While the world has been gravitating towards constellation based internet services (courtesy of SpaceX), Google’s parent Alphabet Inc. had come up with a totally different alternative for providing internet access in remote areas under Loon. Loon ‘floated’ the idea of using floating balloons that would hover over areas where internet access is scarce, providing connection facilities to users. However, today, the company has decided to abandon the project.
Alphabet said that it failed to bring down costs in a manner that would suit the needs of Loon’s target demographic. Moreover it also could not find suitable partners for this eccentric idea, and thus, the operation is now officially dead.
This has surprised a lot of people, including myself, as Loon had just recently gotten approval from Kenyan government to launch first balloons to provide commercial connectivity services. In fact, the company actually did complete this task, and had already placed balloons in the stratosphere above Kenya. The move was praised throughout the industry, and gave the impression that Loon was headed in the right direction.
However, it looks like Loon was not able to find a sustainable business model. People in Loon’s target geographic have low levels of income, and thus, any internet service that operates in said areas need to be priced at very low levels. Alphabet failed to bring its costs down to a point that would be lucrative to people in the region.
Loon started its mission with the aim of providing internet facilities to the next billion people. The company’s website reads: “We are in discussions with telecommunications companies and governments worldwide to provide a solution to help extend internet connectivity to these underserved areas.”
However, today, Alastair Westgarth, chief executive of Loon said, “We talk a lot about connecting the next billion users, but the reality is Loon has been chasing the hardest problem of all in connectivity — the last billion users.”
“The communities in areas too difficult or remote to reach, or the areas where delivering service with existing technologies is just too expensive for everyday people. While we’ve found a number of willing partners along the way, we haven’t found a way to get the costs low enough to build a long-term, sustainable business. Developing radical new technology is inherently risky, but that doesn’t make breaking this news any easier.”
Loon has now pledged $10 million to non profit organizations that aim to improve connectivity and facilitate entrepreneurship and education in Kenya.
Moreover, Alphabet will also make use of some of Loon’s technology in upcoming projects.
