Google decides Loon is too costly to keep afloat

Loon, the much-hyped Google-backed project to connect difficult to reach areas to the Internet, is no more; the company is winding down due to high costs.

Mary Lennighan

January 25, 2021

4 Min Read
Google decides Loon is too costly to keep afloat

Loon, the much-hyped Google-backed project to connect difficult to reach areas to the Internet, is no more; the company is winding down due to high costs.

It was easy to poke fun at Project Loon, as it was then called, back in the early days. The project launched about a decade ago and there was much scepticism over its laudable, but slightly bonkers, plan to connect the unconnected via a fleet of balloons floating over the earth.

But it’s impossible to deny that it actually worked. Loon tackled myriad technology challenges, ironed out a mountain of creases, commanded an incalculable number of column inches, and last summer finally launched a commercial deployment with Telkom Kenya. Loon used a fleet of 35 balloons to provide mobile coverage over an area of close to 50,000 square kilometres. Result.

However, solving the technical issues turned out to be the easy part. Doing it at the right price was a bigger hurdle and one that Loon failed to surmount.

“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,” said Loon CEO Alastair Westgarth, in a blog post.

“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,” he admitted.

And therefore, it’s the end of the road for Loon.

Well, almost. In a separate announcement Telkom Kenya shared that its Loon project will come to an end on 1 March. Loon has pledged to work closely with the telco over the coming months to ensure that the pilot service’s operations are, in its words, wrapped up safely and smoothly.

“Telkom believes in taking bold decisions. It was very exciting therefore, to partner with like-minded pioneers in the adoption and usage of innovative technologies such as Loon, with the aim of filling in the Internet access gaps in areas that were difficult to service,” said Mugo Kibati, chief executive of Telkom Kenya. “Their vision – to connect unconnected and under-connected communities by inventing and integrating audacious technologies – sat well with our mission, to provide the best value for a simpler life, efficient business and stronger communities.”

The operator did not say whether it would look to replicate the connectivity provided by the project by some others means, but noted that it will push on with the expansion of its terrestrial mobile network, with the aim of upgrading 80% of its infrastructure to 4G and boosting Internet access to the Kenyan population.

Loon, meanwhile, is keen to talk about its legacy.

“Working side-by-side with governments and global aviation and communications regulators to showcase and enable these new technologies, we found ways to safely fly a lighter-than-air vehicle for hundreds of days in the stratosphere to anywhere in the world. We built a system for quickly and reliably launching a vehicle size of a tennis court, and we built a global supply chain for an entirely new technology and business,” Westgarth wrote.

“We also scaled up our communications equipment from technology that could have been made in a college dorm room (literally: WiFi routers inside styrofoam beer coolers), to a communications system capable of delivering mobile internet coverage over an 11,000 square kilometer area — 200x that of an average cell tower,” he added.

Westgarth also made reference to the way Loon triggered the creation of an ecosystem of organisations working on providing connectivity from the stratosphere.

“The world needs a layered approach to connectivity — terrestrial, stratospheric, and space-based –  because each layer is suited to different parts of the problem, he said.

His comments come as the space race heats up; a growing number of companies are putting satellites into orbit with a view to providing mobile connectivity on the ground, arguably spearheaded by Elon Musk’s SpaceX, which just last week launched a further 60 Starlink satellites.

Loon may not have been able to make the finances add up, but the world has changed significantly since the project was first conceived. Providing access to mobile technology and Internet connectivity is no longer purely a terrestrial game.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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