The New Space Race

The race is on to get tourist passengers into space and even to the Moon – and to roll out the Space Wide Web internet that will succeed the World Wide Web. The key players are billionaires with ambitions that stretch beyond the stratosphere, writes Victor Hill.

Return to the Moon?

The first verified manned flight took place in December 1903 when the Wright brothers got airborne in North Carolina. Just six years later Louis Blériot was the first man to fly across the English Channel. The first non-stop flight across the Atlantic was undertaken by two British officers, John Alcock and Arthur Brown, who flew from St. John’s Newfoundland to County Galway, Ireland one hundred years ago. Their Vickers aircraft crash-landed in a bog on 15 June 1919. It took just 50 years to get from that Galway bog to the moon.

Neil Armstrong was the first man to walk on the Moon almost exactly 50 year ago the week after next on 20 July 1969. The last time a human being walked on the surface of the moon was on 14 December 1972 – Gene Cernan of Apollo 17 (who died in 2017) was the last lunar visitor. So the period of manned Moon landings lasted just three and a half years.

Looking back, we can see that the main point of the Apollo programme was largely one of propaganda at the climax of the Cold War between the USA and the Soviet Union. The Soviets were the first into space with the launch of the Sputnik (a small satellite) in 1957, and Colonel Yuri Gagarin was the first man into orbit in 1961. But the Americans beat them to the moon. In fact, the Russians never got a man there – all 12 human beings who walked on the moon were all American citizens.

After the end of the Cold War there was a period of international space cooperation which culminated with the International Space Station (ISS) in 1998. This is still jointly operated by NASA, the Russian state space agency Roscosmos, the Japan Aerospace Exploration Agency (JAXA), the European Space Agency (ESA) and the Canadian Space Agency. It has been more or less continuously occupied by astronauts of one nationality or another since then, 400 kilometres above the Earth.

It is sad to reflect that of the hundreds of astronauts who have spent time on the ISA only Tim Peake wore the Union Jack – though seven astronauts were British-born[i].

Public or private?

Recently, a number of state space agencies and private companies have started to talk about a return to the moon. The China National Space Administration has landed unmanned spacecraft on the moon twice. Chang’e 4 made the first controlled landing on the “far side” of the Moon in January this year. China also plans to have its own permanent space station in operation by the early 2020s.

The real point about the moon is that it is a testing ground for Mars – and Mars, eventually, will be a testing ground for the outer solar system and beyond. (From an investors’ point of view, Mars, which we can get to in about a year, might yield returns. But Alpha Centauri might only yield returns for your very remote descendants.)

13 nations have rocket launch capabilities – plus the 22 nations that collaborate in the ESA. (Whether Britain will still be a member of the ESA on 01 November I have no idea – and I don’t expect Mr Johnson has any idea either). According to the New Scientist there are 72 national space agencies[ii]. One up-and-coming space power is India via the Indian Space Research Organisation (ISRO). It has been launching satellites using its own rockets since 1980. An ISRO probe went into orbit around Mars in September 2014. Only three other space agencies have achieved this – NASA, Roscosmos and the ESA. In this respect, then, India can be said to be ahead of China.


Japan’s JAXA launched Hayabusa, the first mission to bring back samples of dust from an asteroid in 2003. Hayabusa 2 blasted a projectile into another asteroid in April in order to collect dust samples. Recently, JAXA announced a mission to send a rover to one of Mars’s two moons, Phobos and Demos, in 2024.

But increasingly national space agencies are looking to collaborate with the private sector. On 11 April this year the Beresheet spacecraft crash-landed due to an engine problem on the surface of the moon. This was launched by SpaceIL, an Israeli company which was mostly backed by private investors but which received some funding from the Israeli government and which carried Israel’s flag.

More aspirant nations want to get action in space. The Mexican space agency, which was founded as recently as 2010, is planning to send a landing craft to the moon before the end of this year.

Evolving economics

The economics of space travel are in constant evolution. The Apollo programme required massive government finance but technology has changed that. The miniaturisation of electronic components, robotics, 3-D printing, artificial intelligence – all these things mean that spacecraft and satellites can be far smaller than before – and therefore much cheaper to put into orbit around the Earth.

Moreover, there is a new wave of space technology companies which manufacture the components and equipment that national space agencies need in order to make and launch spacecraft. Some of the exciting patents out there include Martian habitats that inflate like bouncy castles or 3D printers which will be able to print out habitats using Martian dust. I have no idea if these concepts are winners – but I’m sure there will be people who invest in them.

Then there has been a revolution in the launch model. The cost of getting a NASA space shuttle into orbit was $1.5 billion per launch until that programme was retired in 2011. A satellite launch on ESA’s Ariane 5 rocket from French Guyana now costs about $200 million. But you can get a satellite into orbit on one of SpaceX’ Falcon 9 rockets for a mere $62 million. And if you are willing to club together with other satellite operators to launch a bundle of craft at the same time the cost can be even less.

