Elon Musk’s SpaceX has its sights set on big telecom companies like Comcast (CMCSA) and Verizon (VZ). No, they are not competing in a modern day space race. SpaceX has asked the federal government for permission to test satellite-based internet service.
If the 4,000 small satellites, beaming high speed internet back to the earth is successful it could not only change the face of high speed data transmission but it could provide internet access to some of the most far flung locales on the globe.
The likes of Facebook and Google are both looking into similar project but just scrapped satellite-based programs this week. Musk and SpaceX on the other hand are just getting started.
“He’s writing down the cost curve of the consumer electronics industry,” says Cathie Wood, founder of ARK Invest which owns shares of Musk’s Tesla (TSLA), “so the gyroscopes in cell phones are in these satellites and so the costs are falling dramatically. We think he has a real shot at doing this.”
Wood also notes that SpaceX’s aim is to make the rockets launched for these projects reusable, further reducing costs. She points out that Google (GOOGL) and Fidelity have plowed close to $1 billion into SpaceX’s efforts, evidence that some powerful names agree that the project has some real potential.
As for the likes of Verizon and Comcast, “They’re going to pay attention for sure,” says Yahoo Finance Columnist Rick Newman. “Elon Musk has already done some terrific innovations showing you can get the cost of a rocket launch down way cheaper than it used to be.”
Still, he points out, the project is not without substantial hurdles. “This is not a technology no-brainer because you still have to get all the transmission and connectivity to work from space to ground stations. You may have to get permission from countries or governments to offer the service in those countries. That’s a political barrier. Nothing about space is easy.”
SpaceX is looking at 2020 before this could possibly be a consumer product, but they’re ahead of the game and are innovating faster than anyone else in the...space.