Category: Ground Segment

C-Band Alliance promises ‘significant, voluntary’ payment to US Treasury if FCC OKs auction, rejects other satellite companies’ claims

Peter Pitsch, C-Band Alliance. Credit: U.S. House of Representatives video
PARIS — Bending to pressure, the C-Band Alliance (CBA) of four satellite operators doing business in the United States agreed to donate to the U.S. Treasury an unspecified amount of the proceeds from their proposed spectrum auction.
In July 16 testimony to the U.S. House Energy subcommittee on communications and technology, CBA’s Executive Vice President for Advocacy and Government Relations, Peter Pitsch, committed to a “significant, voluntary contribution” to the U.S. general treasury.
Pitsch said the U.S. Federal Communications Commission (FCC), which the CBA says will oversee the proposed auction of 180 MHz of C-band spectrum, could make such a future payment a condition of approving the auction.
Beyond saying that CBA believes it is legal for private parties to make unsolicited donations to the U.S. Treasury, Pitsch did not disclose how CBA would calculate the proposed payment.
Industry estimates are that the auction could yield gross revenue of between $10 billion and $30 billion.
The prospect of the four operators, none of them U.S.-headquartered, reaping billions in revenue from 5G terrestrial network providers through an auction of 180 MHz of U.S.-controlled spectrum has been cited as key CBA flaw by opponents of the plan. The CBA members are Intelsat, SES, Eutelsat and Telesat.
Asked to amplify on Pitsch’s remarks, the CBA on July 18 said:
“We are willing to discuss a contribution with the appropriate government authorities at the right time. Upon acceptance of the material components of our proposal, we would address the economic aspects of a contribution. As we said before, we will not let a resolvable issue get in the way of moving forward with our proposal.”
The CBA offer removes, in principle, the taxpayer-compensation issue as a weapon used by many of its opponents since the four operators first proposed a privately managed auction as a way to cede spectrum needed for 5G rollout while protecting current satellite C-band users.
CBA has also made written commitments to owners of receive-only C-band satellite Earth stations saying the costs of relocating or modifying their facilities would be borne by the CBA.
In his testimony, Pitsch reiterated a principal CBA argument, that the proposed auction would be the quickest, easiest way to make mid-band spectrum into the hands of 5G networks. Spectrum could be cleared within 36 months of an FCC decision, with the first 60 MHz available in major markets within 18 months.
The FCC has said transaction speed has a high value in assessing proposed spectrum-clearing auction methods.
FCC Chairman Ajit Pai has said the commission is likely to decide the issue in the autumn.
Compensation for ‘prior investment and opportunity costs’
In his July 16 testimony, Pitsch said the auction’s proceeds would allow CBA members to “secure compensation for their prior investment and opportunity costs, in addition to compensation for their reconfiguration and relocation costs, based on objective and verifiable measures such as 2017 C-band satellite service revenues.”
Two of the four CBA members, Intelsat and SES, account for some 92% of the current C-band satellite business in the continental United States. Eutelsat and Telesat Canada divide the rest.
But despite their minority position, Eutelsat and Telesat are indispensable to CBA, which must present a united front to the FCC because each of the operators has rights to the entire 500 MHz of C-band spectrum now reserved for satellite services.
Should even the smallest CBA member choose to quit the alliance, the prospect of a “holdout” would immensely complicate CBA’s life.
That would suggest that CBA, which has never disclosed how it would divide the proceeds among the four members beyond a pro rata distribution based on past revenue, may need to further incentivize Telesat and Eutelsat.
Asked whether these companies’ “prior investment and opportunity costs” mean Telesat and Eutelsat will get a higher percentage share of the proceeds than their past revenue would warrant, CBA said in its July 18 response to questions:
“The CBA not disclosed that [the split among the four members]. First we need an FCC decision. Then, we need an auction. We can’t anticipate the results now. We are discussing our proposal with the FCC, and there are still many moving parts. What is certain is that under our proposal to clear 200 out of 500 MHz, 40% of the satellite capacity becomes unusable.
“We have said the investment in realizing our proposal — developing filters, testing, labs, logistics, installations, the order and launch of new satellites – all this will amount to up to $2 billion. Then there is the acquisition cost at the time when we bought the U.S. entities that were holding the US licenses — in case of SES it was [GE] Americom, for which we paid billions. As far as incentivizing small market share members is concerned, let’s be clear about who that would be: The four satellite operators servicing the U.S. with C-band are in the CBA.”
The Small Satellite Operators group rejects the C-Band Coalition’s metric — 2017 U.S. C-band revenue — in favor of a model that accounts for potential future revenue impact of the loss of spectrum rights. Under this model, operators with aging fleets would suffer less than those that have incurred more-recent capex. Credit: Small Satellite Operators FCC filing
Four other satellite operators have received licenses to operate C-band satellites in the U.S. market — ABS, Empresa Argentina, Hispasat and Embratel Star One.
Acting together under the Small Satellite Operators (SSO) in FCC filings, these companies have said that the same “opportunity costs” that CBA proposes to include in distributing the proceeds among CBA members should extend to them as well.
The Small Satellite Operators argument, made as recently as July 3 to the FCC, is that past revenue cannot be used as a measure to apportion harm. Instead, they use some of CBA’s own reasoning to argue that it’s the loss of future spectrum rights, and not past revenue, that counts.
“In no way to a satellite operator’s spectrum rights depend on the amount of its past revenue,” the SSO members said in an FCC filing. “All eight [satellite operators] will suffer the loss of spectrum access.”
The SSO said all of its members “had plans to market or were actively marketing services using C-band spectrum in the United States,” but concedes that under its argument this should not matter much.
The left side is the distribution of proceeds to satellite operators under the C-Band Coalition proposal. On the right, the Small Satellite Operators’ proposed distribution, based on each operator’s active C-band satellite capacity and the age of each satellite. Credit: Small Satellite Operators FCC filing
The SSO group wants its four members to share in the proceeds as part of what it calls a Distribution and Scoring Model. Here’s how it would work:
Gross auction proceeds would first be used to compensate Earth station operators for their costs, plus a fixed incentive to get them to act quickly.
Then the U.S. Treasury would get its cut, a fixed percentage of the remaining proceeds.
The satellite operators would take their share from the remaining portion.
One-third of the proceeds would be equally distributed among all eight satellite operators with valid U.S. FCC C-band operating licenses.
The remaining two-thirds would be allocated to the eight operators as a function of the age and number of satellites that each of them has in service. The older the satellite — the nearer it is to retirement — the less compensation would be paid.
The SSO group says 62 C-band satellites are in operation with U.S. coverage.
In a July 18 FCC filing, CBA dismissed the SSO argument, principally because its members have no C-band business in the United States and therefore nothing to lose.
Moreover, CBA said the SSO group’s satellites’ beams in many cases do not reach the continental United States, and others have extreme look angles that make services “highly impracticable.”
“It is hardly surprising that the SSOs have been unable to obtain a single U.S. customer or earn a single cent of U.S. revenue despite having held U.S. market access authorizations for years — and in one case, over a decade,” CBA said.

