Google invests in satellites to spread internet access worldwide

According to a Wall Street Journal report on sunday, Google Inc.  plans to spend more than $1 billion on a fleet of satellites to extend Internet access to unwired regions of the globe, people familiar with the project said, hoping to overcome financial and technical problems that thwarted previous efforts.

The satellites are likely to be small and high-capacity, and will orbit the Earth at "lower altitudes than traditional satellites," the Journal reported.

The projected price ranges from about $1 billon to more than $3 billion, the people familiar with the project said, depending on the network's final design and a later phase that could double the number of satellites. Based on past satellite ventures, costs could rise.

Google's project is the latest effort by a Silicon Valley company to extend Internet coverage from the sky to help its business on the ground. Google and Facebook Inc. FB are counting on new Internet users in underserved regions to boost revenue, and ultimately, earnings.

Google's Project Loon is designing high-altitude balloons to provide broadband service to remote parts of the world. In April, Google acquired Titan Aerospace, which is building solar-powered drones to provide similar connectivity. Facebook has its own drone effort.

Although an unnamed spokeswoman did not comment specifically on the satellite project, she told the newspaper that Google hopes to bring Internet access to the hundreds of millions of people around the world who aren't currently online.

"Internet connectivity significantly improves people's lives," she said. "Yet two thirds of the world have no access at all."

This isn't the first time that Google's sky-high dreams have made headlines. Last June, Google announced its investment in high-altitude balloons designed to provide Internet service to remote parts of the world; and in April, the company purchased Titan Aerospace, a maker of high-altitude, solar-powered drone satellites.

O3b, in which Google was an early investor, has been working on providing broadband Internet connectivity from satellites weighing about 1,500 pounds each. O3b has been planning to launch about a dozen satellites, aiming to serve large areas on either side of the equator.

Google hopes to cover the entire globe with more, but smaller, satellites weighing less than 250 pounds, the people familiar with the project said.

Jamie Goldstein, an O3b director and a partner at North Bridge Venture Partners, which backs the company, said he couldn't comment on what Mr. Wyler is working on, citing a nondisclosure agreement with Google. An O3b spokeswoman didn't respond to requests for comment.

During a conference in March, Google CEO Mr. Page mused about spanning the globe with Internet access delivered by Project Loon. "I think we can build a world-wide mesh of these balloons that can cover the whole planet," he said, noting that they are cheaper and faster to launch than satellites.

But satellites are more flexible and provide greater capacity. In recent years, costs to build and launch satellites have dropped sharply, according to Neil Mackay, CEO of Mile Marker 101, an advisory firm.

Consultant Mr. Farrar estimated that 180 small satellites could be launched for as little as about $600 million.

If Google succeeds, it "could amount to a sea change in the way people will get access to the Internet, from the Third World to even some suburban areas of the U.S.," said Jeremy Rose of Comsys, a London-based satellite consulting firm

Google also is hoping to take advantage of advances in antennas that can track multiple satellites as they move across the sky. Antennas developed by companies including Kymeta Corp. have no moving parts and are controlled by software, which reduces manufacturing and maintenance costs.