Google’s bet on balloons to deliver cell service soon faces a crucial test amid doubts about the viability of the technology by some potential customers.
The company behind the effort, Loon says its balloons will reach Kenya in the coming weeks for its first commercial trial. The test with Telkom Kenya, the nation’s No. 3 carrier, will let mountain villagers buy 4G service at market-rate prices for an undefined period. Kenya’s aviation authority said its final approval would be signed this month.
Hatched in 2011, Loon aims to bring connectivity to remote parts of the world by floating solar-powered networking gear over areas where cell towers would be too expensive to build.
Its tennis-court-sized helium balloons have demonstrated utility. Over the last three years, Loon successfully let wireless carriers in Peru and Puerto Rico use balloons for free to supplant cell phone towers downed by natural disasters.
Kenyan officials are enthusiastic as they try to bring more citizens online.
But executives at five other wireless carriers courted by Loon across four continents told Reuters that Loon is not a fit currently, and may never be. Those companies, including Telkom Indonesia (TLKM.JK), Vodafone New Zealand (IPO-VOD.NZ) and French giant Orange SA (ORAN.PA), say Loon must demonstrate its technology is reliable, safe and profitable for carriers.
Hervé Suquet, chief technology and information officer for Orange Middle East and Africa, said Loon needs to prove itself in Kenya.
“If the results are positive, we would then be potentially interested,” he said in a statement.
Kuwait-based carrier Zain Group said it, too, is watching the Kenyan trial closely.
Stakes are high for Google’s parent Alphabet Inc (GOOGL.O). It has touted a few small subsidiaries, including Loon, as being crucial to its next act: diversifying beyond ad sales. But its self-described “other bets,” such as self-driving car company Waymo, generate 0.4% of revenue.
Another cloud is a lawsuit alleging Google swiped a competitor’s balloon ideas in 2008. A trial in federal court is slated to begin August 2 in San Jose, California. If it loses, Loon would pay jury-determined damages to Chandler, Arizona-based Space Data, which sells communications balloons to the U.S. military.
Loon said it will “vigorously defend” itself.
Alastair Westgarth, chief executive of the Alphabet subsidiary officially formed last July, expressed confidence in its strategy. “Multiple” additional entities are close to signing contracts with Loon, he said. The company’s workforce has tripled to over 200 employees in the last year.
Loon also attracted outside funding. An arm of Japanese telecoms firm SoftBank Corp (9434.T) developing internet drones invested $125 million as part of a partnership this year. It has accelerated Loon’s previously unreported interest in industrial applications, such as serving farms and off-shore oil wells.