Yes, due to latency reasons they are probably going to put your satelites in < 1000km altitude.
But if you can do point to point communication via same satelite network without needing to go via base station, or if you have several base stations across the globe, then this will have LOWER latency than going via cables especially for long distance stuff say USA <=> Europe.
I assume they plan to launch small satelites, maybe bigger than cubesats, but definitely smaller than 100cm^3 and 1000kg. I think one rocket should be able to launch a significant percentagle of constellation, otherwise this whole thing becomes unfeasible.
On top of that, you have to weigh the cost of launching a constellation against the cost of laying enough cable to cover the whole world. Satelites are cheaper if you have reusable rockets. And regarding decaying orbit- I think the satelites, no matter what they are now, will be obsolete and replaced in ~10 years anyway, so they just need to last that long.
I wonder how will they deal with scalability with the number of clients, and what kind of antennas will this need on the ground. I imagine they'll have to be somewhat directional, otherwise power usage will be too high? Will they have to be outdoors? How will an individual satelite deal with the load when it passes over a huge city with lots of clients, say NY?