[wsj] Satellite communications company O3b Networks said Monday it has raised $1.2 billion from a group of investors and banks, its final funding round before the launch of its global satellite broadband network.
O3b, which is backed by Google Inc. (GOOG), plans to launch its fiber-quality Internet service serving emerging markets in the first half of 2013, after securing $770 million of debt financing and $410 million of equity investment.
The firm's name refers to the "other 3 billion" people in the world currently without access to broadband Internet.
"We are looking to connect the unconnected, now we can start to do that," Chief Executive Mark Rigolle told Dow Jones Newswires.
The company already has around 10 customers for its service, who have signed deals worth $500 million to $600 million to use its infrastructure, Rigolle said.
O3b is selling capacity on its network on a wholesale basis to Internet service providers and telecom companies. Rigolle said he expects the strongest long-term demand to come from mobile phone companies in emerging markets, which lack the fiber-optic infrastructure to offer their subscribers high-speed Internet access. O3b's network will be able to offer "backhaul" connections in place of a fiber network.
"Fiber is not an option in the Amazon, or in Indonesia with thousands of islands," Rigolle said.
Shareholders include Google, satellite operator SES SA (008808732.LU), HSBC Holdings PLC (HSBA.LN), and Liberty Global Inc. (LBTYA). Following the fundraising SES is the largest shareholder.
Thales Alenia Space, a joint venture between Thales SA (HO.FR) and Finmeccanica SpA (FNC.MI), is currently building O3b's first eight Ka-band satellites.
O3b is fully-funded for the launch of these, and will generate enough cash to expand its fleet once the service begins, Rigolle said.
O3b Secures Funding For Broadband Satellite Network