Rocket Lab of the USA can reportedly launch a satellite of less than 100 kilograms from its launch site in New Zealand for just $5 million. This is partly a function of economies of scale: they managed 114 launches in 2018.

The Three Musketeers

This is why private companies are now piling in to this sector. SpaceX (Elon Musk), Blue Origin (Jeff Bezos) and United Launch Alliance (a joint venture between Lockheed Martin (NYSE:LMT) and Boeing (NYSE:BA)) are all now working on new heavy-lift rockets to take payloads into deep space. So far, SpaceX is the only one with a proven track record. More than half of SpaceX’s launches have been commissioned by NASA.

In February 2018 SpaceX’s Falcon Heavy rocket launched a Tesla car into orbit around the Earth. A version of this rocket, the Super Heavy, according to Elon Musk (worth an estimated £15 billion), the CEO of both SpaceX and Tesla, could launch up to 100 astronauts on a mission to Mars. The company is offering trips to the International Space Station. A ticket for that excursion will be around £40 million plus a mere £27,500 per night stayed. (It’s not clear if a honeymoon suite will be available.) SpaceX plans to launch the first passengers in its Crew Dragon transporter by the end of the summer. The spacecraft can carry seven people. It will first be used to ferry astronauts to the ISS.


Richard Branson (worth an estimated £3.1 billion) announced way back that Virgin Galactic would take paying passengers into orbit by 2009. In 2007 a catastrophic explosion killed three engineers; and in 2014 a Virgin Galactic aircraft crashed into the Mojave Desert killing its co-pilot. One decade late, Sir Richard’s objective now looks realistic. The company got a craft into orbit for the first time last December. A 90-minute flight, which would allow passengers to experience a few minutes of weightlessness, will cost £196,000. More than 600 people from 58 countries have reportedly booked flights.

The late, great physicist Professor Stephen Hawking apparently bought a ticket to fly on Virgin Galactic before his death. He was also a strong proponent of man’s return to the moon.

The billionaires’ billionaire, Jeff Bezos (worth £122 billion) has announced that his space company, Blue Origin (which is quite separate from Amazon.com (NASDAQ:AMZN)), aims to launch its new reusable Glenn rocket in 2021. The first stage of the rocket might be reused for up to 25 missions, making it highly cost effective. The rocket will be able to take up to six tourists to the thermosphere. Earlier this year, Blue Origin revealed that it had developed a lunar lander which it plans to take to the moon by 2024.

Mr Bezos used to be cynical about Mr Musk’s ambition to build a colony on Mars; but, apparently, he is now a convert.

The UK wakes up to space

In the final days of Mrs May’s government, the UK has re-affirmed its commitment to put satellites into space from British soil. The UK Space Agency recently signed a deal with Virgin Orbit to start building two launch facilities – one in Newquay, Cornwall and the other in Sutherland in the Highlands of Scotland. These space ports will use horizontal launch craft (that is, they take off like a conventional aeroplane). The most likely carrier, so speculation goes, will be Virgin Galactic. The legal framework for all this has been put in place thanks to the Space Industry Act, 2018. (So the May government did do other things apart from bodging Brexit.)

These flights could be used for space tourism, as passengers would go beyond the atmosphere and would experience weightlessness. But they could also be used for hypersonic flight whereby passengers could travel from Newquay to Melbourne in 90 minutes. Even if such a flight were to cost several hundred thousand dollars, there would surely be a market for that. (So long as you get a helicopter from London to Cornwall – by car it takes about six hours!) More than 600 people have already paid $250,000 deposits to fly aboard Virgin’s first suborbital flights, including the stars of Titanic, Leonardo di Caprio and Kate Winslet. (Let’s hope Virgin’s maiden voyage doesn’t hit an iceberg.)

The horizontal launch vehicle works like this. A carrier aircraft takes a spacecraft to about 18,000 metres and then releases it. The spacecraft fires its rockets and the craft accelerates beyond the Karman line – the boundary between the Earth’s atmosphere and space at an altitude of about 62 miles. The craft then assumes the shape of a shuttlecock and glides back to Earth.

Courting popularity

In the past year President Trump has spoken about the need for NASA to return astronauts to the Moon and to establish a permanent base there. In March Vice President Pence announced that NASA would send astronauts back to the moon by 2024.

But American public opinion is not so keen. A survey was carried out recently by Associated Press and the University of Chicago about attitudes to NASA’s activities. Most people thought that it was most important for NASA to monitor asteroids and comets that could collide with Earth. Only 42 percent of people surveyed favoured Mr Trump’s plan for a permanent moon base.

