BUSINESS

Elon Musk and Richard Branson invest in satellite-Internet ventures

Elon Musk, Richard Branson invest in small satellites that could provide a global low-cost Internet service

Two space entrepreneurs — Elon Musk and Richard Branson — are adding satellites to their cosmic ambitions.

In separate announcements this week, the two men said they were making big investments in small satellites that could one day provide a global low-cost Internet service.

Musk, the founder of upstart rocket company SpaceX, was in Seattle on Friday to open a new office where dozens of engineers will work on developing smaller-sized satellites. In an earlier post on Twitter, he explained that SpaceX was in the initial stages of creating "advanced micro-satellites" that would orbit the earth in large clusters.

And on Wednesday, Branson, the British billionaire and founder of Virgin Galactic, said he was investing in a venture called OneWeb Ltd., which plans worldwide Internet service powered by a constellation of 648 small satellites.

Some analysts speculated that Musk could eventually be involved in the OneWeb venture, but neither its executives nor SpaceX would comment Friday about that possibility.

More than half of the world's population lacks Internet access, according to the International Telecommunications Union, an agency of the United Nations. And the success of a satellite venture providing Internet access at a fraction of the price would have broad implications, especially for the poor living in remote locations.

But other companies have tried a similar undertaking before and found the cost far too high.

"It's highly unlikely that you can make a successful business out of this," said Roger Rusch, a satellite industry consultant in Palos Verdes. "It's inconsistent with experience. These people are up against the laws of physics."

SpaceX, which is headquartered in Hawthorne, has already rattled the commercial space business by slashing the cost of launching a rocket.

Musk says he now wants to do the same thing in the satellite market — an ambition that some analysts say could be realized.

Giles Thorne, a telecommunications analyst at Jefferies, wrote in a report this week that OneWeb's plan for a constellation of small satellites in low-Earth orbit was "a compelling combination." Any involvement in OneWeb by SpaceX, he added, would compound the plan's attractiveness, creating "a potentially disruptive" force in the satellite communications business.

On Friday night, Musk was scheduled to attend a private gala at the Seattle Center where SpaceX had put its Dragon capsule, battered from a trip to space, on display.

Musk told Bloomberg News this week that the new Seattle-area office planned to immediately hire 60 engineers. The office's staff, he said, could rise to as many as a thousand people in two or three years.

Smaller satellites are crucial to lowering the cost of space-based Internet and communications.

Current satellites can be the size of a small bus and weigh many tons. Boeing last week unveiled a new smaller and lighter all-electric satellite that it said would save operators millions of dollars, by greatly lowering the cost of launching them to space.

But the micro-satellites would take this further.

Greg Wyler, OneWeb's chief executive, said the new venture's satellites would each weigh less than 300 pounds and cost $350,000 each. He said they would be manufactured quickly, using more of an assembly line approach. Current satellites are manufactured one at a time — a process that can take years — and can cost tens of millions of dollars.

Wyler expects the 648-satellite constellation — which would be 10 times the size of the current largest satellite fleet — to be operational in about four years.

He did not disclose how much money Branson or another new investor, Qualcomm, the San Diego-based computer chip manufacturer, was providing to OneWeb. Branson and Paul Jacobs, Qualcomm's executive chairman, will sit on OneWeb's board.

Branson said the opportunities with an affordable worldwide Internet service were "endless."

"People who don't currently have access to proper teaching will be able to receive educations," he wrote in his blog. "People who want to create jobs will be able to develop new businesses connecting with the rest of the world."

melody.petersen@latimes.com

Twitter: @melodypetersen

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