He said the firm would be taking people into space "not too long after" that.
But while Sir Richard believes Musk is "doing fantastically well" in getting cargo into space - including his own auto - the real tussle is between the Virgin boss and Bezos.
In the past few months, Branson has developed a training program and train future astronauts in a centrifuge, preparing their journey. His training includes extensive tennis and cycling.More news: Hubble gyroscope failure puts space telescope into safe mode
He said the length of Virgin Galactic's initial flights will be kept relatively short in order to keep prices at a "reasonable level". The next phase of testing will see the rockets test their endurance and range, hopefully soon reaching the limits of space.
The announcement comes amid a closely fought race between Branson's Virgin Galactic and Amazon CEO Jeff Bezos' Blue Origin to get the first fare-paying passengers into space. Billionaire Paul Allen funded the original SpaceShipOne, which breached the edge of space back in 2004.
"If I have a room full of 10 people, eight out of 10 would love to go to space if they could afford it", he said.
He reached an agreement with U.S. regulators last month to step down as Tesla chair and pay a $20 million (£15 million) fine for what the Securities and Exchange Commission called "false and misleading" claims.
Needless to say, Musk is facing legal action for the former, and has received a $20 million fine from the Securities and Exchange Commission for the latter.More news: Tropical system expected to produce squally, wet weather across S. Florida
"So I think the market for people who would love to become astronauts and go to space is huge".
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Since then, Virgin Galactic has had several successful test flights, with its space planes safely reaching Mach 2, which is about twice the speed of sound.
Branson hopes to have a space craft that can carry six passengers and two pilots above Earth.
While Sir Richard says that he will have humans in space next year, Mr Musk has set a target of 2030 to get people to Mars, with the first people there being tasked with beginning to build a new civilisation.More news: Nick Kyrgios rows with umpire during Shanghai Masters first-round exit