Author(s): Peter Bryer
Google is working with mutual fund company Fidelity to invest $1 billion into Space Exploration Technologies, a company founded by Elon Musk. The investment gives Google and Fidelity a collective ownership of almost 10% of SpaceX, valuing the private rocket company at $10 billion.
Google's investment is part of SpaceX's general funding. However, the key driver of Google's interest is to back Mr Musk's goal of surrounding Earth with a mesh of thousands of small communication satellites, potentially bringing wireless Internet services to all corners of the globe.
Google is willing to invest in innovative and sometimes obscure ways to bring connectivity to under-serviced regions. Google's Project Loon, for example, aims to bring 3G-like wireless Internet access to disconnected areas using high-altitude balloons. Google acquired Skybox Imagining in 2014, another company with the goal of establishing a network of microsatellites.
Bringing the Internet to everyone, everywhere has been central to Google's long-term mission statement: it's a commendable mission and a smart business-development move, introducing its brand and services to new markets. It's a space race of sorts, with competitors like Facebook with similar ambitions. Facebook has been hiring aerospace engineers, and the company's Connectivity Lab is exploring the possibility of delivering Internet access via jet-sized drones that can fly for months at a time to rain connectivity down on remote areas.
We note that Google is also looking to bring fast Internet to regions that are already well-connected. The company has introduced fibre-based services to a few cities in the US with the aim to set an example for incumbent telecom providers (see Daily Insight: Rainbow Rabbit. Google Fiber Is the Nexus of Broadband Services). Faster connections would enable Google to offer more data-intensive services, including video.
Google's investment and interest in SpaceX provides the concept of satellite access with additional weight, but it's only part of a recent surge of interest in the area. Last week, Qualcomm together with the Virgin Group announced investment in OneWeb, another company aiming to bring to Internet access to unconnected areas through hundreds of low-orbit satellites.
This current flurry of interest and investment in satellite- and sky-based services has the potential to cause disruption for mobile operators, Internet service providers and terrestrial infrastructure suppliers. If the idea does fly, it's unclear whether the revenues of other market players will be affected. It's unlikely in the short term, as the geographical regions to be connected are unaddressable markets where non-terrestrial access appears to be a last resort.
Satellite access has a spotty track record and an association with some dark days in the telecommunications business. In the mid-'90s, for example, excitement about satellite voice and data services fizzled when Iridium began facing technology realities — the service generally required line-of-sight, thus limiting access outdoors, and terminals were bulky and expensive.
The current round of projects is a work in progress, and many of the details of the SpaceX network are still lacking. The company has certainly learned from the failures of similar endeavours, but this is an ambitious long-term project with the backing of companies with deep pockets, patience and vision. It will be interesting to observe developments from a distance. Mobile service operators like Vodafone or telecom equipment makes such as Ericsson certainly shouldn't be dismissive of potential competitive threats or opportunities here. Some legacy providers of fixed voice services weren't paying attention when mobility began to trickle in during the '80s. New wireless access methods are really getting a boost of rocket fuel.
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