2015 Prediction Update: Last December, we predicted that high altitude network trials would occur over the course of 2015, and that these trials would demonstrate which firms’ approaches would be most viable for commercial release. Google and Facebook were seen as potential leaders in this space. But there are other promising initiatives being backed by big investment. We take a closer look at the race for the skies.

By Jacob Roscoe, Michael Tomasini and Sooln Yoon 

- Industry Prediction Update

The hope behind high altitude networks

According to the U.N. International Telecommunication Union’s 2015 The State of Broadband Report, only 43.4% of the world’s population has regular access to the internet [Figure 1]. Further, 10% of the world’s population live in areas that lack basic connectivity infrastructure. High altitude network deployments are an increasingly popular solution that could narrow this international digital divide. By eschewing the traditional path to connectivity, high altitude networks can provide internet access to more people at an accelerated speed with lower costs. Large technology firms have clear incentives to invest substantial resources in these projects such as reaching a larger user base. Connecting millions to the web will have many economic and social remunerations, a win-win for the tech firms and the people they are serving.

Figure 1: Internet Users by Country 2014

Internet Users by Country 2014 [WorldBank]

Who will take the lead?

2015 Prediction: High altitude network deployment trials show which approaches are viable

Last December, we predicted that high altitude network trials would occur over the course of 2015, and that these trials would demonstrate which firms’ approaches would be most viable for commercial release. Within that prediction, we highlighted Google and Facebook as potential leaders in this space.

So far: Google has completed exhaustive trials in the past few months and plans a commercial deployment to its first country early next year, while Facebook is due to test their drones throughout the US later this year. Other announced initiatives are also raising funding and seeking approval from regulators to begin testing in earnest.

The race: Google vs Facebook

From our perspective, Google is the front-runner in developing a commercial solution. Google’s Loon initiative involves using balloons that can provide blanket coverage over a wide area from more than 15 miles up in the stratosphere. In 2015, Google ran Loon trials in California, Washington, Chile, Brazil, Tanzania and New Zealand. Despite several mishaps with powerlines and crash landings, the trials were a success and demonstrated continued improvement. The earliest trials could only stay in the air for five days and took a dozen employees to launch, but now four employees can launch a balloon every 15 minutes that can remain afloat for as long as six months. Bandwidth capabilities are also improving as the original 3G networks are now LTE-capable. Google has recently announced a partnership with Sri Lanka to bring coverage to the entire nation, with tentative launch plans set for March 2016.

Facebook too has ambitions to launch a high-altitude network in 2016 as part of its Internet.org effort, which aims to provide free internet services such as Wikipedia, economic and medical information, and Facebook to underserved regions of the world. Facebook’s flagship connectivity project, known as Aquila, is a solar-powered drone that uses lasers to beam data while capable of remaining aloft for more than 90 days. Facebook is planning to test these drones as soon as they are granted federal permission. In addition, Facebook had been developing plans to build low-orbit satellites to help solve the issue of the digital divide, but abandoned that effort in the spring of 2015. Just recently, however, they announced a partnership with Eutelsat, a French satellite internet operator, to provide internet to 14 countries in sub-Saharan Africa using spectrum on a traditional geostationary orbit satellite (22,000 miles up versus 100-1,250 for a low-orbit satellite). The Facebook-Eutelstat satellite is under construction and set to launch in 2016.

Dark horse emerging

An even more ambitious approach is underway to develop a network capable of connecting everyone on the globe to the internet using low-orbit satellites. Where a geostationary satellite such as Facebook’s can offer basic connectivity, LEO satellites have the potential of disrupting the status quo in a major way. The significantly lower altitude of their satellites fixes the latency created from sending signals from miles in the sky; comparing LEO speeds to broadband is not out of the question. However, where one traditional satellite can cover a continent, LEO initiatives would require hundreds or even thousands, with complex inter-networking capabilities to provide seamless coverage. Bill Gates famously failed in an LEO attempt in the 1990’s because the costs of building so many satellites became prohibitive, but there are several new competing projects on the horizon. Spearheaded by tech moguls Elon Musk and Richard Branson, initiatives are underway to make low-orbit satellites a reality; the billionaires have developed a rivalry to be the first in the air. Musk’s Space X plans an array of roughly 4,000 satellites, while Branson’s OneWeb just signed a deal with Airbus for the manufacture of 900. Both have plans to test in 2016.

Other disrupting factors

Ultimately, the potential for the long-term success of these initiatives will become much clearer in the coming months as concentrated testing continues and pilot deployments are undertaken; if the participating firms’ hopes are fulfilled, these projects will deliver immense boons for both the firms’ bottom lines and the lives of the millions of unconnected people they aim to serve. Further, we also expect that low-orbit satellite networks will develop further, but the timeline for any potential deployments is still several years away. If proven technologically and economically feasible at scale, LEO satellite providers could find themselves positioned not only to provide quality coverage to undeveloped nations, but also to disrupt incumbent internet providers in even the most developed countries.

Will we see a winning approach emerge? Which projects will crash, float or soar? We will conclude in our 2015 Year End Review in December.

Over the next 10 weeks, read about the ten events and themes we believed would shape the technology, media and communications industry in 2015. Which ones are leading the transformation?

Coming soon:

  • LTE smalls cells and 5G
  • Soft SIM
  • Repurposed spectrum
  • OTT and the cable industry
  • 4K OTT
  • Cloud services
  • Wearables
  • The sharing economy
  • ApplePay

> Read our 2015 industry predictions in our December 2014 Coordinates Newsletter