U.S. space surveillance unit: Few issues with SpaceX Starlink; universities are toughest cubesat owners for us

Diana McKissock, SSA sharing and spaceflight safety lead, 18th Space Control Squadron. Credit: Seradata
LONDON — U.S. Strategic Command’s 18th Space Control Squadron (18 SPCS), which tracks and catalogues space objects and makes data available worldwide, is stepping up efforts to integrate data from commercial space-surveillance companies despite a slow evaluation process, the squadron’s spaceflight safety lead said.
She also said that while it has taken time for 18 SPCS to identify all 60 SpaceX Starlink satellites launched together on May 24, the satellites were quickly catalogued.
“We have a lot of data on that” launch, said Diana McKissock, space situational awareness sharing and spaceflight safety lead at 18 SPCS. “They [the Starlink satellites] have been catalogued since a day or two after launch. We are working very closely with SpaceX” on naming each of the 60 to permit better tracking.
Credit: 18 SCPS
McKissock spoke here June 25 at the Seradata Space Conference as part of 18 SPCS’s campaign to encourage launch providers, satellite operators and launch-service integrators to provide the squadron with data.
A particular challenge for 18 SCPS is the growth in the number of cubesat launches, most on board rockets carrying dozens or more of these small satellites and releasing them in rapid succession.
Because not all launch providers are at ease with submitting data to the U.S. military, 18 SPCS often relies on the launch integrators — those who secure launches on behalf of groups of small satellites — to provide the needed information.
“When they are dealing with a non-cooperative [launch] provider, they can very often get us the launch plans and the information we need to track effectively,” McKissock said.
Perhaps surprisingly, she said the most difficult organizations for 18 SCPS to secure data from are universities, which are ever-more active in launching their own spacecraft.
“Most satellite operators are very forthcoming with information because we are doing much more for early engagement,” McKissock said. “The hardest entities to get in contact with our universities — without a doubt. If any of you know Indian or Japanese universities, please send them my contact information.”
Credit: 18 SPCS
How the growing number of commercial space situational awareness companies will integrate their data into the U.S. Air Force’s Space Surveillance Network and improve 18 SCPS’s tracking ability remains to be seen.
McKissock said it remains a work in progress, in part because of the criteria 18 SPCS uses to clear data.
“We are working on this,” she said. “The challenge is that we have a very onerous numerical evaluation process that right now does not lend itself to rapidly integrating new data sources. But Air Force Space Command, which equips our site, has programs working to do that better.”
The Space Surveillance Network of ground- and space-based radar and optical sensors this summer is expected to receive test data this summer from the new Space Fence system, which will enable to track objects the size of a marble. The Space Fence is scheduled to begin full operations next year.
New telescopes in Australia, managed by the Australian military, will add long-needed surveillance from the Southern Hemisphere.
The collision-avoidance maneuvers reported here are probably conservative. Not all operators disclose that they have performed them. Credit: 18 SCPS
18 SPCS issued 9 million Conjunction Data Messages to satellite operators worldwide in 2018. Less than 1% of these were judged serious enough to require an emergency report to the operators. Most of the activity, unsurprisingly, concerns satellites at between 500 and 750 kilometers in altitude.
On average, only two alerts — meaning a probability of collision of greater than 1% — are issued per day, and even this figure is inflated because it includes the same alert issued over several days.
Confirmed collision-avoidance maneuvers numbered 107 in 2018, including six in deep space, according to 18 SPCS, but McKissock cautioned that operators are not required to report their maneuvers and the statistics may undercount what’s actually happening.
In any event, 18 SCPS does not make recommendations for a particular course of action.
“What we can do [for satellite operators] is provide high-accuracy data at no cost,” McKissock said, noting that 32% of the 2,200 satellites that 18 SPCS supports with tracking are commercially owned. “What we can’t do is recommend courses of action or tell an operator what to do, or do advanced risk analysis.”

