Airbus, the European aerospace giant, has won a contract to build 900 communications satellites for OneWeb's global high-speed satellite Internet service. OneWeb appears to be on target to launch 700 of the satellites in 2018. Both Richard Branson's Virgin Group and Qualcomm are still on board as major investors, and the project is expected to cost somewhere between £1.3 and £1.9 billion ($2-3 billion). SpaceX (with funding from Google) is also looking to compete in this same space, but its constellation isn't due until at least 2020.

If OneWeb doesn't sound familiar, don't worry, you're not going crazy. This company used to be called WorldVu, and it was founded by Greg Wyler, who previously founded the satellite Internet company O3b.

Where O3b provides access via eight satellites in medium Earth orbit (an altitude of 5000mi/8000km), OneWeb will use 700 satellites in low Earth orbit (500mi/800km altitude). The primary advantage of low-altitude satellites is that round-trip latency is much lower: O3b round-trip latency is about 240ms, while OneWeb could be as low as 50ms (just about comparable to your home ADSL connection).

Another advantage of using more satellites is that there's more total throughput available. A single O3b satellite can manage about 12Gbps over the 26-40GHz Ka band, which means there's a total network capacity of just 100Gbps split across the entire world. We don't know the exact specifications of the OneWeb satellites yet, but the target is 6Gbps per satellite over the 12-18GHz Ku band. Multiply that by 700 satellites and we could be looking at a theoretical total capacity of 4200Gbps or 4.2Tbps—much more respectable.

The disadvantage of having a constellation of 700 satellites, of course, is cost. While the OneWeb satellites are physically much, much smaller—about 150kg (330lbs) per OneWeb satellite vs. 4000kg (9000lbs) for a geosynchronous comms satellite—it costs a lot to build 900 of them and launch 700 of them into space. (The extra 200 will be held back on Earth until they're needed.) Airbus hopes that, because it's producing so many OneWeb satellites, it will be able to make them in a production line-like fashion and reduce costs significantly.

Airbus beat out Thales Alenia Space, Lockheed, OHB (a German space company), and SSL (Space Systems/Loral) for the contract. The big question now, however, is who is going to launch the satellites. According to Reuters, Virgin Galactic will launch "some" of the satellites with its still-being-designed LauncherOne rocket. And SpaceX, despite the fact it's working on its own satellite constellation, may be the launch partner for the majority of the OneWeb constellation.

The current plan is to have the OneWeb constellation in operation by 2018. The satellites will be slotted into 20 different orbital planes, providing consistent coverage of most of the globe. The ostensible purpose of the system is to provide high-speed, low-cost Internet access to parts of the world that don't have adequate last-mile copper or fibre infrastructure (i.e. a few billion people in Africa and Asia). Westerners stand to gain as well. For airplanes, ships, rural Europeans, and Americans out of range of ADSL... low-altitude satellite Internet could be very tasty indeed.

Ultimately, the success or failure of OneWeb's service will come down to cost. With an expected build/launch/insure cost of $2-3 billion, OneWeb will need to recoup its outlay somehow. Hopefully the plan is to offer really cheap access (say, a few dollars per month) and then to multiply that by tens or hundreds of millions of users. Low-altitude satellite Internet access has been attempted a few times—most notably by Teledesic, partly funded by Bill Gates—but so far no one has successfully pulled it off.