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The Man Who Sold The Sky


Countdown to Launch

Wyler plans to launch in 2010. Technologically, that seems to be doable. But he also has to pull off the challenge of funding this huge operation.

Skeptics point out that others have attempted similar projects, including one backed by Bill Gates that never took off. And O3B Networks' strictly wholesale model means that they are entirely dependent on other players seeking retail opportunities in these developing countries. O3B Networks doesn't need to have a plan to make money from wiring up Third World. But it is necessary that others construct business plans built on the opportunity that O3B opens up. For O3B, the challenge is, if we build it, will they come?

But O3B Networks' investors seem to think they are backing a winner. The $65 million that Google, Liberty Global, and HSBC have invested is roughly 1/10 of what it will take to build and launch the satellites. Wyler says the rest will be financed through a debt-equity loan. The Financial Times reports that the initial investors have the right to provide the rest of the funding if they so choose, but other investors can be brought in.

I asked Wyler how the current world economic crisis would affect O3B Networks' plans.

"So far," he said, "we have represented a very strong investment opportunity, which focuses on all the markets outside the world financial markets. So while our markets taken together represent relative safety compared to the turbulence of the New York markets and the echo impacts worldwide, and thus improves our value in the equity markets, this [crisis] does mean that the commercial debt markets are very limited. However, our debt will likely be funded by 'project finance,' which is government backed by export/import credit-enhancement agencies, and this is the best and lowest-cost debt anyone can get. Short answer, it reduces our options for debt, but we had not planned to use those options anyway."

After mulling over Wyler's response, I went back and finished rereading the Heinlein story. The parallels were intriguing: A huge project mixing noble motives and a bold but hard-headed business plan, complex funding, the involvement of multiple governments, and, of course, rockets into space. Heinlein's work is always entertaining and sometime prescient. You might enjoy reading or rereading "The Man Who Sold the Moon" yourself.

I won't spoil the story by telling you how it turned out.


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