Galileo agency chief says system will emerge from 7-day outage as stronger system; still no word on root cause

Carlo des Dorides, executive director, GSA. Credit: GSA
UPDATE July 19: The executive director of the GSA, the agency managing the European Commission-owned Galileo positioning, navigation and timing network, on July 19 issued his first statement on the seven-day global outage the ended July 18.
GSA Executive Director Carlo des Dorides promised to deliver a detailed explanation of what happened once GSA collects “all the technical elements and [implements] all necessary actions.” An independent board of inquiry is being formed.
Here are excerpts from his statement:
“The technical incident originated in the Galileo ground infrastructure equipment, affecting the calculation of time and orbit predictions which are used to compute the navigation message. The technical incident affected different elements of the ground facilities.
“A team composed of GSA experts, industry, ESA and the Commission worked together 24/7 to address the incident, and Galileo Initial Services have now been restored. In particular, the dedication and work of our industrial partners has helped to achieve this result.
“Commercial users can already see signs of recovery of the Galileo navigation and timing services, although some fluctuations may be experienced until further notice.
“The team is monitoring the quality of Galileo services to restore the Galileo timing and navigation services to their nominal levels. As soon as we gather all the technical elements and implement all necessary actions, we will provide more detailed information through our NAGU (Notice Advisory to Galileo Users) notifications to users.
“The Galileo system has grown stronger as a result of this experience, and we will continue to deliver Initial Services until full operational capability is declared. These challenging days have shown us how much you, the GNSS user community and stakeholders, rely on Galileo and how much you trust the Galileo system to deliver the services to support growth, business and sustainability. Europe and the world need a strong civil global satellite navigation system today more than ever.”
UPDATE July 18: Service from Europe’s Galileo satellite navigation network have been restored, GSA announced July 18, although it warned users to expect “some fluctuations until further notice.”
The agency said the outage, which began July 11 and affected Galileo services worldwide except for the Search-and-Rescue function, was caused by “an equipment malfunction in the Galileo control centers that calculate time and orbit predictions, and which are used to compute the navigation message. The malfunction affected different elements on both centers.”
An independent board of inquiry will be established to invested the root causes of what GSA conceded was a “major incident.”
PARIS — A general outage of Europe’s Galileo positioning, navigation and timing network has been out of service, except for search-and-rescue functions, since late July 11 due to an undefined ground-infrastructure issue continued into midday July 15 with no indication of when it will return to service.
The problem was first notified to Galileo users in a NAGU — Note of Advisory to Galileo Users — late on July 11, with updates on July 13 and 14h.
The Prague-based GSA, which manages the system on behalf of the 28-nation European Union, said an Anomaly Review Board had been created with experts from GSA, The 22-nation European Space Agency, the European Commission and industry, had been created to assess the problem and restore service “as soon as possible,” GSA said in a July 15 statement.
Galileo ground segment. Credit: ESA
GSA sought to minimize the import of the shutdown, saying the Galileo network remains in its “Initial Services” phase, which began December 2016 and is scheduled to lead to full operational service in 2020.
“During this initial ‘pilot’ phase preceding the ‘Full Operational Services’ phase, Galileo signals are used in combination with other satellite navigation systems, which allows for the detection of technical issues before the system becomes fully operational,” GSA said. “It is precisely to cater for such initial technical incidents that the EU is rolling out Galileo progressively.”
The GSA said that part of the transition from Initial Services to full operations in 2020 is the reinforcement of redundancy. Galileo currently has two main control centers, in Germany and Italy, each of which can act solo in the event of a problem with the other.
The GSA did not say whether a specific system component, which currently has no backup, was responsible for the current outage. It did say the problem will have “no cost impact, as maintenance contracts of the Galileo system currently cover such events.”
The Galileo constellation now counts 26 satellites in orbit, with additional spacecraft to launch in 2020. With full operational status reached then, Galileo should be able to be used independently of GPS, China’s Beidou or Russia’s Glonass constellations.

Maxar starts work on Ovzon-3, a novel, 500-kg GEO design for a new satellite operator

