Elon Musk’s Next Mission: Internet Satellites
Elon Musk’s Next Mission: Internet Satellites
SpaceX, Tesla Founder Explores Venture to Make Lighter,
Cheaper Satellites
By ROLFE WINKLER And
ANDY PASZTOR
Updated Nov. 7, 2014 6:35 p.m. ET
Billionaire entrepreneur Elon Musk shook up the
automotive and aerospace industries with electric cars and cheap rockets. Now,
he is focused on satellites, looking at ways to make smaller, less-expensive
models that can deliver Internet access across the globe, according to people
familiar with the matter.
Mr. Musk is working with Greg Wyler, a satellite-industry
veteran and former Google Inc. executive, these people said. Mr. Wyler founded
WorldVu Satellites Ltd., which controls a large block of radio spectrum.
In talks with industry executives, Messrs. Musk and Wyler
have discussed launching around 700 satellites, each weighing less than 250
pounds, the people said. That is about half the size of the smallest
communications satellites now in commercial use. The satellite constellation
would be 10 times the size of the largest current fleet, managed by Iridium
Communications Inc.
To be sure, the venture would face large financial,
technical and regulatory hurdles, and industry officials estimate that it would
cost $1 billion or more to develop the project. The people familiar with the
matter cautioned the venture is in its formative stages, and Mr. Musk’s
participation isn’t certain.
Messrs. Musk and Wyler are considering building a factory
to make satellites, the people said. One of the people said initial talks have
been held with state officials in Florida and Colorado about locating the
factory.
In addition to Mr. Musk, WorldVu is seeking a satellite
industry partner to lend expertise to the project, this person said.
Mr. Musk’s closely held Space Exploration Technologies
Corp., or SpaceX, likely would launch the satellites, those people said, though
no agreement is in place. SpaceX has launched a dozen of its Falcon 9 rockets
in the past five years and plans more than four dozen launches through 2018. In
September, the company won a $2.6 billion NASA contract to develop, test and
fly space taxis to carry U.S. astronauts into orbit.
Building a plant and testing satellites is a lengthy
process, and WorldVu needs to clear the use of spectrum with other operators.
SpaceX may not have capacity to launch the satellites until the end of the
decade, by which time WorldVu risks losing its spectrum.
A previous satellite Internet startup founded by Mr.
Wyler, O3b Networks, has faced technical problems with the first four
satellites it launched, which likely will shorten their lifespans. Today, O3b
serves large areas on either side of the equator with a constellation of eight
satellites and is planning to launch four more by the end of the year. Mr.
Wyler has left the company, though he remains a significant shareholder.
One indicator of the challenge: Mr. Wyler brought a
similar plan to Google, which prides itself on tackling big problems. Yet he
stayed only about a year before leaving to work with Mr. Musk.
Two people familiar with the matter said Mr. Wyler’s
relationship with Google soured in part because he wasn’t sure the search giant
had sufficient manufacturing expertise.
Google declined to comment.
If Messrs. Musk and Wyler choose to build the satellites,
they would face competition from other makers of small satellites, such as
Nevada-based Sierra Nevada Corp. and Britain’s Surrey Satellite Technology Ltd.
Messrs. Musk and Wyler share an interest in reducing the
cost of satellites.
WorldVu needs a lot of satellites, and could be the
anchor customer for a high-volume, low-cost satellite maker. Mr. Musk changed
the economics of launching rockets by simplifying designs while building engines
and other components in-house.
The smallest communications satellites now weigh under
500 pounds and cost several million dollars each. WorldVu hopes to bring the
cost of manufacturing smaller models under $1 million, according to two people
familiar with its plans.
High costs and limited users have hobbled past efforts to
deliver telephone and Internet service from space. Iridium filed for bankruptcy
protection nine months after it launched in 1998, after attracting few users
willing to pay $3,000 for a phone and up to $7 a minute for calls. Rival
Globalstar Inc. sought bankruptcy protection in 2002. Both re-emerged as
mobile-data providers.
Messrs. Musk and Wyler also may also be able to find
willing investors among technology giants. Both Google and FacebookInc. are
working to extend Internet access to unwired parts of the globe, through
drones, balloons and other means.
Write to Rolfe Winkler at rolfe.winkler@wsj.com and Andy
Pasztor at andy.pasztor@wsj.com
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