High and hard to predict costs make success unlikely for both SpaceX and OneWeb satellite Internet projects
Internet by Satellite Is a Space Race With No Winners — Another space race is on. — On one side: Elon Musk, founder of SpaceX (and Tesla Motors), backed by Google.
Context & Ripple Effects
In January 2015, Musk announced plans for a low-orbit internet constellation out of SpaceX's new Seattle office, explicitly positioning it against OneWeb's rival system announced from SpaceX's Seattle office. Five months later, Wired's assessment cuts against both: high and hard-to-predict costs make success unlikely for either player, with Google backing Musk on one side.
The subsequent record makes this a pivotal checkpoint in the arc. OneWeb answered the cost problem with a massive capital raise — $1.2B including $1B from SoftBank to fund high-volume satellite manufacturing — while a decade later Morgan Stanley pegs Starlink's projected 2025 revenue at $16.3B, up 74% year-on-year, suggesting at least one of the two 'unlikely' projects found a way through.
First-order effects
- Both SpaceX and OneWeb face immediate pressure to prove unit economics before investors commit constellation-scale capital — the article's cost-unpredictability argument lands directly on their fundraising timelines.
- Google, as Musk's backer in the project, has its own capital exposed to the same cost risk the analysis flags.
Second-order effects
- OneWeb's response pattern — turning to a single deep-pocketed strategic investor like SoftBank rather than public markets — becomes the template for funding ventures whose costs resist conventional forecasting.
- Launch providers and satellite manufacturers gain as both constellations race to build, since even a contested market forces heavy upfront hardware spending regardless of which service wins subscribers.
Third-order effects
- If the pattern holds toward the 2025 outcome in related coverage, low-orbit broadband consolidates around whoever absorbs the cost risk longest — leaving late entrants needing government ties or strategic backers to compete.
- The sector shifts from pure connectivity business to strategically entangled infrastructure, as seen when Musk's political ties begin complicating Starlink's global rollout despite its commercial scale.
The trend: Low-orbit satellite broadband evolved from a doubted, capital-intensive two-horse race into consolidated strategic infrastructure where financial staying power and political access decide winners.