Ovzon has ordered an SSL-500 satellite platform, designed to carry up to 250 kilograms of payload for communications missions for a 500-kilogram launch mass.
PARIS — Commercial geostationary-orbit satellite orders are rare enough these days, and startup Swedish satellite operator Ovzon AB’s order with Maxar Technologies is even rarer — a 500-kilogram spacecraft for mobile, mainly government, communications to mobile terminals.
Maxar is using its Legion satellite frame, designed for Maxar’s next-generation optical imaging satellites in low Earth orbit, and borrowing elements from its venerable 1300 geostationary satellite design for the Ovzon-3 satellite.
Maxar announced July 12 that work on the satellite had begun following the latest financial raise by Ovzon. The satellite is scheduled for launch in 2021 aboard a SpaceX Falcon Heavy rocket. It will include an Ovzon-designed digital signal processor.
The use of a Falcon Heavy to launch a single 500-kilogram satellite sounds like overkill. But Ovzon has said the choice made to assure direct injection into the geostationary arc rather than at a more-common drop-off point in geostationary-transfer orbit.
Ovzon has said it has already had bookings totaling $65 million for Ovzon-3, including a three-year contract with Intelsat valued at $56 million. Ovzon is leasing capacity Intelsat’s IS-39 satellite, scheduled for launch this summer aboard a European Ariane 5 rocket.
The Ovzon financing that set in motion the Maxar contract — which was signed in December 2018 — includes a loan from Proventus Capital Partners. Ovzon completed a rights offering in January for 750 million Swedish krona ($79 million)  and a senior secured six-year loan for $60 million and a subordinated loan of 200 million krona.
The Ovzon order was a vote of confidence in Maxar, which had openly speculated whether to close or sell its telecommunications satellite business given the decline in that market. Maxar has since decided to reorganize the business.
How much of a market there is for small geostationary satellites is unclear. Several companies have expressed interest in building or buying such spacecraft to fill in capacity at a given orbital slot without having to commit $200 million or more for a standard-size geostationary satellite.
“We chose Maxar to build Ovzon 3 because they have a strong reputation of delivering world-class, reliable products backed by industry leading customer service and manufacturing agility,” Ovzon Chief Executive Magnus Rene said in a July 12 statement. “Ovzon 3 is an important first step towards fulfilling our strategy to further revolutionize mobile broadband by satellite, offering the highest bandwidth with the smallest terminals.”

Ground services provider KSat, expanding in all directions, books $86 million in two new contracts

KSat President Rolf Skatteboe. Credit: KSat
PARIS — Satellite ground station operator Kongsberg Satellite Services (KSat) has booked two contracts valued at about $86 million in recent weeks from well-heeled customers at a time when KSat is looking to attract the lower-profitability NewSpace market for constellations of small satellites.
The new contracts are with NASA and Space Norway. The NASA contract is valued at $4.7 million over four years and likely a total of $14.9 million over 10 years to provide data reception services for NASA’s NiSAR and Pace satellites — “ground-station as-a-service, fully managed and with API´s for request, delivery and monitoring of the service, interfaced with existing cloud solutions,” KSat said of the NASA work.
KSat Chief Executive Rolf Skatteboe said said his company “is the only actor capable of delivering operational services in Ka-band. This service will considerably increase bandwidth, enabling NASA to transmit information faster and more reliably.”
KSat’s Svalbard station in the Arctic at 78 degrees North and its Antarctic TrollSat facility at 72 degrees South offer polar-orbiting satellites a data download capability every 45 minutes in a 90-minute orbit.
The second recent contract is with KSat’s 50% shareholder, Space Norway, to provide ground station service and satellite operations for Space Norways’ two highly elliptical orbit Arctic telecommunications satellites, which will carry payloads for the U.S. Air Force (EHF-band), the Norwegian Ministry of Defence (X-band) and mobile satellite services provider Inmarsat (Ka-band).
The Space Norway contract is valued at 608 million Norwegian kroner, or $71.2 million over 15 years. The satellites are scheduled for launch aboard a SpaceX Falcon 9 rocket in 2022. The satellites are under construction by Northrop Grumman:
KSat Chief Executive Rolf Skatteboe said the Space Norway business “is of high strategic, as well as financial, importance” to KSat.
Credit: KSat
Both the NASA and Space Norway deals will require KSat to invest in new antennas —  11-meter multi mission S-, X- and Ka-band antennas at KSat’s Arctic Svalbard station and at the Punta Arenas station in southern Chile for NASA, and an expanded antenna facility at the company’s Tromso site for Space Norway.
Tromso, Norway-based KSat is also pursuing development of a maritime domain awareness service using satellite-based Automatic Identification System (AIS) sensors and synthetic aperture radar (SAR) imagery. A small Norwegian SAR satellite is scheduled for launch in 2020.
KSat’s station in Punta Arenas, Chile. Credit: KSat
Ground station operations, SAR imagery, AIS ship detection — all these fields are now full of new entrants, commercial and governmental. Whether this new activity is a net benefit to KSat or a competitive headwind remains to be seen.
The company has said developments such as Amazon’s AWS Ground Station are good for the industry and for KSat.
On the NewSpace front, KSat in 2018 introduced KSat Lite, a series of small-aperture antennas priced on a per-pass basis to appeal to startups whose business starts small and then expands with additional satellites.
The KSat Lite service provides upload and download in UHF-, S- and Ku-band, and download in Ka-band.
Skatteboe said in KSat’s 2018 annual report that initial results for the smallsat business were good, but that “It’s a sector with small margins. The company is looking to reduce its operating costs to improve margins.”
KSat has struck deals with NewSpace startups including Hawkeye 360, Iceye, Axelspace and Hiber, and has a contract with the OneWeb global broadband service for data download from the Svalbard facility.
KSat is owned 50% by Space Norway, a government-owned company, and 50% by Kongsberg Defence and Aerospace.
With the exception of 2005, KSat has posted revenue increases every year since its creation in 2002. Credit: KSat
Neither of these investors has much reason to complain about KSat’s performance over the years.
The company has increased revenue in every year but one since its start in 2002. In 2018, revenue was 844 million Norwegian kroner, or $96.7 million at Dec. 31, 2018, exchange rates, up 12% from 2017.
Operating cash flow for the year was 302 million kroner, up 11% from the previous year.
With the increased revenue came increased investment. The company increased its antenna data-download capacity by 18% and at the end of 2018 had 170 antennas at 21 locations making 37,000 contacts per month with customer satellites.
A new facility in Nuuk, Greenland, is expected to be completed this year. Full-time employee headcount increased by 15% in 2018, ending at 190 people.

