SES will invest in satellite broadband startup O3b, providing further credibility to the Google-backed global high-speed Internet access project.

O3b intends to employ satellites to bring broadband backbone and backhaul capacity to Internet service providers serving the hundreds of millions of people around the world who are unserved and underserved by terrestrial networks - hence its name, which stands for "the other 3 billion."

By using Ka-band satellites in medium Earth orbit, Jersey, Channel Islands-based O3b thinks it can deploy a global network at lower cost than low Earth orbit networks like Iridium, but still benefit from lower latency than geostationary systems such as Inmarsat, which are located four times farther from Earth.

The 500 million euro ($750 million) project, backed by Google, Liberty Global, HSBC and North Bridge Capital Partners, was unveiled in autumn 2008 and the contract for the system and satellites attributed to Thales Alenia Space. However, the initiative had to be suspended in early 2009 after running short of funds, but was rescued in September by 465 million euros in additional funding backed by a guarantee from French export credit agency Coface. The funding, part of a $525 million debt package arranged by a syndicate of banks, enabled work on the space and ground segments to resume and the satellite launch, initially slated for troubled Sea Launch, to be switched to Arianespace.

SES will pump a further $75 million into system development and contribute engineering and commercial expertise to bring the first phase of the system, consisting of eight spacecraft and the ground segment, into operation. Another eight satellites are planned. O3b says it already has received more than $600 million in precommitments from a half dozen resellers serving Africa, most recently from Vizada Networks.

Perhaps more important, the Luxembourg-based operator will bring the credibility that goes with its position as the second largest satellite operator and one of the most deliberate in its strategic decision-making. While others have bet hundreds of millions of dollars on dedicated Ka-band systems, SES has preferred to move incrementally into broadband, relying primarily on Ku-band and small piggyback Ka-band payloads to test demand. The investment in O3b will allow it to participate in a dedicated Ka-band Internet access system without exposing itself to too much risk.

Artist's concept of O3b satellite: O3b Networks