Is SpaceX's satellite Internet project in trouble?

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Reuters announced on Wednesday that SpaceX CEO Elon Musk had sacked seven SpaceX team directors in his office in Redmond, Washington, in June, to develop the company's satellite Internet project. "Starlink". These directors have since been replaced by others. SpaceX employees, with the goal of staying on track to launch its first series of satellites by mid-2019 and begin operations in 2020.

A SpaceX spokesman said Forbes that last summer, there was a reorganization of two weeks and two employees left on their own. Eva Behrend, spokesperson for SpaceX, then declared Forbes In an e-mail, "Given the success of our recent Starlink demonstration satellites, we have incorporated lessons learned and reorganized to allow for the next design iteration," she said. "It's a very similar approach to rapid iteration in design and testing that has led to the success of Falcon 1, Falcon 9, Falcon Heavy and Dragon."

SpaceX first announced its intention to embark on the satellite internet business in 2016, shortly before the announcement of a round of financing led by Google and Fidelity, which had allowed to raise a billion dollars for a valuation of about 10 billion dollars. Currently, Pitchbook estimates that the company is valued at $ 25 billion. In February of this year, the company launched two Starlink demonstration satellites, which were successfully delivered to orbit, communicated with ground stations and remain operational.

Building a high speed satellite is expensive, but the market opportunities are immense. Nearly half of the world's population still does not have access to the Internet, largely because of the expense and logistical challenges of establishing the necessary fiber optic cable infrastructure in many parts of the world. planet. Satellite internet eliminates many of these problems, opening up a huge potential market for reliable and consistent Internet services. Satellite Internet is traditionally supported by geosynchronous satellites, but their distance from the Earth (over 20,000 km) poses latency problems that make them unsuitable for many Internet applications.

SpaceX is one of the companies competing for the next generation of satellite Internet, which aims to reduce latency by bringing satellites closer to Earth. For example, competitor O3b Networks (now a subsidiary of SES) has satellites in medium Earth orbit. A report by Northern Sky Research suggests that such low-orbit networks could generate more than $ 4 billion in revenue per year by 2027.

SpaceX's Starlink satellites will be in low Earth orbit, about 700 to 800 miles above the Earth's surface, compared to 5,000 miles for competitors like O3B. The strategy of the company will require a lot of satellites. The company announced that when its Internet constellation was completed in 2024, it would have 4,000 satellites, of which 800 would be in orbit by the end of 2021.

These satellites will not be alone either. Other companies are also working on the construction of large satellite constellations in low Earth orbit. OneWeb, co-founder of Greg Wyler, founder of O3b, is one of SpaceX's biggest competitors. OneWeb has raised more than $ 3 billion for its project to build more than 800 low Earth orbit satellites and is also planning to launch satellites next year.

According to Forecast International analyst Bill Ostrove, the Reuters report suggests that Internet satellite launches may be delayed compared to 2019. This is not uncommon for a company run by Musk, which has a long tradition setting strict deadlines, but Ostrove adds that "the fact that people are fired for delays means that the management (ie Elon Musk) is not happy. It is possible that the delays exceed expectations for such an ambitious project. "

Update: This message has been updated since the release with additional details provided by SpaceX.

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Reuters announced on Wednesday that SpaceX CEO Elon Musk had sacked seven SpaceX team directors in his office in Redmond, Washington, in June, to develop the company's satellite Internet project. "Starlink". These directors have since been replaced by others. SpaceX employees, with the goal of staying on track to launch its first series of satellites by mid-2019 and begin operations in 2020.

A SpaceX spokesman said Forbes that last summer, there was a reorganization of two weeks and two employees left on their own. Eva Behrend, spokesperson for SpaceX, then declared Forbes In an e-mail, "Given the success of our recent Starlink demonstration satellites, we have incorporated lessons learned and reorganized to allow for the next design iteration," she said. "It's a very similar approach to rapid iteration in design and testing that has led to the success of Falcon 1, Falcon 9, Falcon Heavy and Dragon."

SpaceX first announced its intention to embark on the satellite internet business in 2016, shortly before the announcement of a round of financing led by Google and Fidelity, which had allowed to raise a billion dollars for a valuation of about 10 billion dollars. Currently, Pitchbook estimates that the company is valued at $ 25 billion. In February of this year, the company launched two Starlink demonstration satellites, which were successfully delivered to orbit, communicated with ground stations and remain operational.

Building a high speed satellite is expensive, but the market opportunities are immense. Nearly half of the world's population still does not have access to the Internet, largely because of the expense and logistical challenges of establishing the necessary fiber optic cable infrastructure in many parts of the world. planet. Satellite internet eliminates many of these problems, opening up a huge potential market for reliable and consistent Internet services. Satellite Internet is traditionally supported by geosynchronous satellites, but their distance from the Earth (over 20,000 km) poses latency problems that make them unsuitable for many Internet applications.

SpaceX is one of the companies competing for the next generation of satellite Internet, which aims to reduce latency by bringing satellites closer to Earth. For example, competitor O3b Networks (now a subsidiary of SES) has satellites in medium Earth orbit. A report by Northern Sky Research suggests that such low-orbit networks could generate more than $ 4 billion in revenue per year by 2027.

SpaceX's Starlink satellites will be in low Earth orbit, about 700 to 800 miles above the Earth's surface, compared to 5,000 miles for competitors like O3B. The strategy of the company will require a lot of satellites. The company announced that when its Internet constellation was completed in 2024, it would have 4,000 satellites, of which 800 would be in orbit by the end of 2021.

These satellites will not be alone either. Other companies are also working on the construction of large satellite constellations in low Earth orbit. OneWeb, co-founder of Greg Wyler, founder of O3b, is one of SpaceX's biggest competitors. OneWeb has raised more than $ 3 billion for its project to build more than 800 low Earth orbit satellites and is also planning to launch satellites next year.

According to Forecast International analyst Bill Ostrove, the Reuters report suggests that Internet satellite launches may be delayed compared to 2019. This is not uncommon for a company run by Musk, which has a long tradition setting strict deadlines, but Ostrove adds that "the fact that people are fired for delays means that the management (ie Elon Musk) is not happy. It is possible that the delays exceed expectations for such an ambitious project. "

Update: This message has been updated since the release with additional details provided by SpaceX.