One third thought that a mission to Mars was much more important than to the Moon. But, according to many, including Professor Hawking, colonising the moon is a necessary pre-condition of getting to Mars. In all likelihood the maned Mars probe will launch from a base on the moon.

The next communications revolution: the Space Wide Web

Thanks to a satellite-based internet system we can look forward to better connection speeds, GPS navigations system for aircraft, boats and cars – and more accurate weather forecasts.

Whether 5G turns out to be revolutionary or not there is a plan to reinvent the internet. The idea is to go beyond mere old terrestrial 5G by building a Space Wide Web far above the Earth. As I explain in my article about 5G in this month’s MI magazine, there are essentially three competing technologies to achieve this: balloons in the stratosphere; high-altitude drones and constellations of satellites all communicating with each other using lasers.


Most internet connections these days are facilitated by cables. Even your top-of-the-range smartphone only connects to the internet using radio-waves over the last few hundred metres from a telephony tower. But satellite internet uses relay stations that remain in geostationary orbit – usually about 35,000 kilometres above the Equator. That 70,000 kilometre round trip, however, adds a half a second or so to the time taken to access a signal or website.

That is why the tech giants are looking to the stratosphere – the region about 10-50 kilometres above the Earth. This layer of the atmosphere is high enough for a transmitter there to serve an entire city but low enough that a smartphone could communicate with it without the intermediation of a receiver dish. Moreover, putting a satellite in the stratosphere is much cheaper than putting one into deep space.

Facebook (NASDAQ:FB) and Alphabet/Google (NASDAQ:GOOG) have already developed solar-powered drones that can hover about 20 kilometres above the Earth for weeks. The problem is that they then tend to fall to Earth precipitously. Other companies such as Boeing (NYSE:BA) and Airbus (EPA:AIR) are working on similar drones. Google has launched a company called Loon which plans to send high-altitude balloons in to the skies above Kenya soon.

The alternative is to put satellites into low Earth orbit (LEO). The problem here is that these move across the horizon very rapidly – in fact, in about ten minutes. So, for a continuous service, you need a string of satellites in LEO girdling the globe, all coordinated in a kind of relay race. Iridium Communications (NADAQ:IRDM), Globalstar (NYSEAMERICAN:GSAT) and Orbcomm (NASDAQ:ORBC) each have a few dozen satellites in low Earth orbit already.

OneWeb, a start-up backed by Airbus, computer chip maker Qualcomm (NASDAQ:QCOM) and British billionaire Richard Branson is also in the game. It put its first six satellites, costing about $1 million apiece, into an orbit about 1,200 kilometres above the Earth in February. The company claims that 600 satellites connecting users to 40 or so ground stations should be functional by 2021.

SpaceX, Luxembourg-based LeoSatand the Canadian company Telesatall plan to create a space-based internet system in the early 2020s. All three companies aim to use energy-efficient lasers to enable their satellites to communicate with each other. SpaceX envisages a constellation of nearly 12,000 Starlink satellites orbiting at 340 kilometres. Their business plan anticipates 40 million subscribers and $30 billion in revenue by 2025. The plate-sized receiver that SpaceX is developing will cost somewhere between $100 and $300.

Amazon has set up a subsidiary called Kuiper which plans to launch 3,200 internet satellites at an altitude of 600 kilometres.

All this is good news for satellite launch companies. But there is one cloud on the horizon. China is developing the capacity to shoot satellites down – and is not alone. In March this year India tested its new anti-satellite missile system – and blasted one of its own dummy satellites to pieces. “India has registered its name as a space power” Mr Modi announced.

The arc of progress

As a space-obsessed 11 year-old I was permitted by my parents to stay up all night to watch the moon landing on 20 July 1969. I actually remember hearing Neil Armstrong’s historic words “One small step for a man: a giant leap for mankind” (albeit with a five second delay). And I remember that President Richard Nixon congratulated the astronauts in a live call from the White House to the moon. It was sensational – proof that we had arrived in a completely new age. My ambition then was to become an astronaut.

That didn’t happen. But I very much hope that I shall also experience the first manned landing on Mars before I cross to that undiscovered country from whose bourn no traveller returns. I rate my chances as good to very good. Though whether those Mars pioneers will be speaking English or Mandarin (or even Hindi) is an open question.

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I promised last week to say something about Mr Johnson’s bid to be our next PM. That will have to wait until very soon…Suffice to say I am collecting evidence that my friend Evil’s bet against him could soon pay off handsomely…

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Please note my new Master Investor email address. I shall endeavour to respond to all well-mannered emails.

victor.hill@masterinvestor.co.uk

[i]See: https://www.bbc.co.uk/news/uk-35103788

[ii]See: A new golden space age, by Leah Crane, New Scientist, 18 May 2019, page 37.