgan Stanley predicted in October 2017 that overall industry revenues would reach $1.1 trillion dollars by 2040, with the provision of satellite internet contributing nearly $412 billion dollars. This would be nearly three times the space industry’s current revenues and satellite internet contribution will be similarly tripled.
It is not surprising that corporate groups, such as Facebook, start-ups and private equity firms have also embarked on the race to provide satellite internet. Welcome to Space Age 2.0!
 According to the latest figures from the International Telecommunication Union (ITU) from June 2016. This entity is a sub-section of the United Nations, in charge of information technology and communication.
 “Whoever gets the most data wins” declared in 2017 Masayoshi Son, the President General Director of Softbank, who is one of Space X’s reference shareholders.
 Compared to 600 milliseconds to date based on existing technology (figures from Space X’s presentation on the project to the FCC)
 At an altitude of 36,000 km
 This is the same altitude as the International Space Station (350 km to 400km)
 Thus, we speak of a fleet of potentially 2,620 satellites in total
 $500 million dollars in January 2015 from, In particular, Qualcomm, Virgin Group, Coca Cola, Boeing, Airbus and nearly €1.7 million euros raised from Softbank in December 2016 and 2017
 “The web enables us all to participate. This is not just our mission, it’s everyone’s.” (Oneweb official website)
 “Exclusive peek at Space X Data shows loss in 2015, heavy expectations for Nascent Internet service” (Wall Street Journal January 13, 2017)
 Michael Sheetz “ Morgan Stanley predicts space industry will triple in size: Here’s how to invest” https://www.cnbc.com/2017/10/12/morgan-stanley-how-to-invest-in-1-trillion-space-industry.html
 Michael Sheetz “ These 90 Private Companies are Reshaping the Space Industry, says Morgan Stanley”
 Andressen Horowitz invested $13.5 million dollars in the start-up Astranis in March 2018