Space Norway orders 2 Northrop Grumman satellites with USAF & Inmarsat as customers; SpaceX launch in 2022

Two Northrop Grumman Innovation Systems Geostar-3 satellites, just 2,000 kg at launch and with 6 kW of power, will be launched for Space Norway on a single SpaceX Falcon 9 rocket in 2022. Credit: Space Norway
PARIS — Space Norway has concluded contracts with the Norwegian Ministry of Defence, the U.S. Air Force and commercial mobile satellite communications provider Inmarsat to fly three payloads on each of two satellites to be launched into highly elliptical orbit on a single SpaceX Falcon 9 rocket in 2022.
The partners include Northrop Grumman, which is under U.S. Air Force contract to build two modified Advanced-EHF payloads and, under a separate contract, will provide the satellite platforms.
Each satellite, a Northrop Grumman Innovation Systems GeoStar-3, is expected to weigh some 2,000 kilograms at launch and to provide 6 kW of power for 15 years’ in-orbit life to provide Arctic communications.
Space Norway will be selling capacity from its X-band payload to other NATO governments and has said it’s in talks with Britain, Canada, France and Germany.
The U.S. Air Force will integrate its Space Norway EHF payloads into the AEHF satellite constellation in geostationary orbit. This is apparently the first time that an operational U.S. military payload will fly on a commercial satellite.
London-based Inmarsat will lease the Ka-band payload — both military and commercial Ka-band — to add to its Global Xpress constellation in geostationary orbit to provide Arctic coverage for maritime and aeronautical users, including commercial aircraft at the edge of the Arctic, to provide them with a higher elevation angle than is possible from geostationary-orbit spacecraft.
The government of Norway has agreed to invest some $101 million into the project now that Space Norway has confirmed, with the U.S. military and Inmarsat commitments, the financial viability of the project, which will be managed by a subsidiary, called Space Norway Heosat AS.
Kjell-Ove Orderud Skare, the program’s manager at Space Norway, said the three customers’ payloads fill up the available space on the GEOStar-3, “which is key to making this a cost-effective solution.”
“We look forward to providing the world’s first and only mobile broadband service in the Arctic region, something which has long been an important objective for the Norwegian authorities.”
The satellites’ highly ellipitcal orbit means they spend little time at the South Pole but linger for 12-plus hours each over the North Pole. Credit: Space Norway
And not just Norwegian. The U.S. and Canadian militaries for years have tried to structure a system that would serve the relatively modest, but strategically important, bandwidth requirements in the Arctic but have come up short.
It took Space Norway Heosat, created in 2018, to close the business case by assembling Norwegian and U.S. military demand, plus Inmarsat’s commercial ambition.
Even with the U.S. Air Force as a customer, the Norwegian government had withheld its promised financial support until the business case was firmly closed. That happened with the arrival of Inmarsat.
The confirmation of the Space Norway Heosat program could remove one sales argument used by backers of proposed constellations of low-orbiting broadband satellites, almost all of which view government business as a key customer set.
Inmarsat designed the Ka-band payload on the Space Norway satellites using some of the same specifications used for the next-generation Inmarsat 7,8 and 9 Global Xpress spacecraft recently contracted from Airbus Defence and Space.
But the contracting of the Ka-band payload, also to be built by Northrop Grumman, was left to Space Norway. Inmarsat will be leasing all the Ka-band capacity over the satellites’ 15-year operational lives.
The payloads in the highly elliptical orbit, which allows them to linger over the Arctic, will have some of the same software-defined flexibility as the Airbus-built satellites.
Inmarsat Chief Technology Officer Peter Hadinger said each Space Norway Ka-band payload will have substantially less capacity than the three Airbus satellites. What matters, he said, is to provide coverage whose importance to governments and to some commercial airlines and maritime fleet operators goes well beyond the modest bandwidth requirements of the region.
“It’s hard for any one entity to cover the business case on its own,” Hadinger said of the need for Space Norway to assemble all three of its customers.
“But once somebody’s done it, the market for somebody to do another one is pretty small,” Hadinger said. “I expect that you will see countries that had been contemplating how to do this start to cut their own deals with each of the three parties for some amount of the capacity.”
Hadinger said the several years it took Space Norway to close its business case is a lesson that the LEO broadband constellations would do well to learn.
“Going into the mobility market, there is a take-up rate that is not instantaneous. This has been true of every generation of mobile equipment we’ve deployed. It takes a long time,” Hadinger said.
“Especially for a government user it takes a long time. They say: ‘OK, once you’ve deployed, come and take do us. Then we’ll test it. After we’ve done our op/eval testing, we’ll put in a budget request.’ Then that goes to Congress, and a few years later you get the money. They they have to put it out for a bid, and select a contractor. Then you go through the process of getting it installed, which may take a couple of years.
“We have designed this not for Singapore, unlike a LEO constellation whose satellites need to be designed for peak demand. We’ve designed it specifically for Arctic coverage. That’s what it’s sized for and what the gateways are for.”

