Half of the world is now connected to the internet. But it is the easy half – mostly in developed economies with high incomes and dense urban regions where connection is cheap.

Of the 3.85 billion people still unconnected, 1.2 billion are in tough-to-reach emerging economies, often rural and remote areas where infrastructure installation costs can be five-times higher and people are poorer. Internet growth rates have thus slowed.

The solution, we believe, could be space-based internet constellations involving thousands of low-Earth orbit satellites – LEOs.

The programme is already becoming reality. Five companies, backed by global corporations, are serious contenders to launch up to 17,000 satellites over the coming decade.

One firm this year launched 60 flat-panel low-Earth orbit satellites in one go using a partly re-usable rocket, putting it on track to have a global network of 1,800 units by the end of 2020. Its constellation will eventually total 12,000 satellites. Another company launched its first batch of a network that could have 648 satellites orbiting Earth by 2021 – 48 of them spares – ultimately reaching 1,980.

Some companies are hitching rides on other organisations’ rockets, some are building their own. One firm this year opened a factory to mass-produce assembly-line-manufactured LEO satellites at the rate of two a day.

As costs fall from $1m a unit to USD500,000, and by employing larger and re-usable rockets, space-based internet is becoming a commercial reality. In the best case scenario, re-usable rockets would cut cost per user from USD160 to USD14 per, and the companies are also developing terminals that could cost just USD200 each.

An estimated 80 per cent of the developed world is internet connected but only 45 per cent of emerging economies are online. That still leaves pockets of developed countries unconnected. One supplier initially proposes targeting areas such as sparsely populated parts of the United States and Canada, charging Western rates that could subsidise space-internet in emerging countries.

It reckons that putting 400 LEOs into space in six launches would cover the North American latitudes, helping many of the 21 million unconnected US citizens. Launching 1,400 units could cover most of the global population and 1,800 would serve the entire planet, including the poles.

A rival company plans to start commercial services in the Arctic by 2020 because 48 per cent of the region has no broadband coverage. This would provide space-based internet for homes, boats and planes above an area slightly wider than the Arctic Circle.

While, consumer broadband is a key beneficiary from LEO satellite connectivity, commercial applications such as marine and aviation also have major revenue potential.

This new technology has the potential to provide internet connection for up to 350 million more people by 2027, helping emerging economies to catch up with developed markets in areas such as banking, education, healthcare and work. This should have a positive economic impact on global growth, with some estimates suggesting that a 10 per cent increase in mobile internet could spur 0.6-2.8 per cent economic growth.

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