Mr. Musk is working with
Greg Wyler,
a satellite-industry veteran and former
Google
Inc.
executive, these people said. Mr. Wyler founded WorldVu Satellites Ltd., which controls a large block of radio spectrum.
To be sure, the venture would face large financial,
technical and regulatory hurdles, and industry officials estimate that
it would cost $1 billion or more to develop the project. The people
familiar with the matter cautioned the venture is in its formative
stages, and Mr. Musk’s participation isn’t certain.
Messrs. Musk and Wyler are considering building a factory to make
satellites, the people said. One of the people said initial talks have
been held with state officials in Florida and Colorado about locating
the factory.
In addition to Mr. Musk, WorldVu is seeking a satellite industry partner to lend expertise to the project, this person said.
Building
a plant and testing satellites is a lengthy process, and WorldVu needs
to clear the use of spectrum with other operators. SpaceX may not have
capacity to launch the satellites until the end of the decade, by which
time WorldVu risks losing its spectrum.
A previous satellite
Internet startup founded by Mr. Wyler, O3b Networks, has faced technical
problems with the first four satellites it launched, which likely will
shorten their lifespans. Today, O3b serves large areas on either side of
the equator with a constellation of eight satellites and is planning to
launch four more by the end of the year. Mr. Wyler has left the
company, though he remains a significant shareholder.
One
indicator of the challenge: Mr. Wyler brought a similar plan to Google,
which prides itself on tackling big problems. Yet he stayed only about a
year before leaving to work with Mr. Musk.
Two
people familiar with the matter said Mr. Wyler’s relationship with
Google soured in part because he wasn’t sure the search giant had
sufficient manufacturing expertise.
If
Messrs. Musk and Wyler choose to build the satellites, they would face
competition from other makers of small satellites, such as Nevada-based
Sierra Nevada Corp. and Britain’s Surrey Satellite Technology Ltd.
Messrs. Musk and Wyler share an interest in reducing the cost of satellites.
WorldVu
needs a lot of satellites, and could be the anchor customer for a
high-volume, low-cost satellite maker. Mr. Musk changed the economics of
launching rockets by simplifying designs while building engines and
other components in-house.
The smallest communications
satellites now weigh under 500 pounds and cost several million dollars
each. WorldVu hopes to bring the cost of manufacturing smaller models
under $1 million, according to two people familiar with its plans.
Messrs. Musk and Wyler also may also
be able to find willing investors among technology giants. Both Google
and FacebookInc. are working to extend Internet access to unwired parts of the globe, through drones, balloons and other means.
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