Newtec CEO on being purchased by ST Engineering: Many satcom companies should do something similar

Newtec CEO Thomas Van den Driessche. Credit: Newtec
SINGAPORE — In 2018, satellite ground terminal manufacturer Newtec, after several years of double-digit growth, decided it needed more heft given the changes in the business.
The initial idea was that a private-equity investor would fill the bill. Instead, Newtec agreed to its purchase by ST Engineering of Singapore.
ST Engineering’s purchase of Newtec, for $286 million — 2.7 times revenue and 14.6 times EBITDA: — is expected to close by the end of this year and will make Newtec a sister company of its onetime competitor, VT iDirect, which has been part of ST Engineering since 2005.
Newtec Chief Executive Thomas Van den Driessche said much of the commercial satellite communications sector — including satellite operators and service providers — needs a good dose of M&A. Newtec, he said, is showing the way.
Is fitting inside ST Engineering alongside iDirect going to be a challenge?
I don’t think so. Today we are in the merging control period, which we expect to take 4-5 months, with the acquisition before European and U.S. regulators, among others. The U.S. one typically takes the longest. We expect the close to be late this year. We are very restricted as to what we can discuss with iDirect because of anti-trust concerns.
What about ST?
It’s less restrictive because we have the confidentiality of the NDA. We can discuss strategy.
Newtec has been successful. What argues in favor of being acquired by ST Engineering?
We’ve gone through a five-year period with a growth CAGR of around 18%. It’s obvious we can continue organic growth the way we have been doing for another two years.
However, the challenges and opportunities that are beyond 2021 are huge. Designing and building ground segment for constellations is a lot of engineering and deployment work and intense capex. They’re big projects. We had encountered similar periods, like around 2013 when we were beginning our multi-service VSAT operations and we wanted to go into multi-service HTS satellites, the non-pure consumer-designed ones.
Credit: ST Engineering
And we were confronted with the fact that these full-platform GEO HTS projects were maybe 10, 20 or 30 million dollars of ground segment costs to start.
When you’re a 50-million-euro company and you want to sign a 30 million dollar deal, that causes some problems. We moved on, but still, when you have 120 million in revenue and you want to sign a 120 million deal, that also causes some problems.
So even though our organic growth was going great and looked like it would continue to 2021, we wanted to be prepared for what comes beyond that point. We came to the conclusion that we needed non-organic growth next to the organic growth.
We started the process to find private equity to do a buy and build strategy, but we soon concluded that first of all we needed a pretty big private equity investor to acquire a company.
A little debt too, maybe?
That’s the risk. But we also came to the conclusion that it’s a very risky and time-consuming effort that may not bring what you want.We want to have enough critical mass to tackle big programs when they arrive. Acquiring other companies and growing them and integrating them may not get to that critical mass in time.
Did your exercise presume LEO broadband constellations in the next few years?
It presumed an enormous amount of potential that would cause a lot of work. So it could presume a LEO program with a $100 million ground segment. We were very proactive at 2018 and early 2019, saying we need to do something which is more than organic growth. This growth curve that we have is going so nice and linear, but it’s not going to last forever. So while we didn’t have to do anything immediately, we were going to have to change the strategy and increase our critical mass.
There are many things going on at the same time — virtualization and cloud services, all these vertical markets you need to cater to, IFC, maritime, government, 5G, cellular backhaul — together with new platforms for constellations.
We had to be big enough to cope with all of them or we weren’t going to play.
So you set out for private equity, and ended with ST Engineering. Did they find you or did you find them?
There were a lot of strategic players that found out we were on the market for private equity, which meant that our shareholders were at least willing to give a portion of their shares. We got contacted by a lot of strategic players.
Our view is that by merging Newtec with the satellite communication activities of ST, we immediately have the right size to tackle the things we want to tackle.
Credit: ST Engineering
Is your strategy going to require ST investment?
It’s more about critical mass and capabilities. We have 400 people now.  Combine the number of activities with them and you have 1,000 very capable engineers in the satellite industry. Even without new investment, your capabilities are just higher. What you need to do is not necessarily more, but you simply have more people.
The Yahsat broadband agreement with Hughes Network Systems in the Middle East has now been extended to Brazil. Is that going to affect your Brazilian work with Yahsat?
A: We presume so. It’s also a JV, which will take some time before it actually comes into effect. In the meantime, of course we have our activities with Yahsat that are going quite well. The ramp-up of terminals being deployed for them in Brazil is good.
Q: It sounded like Hughes needed Yahsat’s presence in the Middle East, and Yahsat needed Hughes in Brazil.
Hughes needs the Yahsat satellite as well because they don’t cover the whole of Brazil on their own. I can only say that our cooperation with Yahsat is good in Brazil. The ramp-up is going to lead to quite a big installed base by the time the JV is approved.
So there’s an incentive not to replace all that hardware.
Well, we’re not going to change it out, that’s for sure!
What happens at that point?
It’s up to Yahsat to make those decisions. I talked to Masood [Yahsat CEO Masood M. Sharif Mahmood] and it sounded like a good idea in terms of business logic. If they think it’s really good for their business, then it’s a good thing.
The financial stresses of the in-flight-connectivity providers have eased a bit. Here too you think consolidation would be a good thing?
There are maybe 700 service providers in different markets, geographically and by market segment, and at least 26 satellite operators — probably more, but 26 that have more than national footprints.
The industry likes diversity. You heard SES Chief Executive Steve Collar say there are seven satellite industry associations, which he said is six too many.
I’m president of one of them. I wonder if SSPI counts as one of those…. The point is if you think about the future and how you position yourself, there’s probably more of these people in the ecosystem that should make a move.
