E Drones Vs. Balloons

The number of internet users keeps growing at a fast pace, but recently the growth has been slumping. The decrease in growth comes primarily from the technical and economic barrier of having the affordable infrastructure in remote locations where current solutions to provide internet are expensive and ineffective.  

Only half of the world population has access to the internet, and most of them live with less than $2.5 a day. I believe there will be a leap forward in the number of users soon. This growth will change the dynamics of the industry.

Increasing the affordability of internet will increase number of users, which is good news for companies that rely on online advertising, like Google, Facebook, Twitter, Snapchat or Tinder. It will also have drastic changes for the market, as the new users have very different needs than the current average users. This change will be mainly seen in the smartphone business, as the new internet users will connect solely via smartphones. This change will be fantastic for Google and might be terrible news for Apple (AAPL).

How will technology change?

Many companies are actively trying to increase the affordability of providing internet access to remote locations. Doing so is not only socially responsible, but it could also be very profitable. In my opinion, the leading contenders are Airbus, Facebook, and Google

Google has project LOON, Airbus has project Zephyr, and Facebook has Aquila. Airbus and Facebook have drone type solutions, while Google has a balloon type solution.

Airbus Zephyr

Airbus has been cooking Zephyr for a while, and its capabilities extend further than internet coverage and are undoubtedly impressive. It has two models: Zephyr Z and Zephyr T, the latter is larger and comes with radar, ESM/ELINT and NIIRS 6 imagery which is quite good (NIIRS scale is from 0-9). On 2016 it sold the third unit to the UK ministry of defense, for 4.3 Million pounds. It is a hefty sum, but it is a very fancy toy for the military. It has broken a few records on flight time and endurance, and Airbus was undoubtedly first starting the race.

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Comments

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Joe Black 1 year ago Member's comment

Tough call which of these companies will win out.

Jessica Jane 1 year ago Member's comment

Good read.

Eren Solu 1 year ago Member's comment

The affordability of the internet is crucial in getting the World population to become aware. If we, as human beings, are able to attain a free wireless internet service, we may possibly be able to attain world peace if people become more aware of what they do not know or have been blind to, for the majority of their lives. Its time the people revolutionize their perspectives.

Michael Molman 1 year ago Contributor's comment

Internet is now the basis of any modern country, its smart for companies to create an internet network in developing countries. This will essentially give these companies control of the countries' development.

Angry Old Lady 1 year ago Member's comment

Smart how these companies are finding innovative ways of expanding their customer base under the guise of helping people. This should certainly help their bottom line. $GOOGL $FB $EADSY

Craig Newman 1 year ago Member's comment

I don't mean to sound insulting, as this is not my area of expertise, but who in these countries can afford smart phones? A decent smart phone cost hundreds of dollars. It sounds like that would be a year's salary for some people. Though I'm all for bringing internet to those who can make use of it.

Angry Old Lady 1 year ago Member's comment

In doing some research (Google), the most popular apps in Africa are all free. Most apps don't seem to make their money from the cost of the app but from optional in-app purchases, advertising, geolocating (and reselling that info), etc.

Craig Newman 1 year ago Member's comment

But can they even afford smart-phones to use the internet? Plus, the cheapest in-app purchase I've ever seen is 99 cents. Practically free for Americans, but not for people living up $2.50 per day. I still don't see how these companies can make money off this. Especially #Airbus. At least #Google and #Facebook can make some profits on increased advertising. Please enlighten me.

$GOOGL $FB $EADSY

Alpha Stockman 1 year ago Member's comment

Fascinating. #Zuckerberg has been very vocal about bringing internet to the world, so I was aware of their efforts, but I had no idea there was a literal race between #Facebook, #Google, and #Airbus to connect underdeveloped countries to the web. This will open countless doors for industry, innovation, education, and more.

But I'm not clear on whether these companies are pursuing this for altruistic reasons or just their bottom line. Do they hope to simply make more ad revenue or perhaps sell services to these regions (who have limited liquid cash to spend), or do they expect to make money on the drones/balloons themselves by selling the technology to those countries.

I'd love some elaboration on the "who will foot the bill" section.

Dan Jackson 1 year ago Member's comment

Very interesting article. But I wonder if the app stores will really see increased revenue from an increase in users in undeveloped countries. If people truly live off $2.50 per day, how could they possible afford a 99 cent or more app purchase? Or perhaps I'm missing a crucial point here?