It’s A Small World

It’s a Small World

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When one of the first popular web-browsers, Internet explorer, was created in 1995 less than 1% of the world had internet connection. Today that number has increased to just over 3.5 billion.[1] Still under 50%, the number grows by the second. British Tech Startup OneWeb was founded with the mission to provide internet access to every developing and emerging country and community in the world.[2] OneWeb’s 2018 plan to launch 10 satellites into orbit will provide global users with “low latency broadband access as early as 2019.”[3] By 2022 they hope to link every school, currently not connected, to the internet. The internet has become a necessity in our everyday lives. In a world where information is expected to be sent and received instantaneously, one would struggle to operate a business without access to the internet.

On Monday December 19th the company announced it will receive a $1 billion investment from Japanese Telecommunication company Softbank.[4] The investment is part of a $1.2 billion fundraising by OneWeb, with the remaining $200 million funded by its current investors.[5] This money will help launch hundreds of satellites in the near future.

Founder and Chairman Greg Wyler writes on his website (and is quoted in the Wall Street Journal) that he hopes to fix “the digital divide” by 2027.[6] In the same article he

Says he expects 100 million subscribers by 2025.

Following the trend of smaller, more compact satellites, OneWeb has been able to create 3,000 American manufacturing and engineering jobs in their Florida plant.[7] The company also projects it will be able to construct 15 satellites per week at $600,000 each.[8] This is substantially cheaper than the high orbit $100 million medium-sized satellites “used by communication stations.”[9] And while an individual small satellite may not match all the capabilities of larger ones, it does offer the company flexibility in achieving its launching goal of more than 640 satellites by the beginning of the next decade.[10]

This project will help level the playing field. By offering affordable and accessible internet access to the world it will help ensure even less is lost between the cracks. Internet access offers users a platform to launch their ideas to the world. Currently only 40% of the world has that ability. Increasing that community will increase human capital; will increase investment opportunities and intellectual trade.

 

Ari Goldfarb is not affiliated with Raymond James. Views expressed are the opinions of Ari Goldfarb and the Financial Advisors at Goldfarb Financial and not necessarily those of Raymond James.

[1] http://www.internetlivestats.com/internet-users/

[2] http://oneweb.world/#need

[3] http://oneweb.world/#need

[4] https://www.washingtonpost.com/news/capital-business/wp/2016/12/19/british-satellite-firm-oneweb-picks-up-1-billion-investment-from-japans-softbank/?utm_term=.a016e0144d06

[5] http://fortune.com/2016/12/19/softbank-oneweb/

[6] http://www.wsj.com/articles/satellite-startup-oneweb-raises-1-2-billion-in-funding-round-led-by-softbank-1482142137

[7] http://www.wsj.com/articles/satellite-startup-oneweb-raises-1-2-billion-in-funding-round-led-by-softbank-1482142137

[8] https://www.washingtonpost.com/news/capital-business/wp/2016/12/19/british-satellite-firm-oneweb-picks-up-1-billion-investment-from-japans-softbank/?utm_term=.5113fbdab5c3

[9] http://www.cbsnews.com/news/united-launch-alliance-reveals-launch-costs-with-rocketbuilder/

[10] http://www.wsj.com/articles/satellite-startup-oneweb-raises-1-2-billion-in-funding-round-led-by-softbank-1482142137

 

  

Small World