You’re including IFC, maritime service, hardware providers?
Everybody, including satellite operators. I see good things happening, for example the investment in LeoSat by traditional satellite operators to make sure there’s some kind of play. I like the idea.
I wasn’t opposed when Intelsat wanted to merge with OneWeb, which by itself wasn’t a silly thought. It didn’t work out, but the idea had merit.
The idea that somebody with 55 traditional satellites and some very nice HTS satellites, the Epic class, would merge with a MEO/LEO constellation is not a bad idea at all.
There are some 20 LEO constellations, include IoT and other narrowband applications, that are being designed.
There must be other people that think that they need to do something. We were doing fine and still thinking we needed to do something to move us to the next level.
You see Newtec as a natural fit inside the broader ST business?
Yes. There’s more than one or two companies. ST activities include satellite communications as well. We really want to combine the strengths of these companies.
And in your management team, nobody’s unhappy with this?
Nobody’s unhappy.
Le’s return to in-flight connectivity and consolidation. Ku-band provider Panasonic Avionics struck an agreement with Inmarsat’s Ka-band Global Xpress service. Do you understand it?
I like Panasonic, they’re one of my biggest customers. I understood the Inmarsat agreement it when they explained it to me. Airlines want to have a certain coverage and they don’t care whether it’s Ku or Ka. There is a complementary nature to the two networks, which makes sense.
But then you’d need complementary on the aircraft with Ku- and Ka-band terminals, no?
Yes, but it’s not necessarily only about single aircraft, it’s sometimes about an airline, which may have regional aircraft that fly here, and international routes that fly there. The international may fly in Ku and the regional in Ka. If somebody wants to be on the front as the interface with the airlines, somebody has the service people for installations, and the other party may have a global network which is complementary. There are multiple aspects to this which kind of makes sense. Of course the proof of the pudding is in the eating.
It’s not that Panasonic has concluded that Ka-band is the future, or that Inmarsat thinks Ku-band will be around a long time?
No, I don’t think so. Some things you would think are obvious because it’s Ka-band are not necessarily the case.
An operator recently said it was having trouble finding a Ka-band slot.
Yes, and the Ka-band on this particular Inmarsat constellation does not have have a huge amount of throughput.
Panasonic is doing quite well in terms of their backlog and in terms of their vision on how many planes they have and how many they are outfitting. They’re moving fast.
Panasonic Avionics’s IFC market share over the last five years hasn’t changed much?
They have a dominant market share. With their capabilities and our platform and scalability, their deployment is higher now. It’s not just how many contracts you have, it’s also about how fast you commission an airplane onto a network. You need a lot of ground personnel to do it and they have the capabilities and also the scalability needed.
Whether it’s line-fit and put it into service or its a retrofit, they have all the capabilities and they have the network to support that roll-out speed. They don’t have a blocking factor, where the others definitely do.
I thought the blocking factor was the airlines not wanting to take their craft out of service.
That’s one factor, but Panasonic is the most capable company today in fulfilling their backlog, which is one aspect of market share — how fast are you signing up new contracts. The other is how fast can you put them in service. And Panasonic is the most capable one today to put them in service, more capable than any of the others we talked about.
Where are you with Eutelsat?
We see Eutelsat as a strategic partner and we’d like to move forward with them on everything from their media side, their fixed data side, their maritime and IFC ambitions and if possible also the broadband side too.
Is the ground segment still open on Eutelsat’s Konnect HTS and VHTS broadband programs?
The broadband is still to be defined. They do have Hughes as a mission partner, although not necessarily for the VHTS. And they’ve had them from before because they are using Yahsat capacity as well with HNS.
China’s aero IFC and maritime markets seem to be opening a bit.
You have to have really good partnerships in China to get the deals done. A lot of them are in some kind of joint venture or partnership. We see a lot of activities on the maritime side, a lot of potential, with more than 100,000 fishing ships.
The ecosystem in China is quite interesting. They have online markets, Alibaba style, for fresh fish. One of the initiatives is to connect the shipping codes to the exchange, to make sure the supply and demand is synchronized.
Would they agree to go outside China for that service?
To buy technology, yes. They have enough satellite capacity.
Does having ST Engineering along help you in China?
I think it does. We’re a European company by nature, and we’re a global player. iDirect is a U.S.-based global player. Then we’ve got a Singapore home. So we’ve got three regional HQs, which has helped our global presence. ST technology, and the relationship they have with other regions, is fantastic.
ST has wonderful technology. They’re in technology for harbors, port authorities, airfields. That’s obviously going to help.
Do you believe in the LEO broadband business model?
I don’t think there’s a good business case to start a LEO in the short term to do consumer broadband. But there’s good reason for just about every other market.
What’s one market that cries out for a LEO broadband solution?
The maritime industry can really use LEO capabilities, that’s clear, given that the LEOs cover the oceans pretty well.
Couldn’t a GEO operator can put up a satellite over the oceans if there was demand?
Yes, but on the other side if there’s a LEO constellation there and the economy of scale is such that it provides terabits over the ocean at a certain cost, and maritime and aircraft have the right equipment on board to connect to them, which is likely in the future, then it looks good.
There’s still some work to do on the antenna side.
If you look today at the antennas being supplied to maritime activities, they’re really trying to be forward compatible. That’s a word we’ll hear more. There are modems as well, they’re software defined and trying to be forward compatible with both GEOs and LEOs. That’s new.
Anything on the antennas side in the last year struck you?
I see a lot of discreet efforts, I don’t see anybody coming out, really.

