While still recovering from a tragic setback last year to its space tourism ambitions, Virgin Galactic's efforts to bring down the cost of low-orbit delivery of small satellites appear ready to bear fruit.

Called LauncherOne, the two-stage rocket is fired at an altitude of 50,000 feet from White Knight Two –– the same jet-powered cargo plane that will be used to shuttle future tourists to the edge of space. The rocket is capable of carrying payloads of up to 500 pounds for less than $10 million. Compared to Virgin Galactic's competitors, which charge anywhere from $50 million to $60 million for roughly 1,000 pounds of cargo, the cost-savings for businesses interested in placing satellites into orbit are substantial.

"I believe this new vehicle will create a long-overdue shakeup of the whole satellite industry, disrupting current norms and limitations in exactly the way SpaceShipTwo has for human space travel and space-based science research," company founder Richard Branson said in 2012.

That first shakeup will come later this year when OneWeb Ltd. begins using LauncherOne to build the world's largest satellite network to deliver global Internet access. Expected to cost between $1.2 billion to $2 billion, the project will take advantage of Virgin Galactic's low cost to place roughly 648 micro-satellites into space over 39 launches.

"Imagine the possibilities for the 3 billion people in hard to reach areas who are currently not connected," Branson said in a statement. "We're excited for the opportunity for Virgin Galactic's LauncherOne programme to help make it possible through low-cost, reliable and frequent satellite launches."

In addition to OneWeb, Virgin Galactic has also lined up interest from companies like Skybox Imaging, GeoOptics, Spaceflight, Inc. and asteroid-mining startup Planetary Resources.

In the coming months, Virgin Galactic will conduct a series of ground tests with LauncherOne, with first full-flight operations expected by early 2016.