Pending Telesat LEO test, C-Com says its flat-panel, electronically steered antenna could retail for $20,000 by 2021

Credit: C-Com
SINGAPORE —C-Com Satellite Systems Inc. drew a roadmap for its patented flat-panel, electronically steered, phased-array antenna that starts with an August test with Telesat’s LEO satellite and ends in late 2020 with a commercial product priced at around $20,000.
That $20,000 product would replace C-Com’s current 75-cm parabolic Ka-band antenna.
Outlining the company’s flat-panel progress at the ConnecTech Asia show here June 20, C-Com Vice President Drew Klein said $20,000 is still too costly for many promising applications with low-orbiting satellite constellations. But it’s a start.
“If we can get to that price with a flat-panel, electronically steerable product, it will cause a real shift in the market,” Klein said. Once we’re there, we can reduce the cost of the chips and that’s when the market can really take off.
Klein said the $20,000 price tag assumes a production run of 1,000 units or less.
“We’re shipping 1,000 units a year right nowise for us it’s not a huge number to get to that price point.”
Canada-based C-Com’s shares are traded on the Toronto Stock Exchange, which means the company has an obligation not to oversell its product status.
“We can’t just go out and say crazy stuff,” Klein said. “We need to at least tell you what we’re targeting so that our customer base can know what’s coming.”
Figures are in Canadian dollars. Credit: C-Com
C-Com is profitable and has reported substantial increases in revenue and profit in the past two years. It has sold more than 8,000 antenna systems, both fixed and mobile, worldwide.
Its most recent sale, valued at $4 million, is for 100 1-meter man-pack antennas and fixed motorized antennas to the Japanese government.
The company has provided product to many of the biggest names in the commercial satellite sector, including satellite operators Avanti, Eutelsat, Hispasat Hughes Network Systems, Optus, Telenor and Viasat.
C-Com came through the downturn in the oil and gas market in 2016 in apparently a stronger market position than before the slump. In its 2018 annual report, it told investors: Some competitors who suffered during the lead years of 2016 are no longer around. Others are looking for buyers to exit the marketplace.”
C-Com’s current core product is the iNetVu mobile antenna line, which the company advertises as the first one-button, auto-acquisition antenna.
Much of the satellite sector’s attention is now focused on the multiple constellations of low-orbit satellites for broadband connectivity that are being developed. Some of these constellations target corporate markets and specialized verticals such as maritime and aeronautical applications.
Telesat Canada’s LEO is one of these. A demonstration satellite is in orbit and has been used to test various ground technologies in advance of the launch of the full constellation.
Telesat has made no public announcements of any technology partners, or whether its partners would be expected to invest in the project in exchange for a contract.
Credit: C-Com
Other broadband constellations, including OneWeb, SpaceX’s Starlink and Amazon’s Project Kuiper, are aiming at a broad consumer market where a low-cost, flat-panel antenna that can track multiple satellites as they pass overhead is viewed as crucial.
Klein did not dispute this.
“While we will not be able to meet the exact gain and efficiency of a parabolic antenna, the cost, the lack of moving parts, the steerability and modularity of these antennas will have the potential to revolutionize this market. There are some systems in the market already that are not quite doing what we’re hoping to do.”
The Telesat trial, he said, “will be the groundbreaker for us and allow us to confirm that our Tx and Rx core module, and the modular size of the antenna, is working. From there, it’s the equivalent of a 25-cm antenna — we’re not going to close any loops on commercial satellites. But the nexts step is a 65-cm Ka-band equivalent system. Should that work, we’ll have a system that can close the loop  on most Ka-band satellites.”

Without its own satellite over Asia, Hughes aims at backhaul, maritime, 4G/LTE markets; says 5G’s ‘wonderful news’

Credit: Hughes Network Systems
SINGAPORE — Satellite broadband hardware and service provider Hughes Network Systems is targeting maritime, cellular-backhaul and rural-WiFi markets in Asia as immediate growth sectors as it waits for opportunities in high-throughput Ka-band broadband.
The company’s recent contract win in Indonesia and its maritime-connectivity license in India are examples of Hughes positioning itself for business beyond its established consumer and enterprise broadband markets.
In India in particular, Hughes is making do with extended C-band and Ku-band connectivity available on Indian satellites for the maritime service in the absence of a license to build its own Ka-band satellite for India.
Hughes officials gave updates of their Asia strategy and their approach to the arrival of 5G here June 19 during the ConnecTech Asia conference.
What appeared to be a step toward licensing a Hughes-ordered Ka-band HTS satellite for an India-based Hughes affiliate — an April  2018 ruling by India’s Committee for the Authorization and Establishment of Indian Satellite System (CAISS) — has gone nowhere since.
“The next frontier is obviously Asia” for Hughes, said Dan Losada, Hughes vice president for international sales. “We started with the Middle East, with a joint venture with [Abu Dhabi-based satellite fleet operator] Yahsat, with a joint venture for Africa, the Middle East and some parts of Europe. We added [Yahsat] capacity in Brazil, now managed by us.”
In Indonesia, Hughes was selected by five service providers who won bidding as part of the government’s Bakti Universal Service Obligation connectivity project.
Vaibhav Magow, Hughes associated vice president for Asia-Pacific, said the five Indonesian suppliers — Lintasarta, Pasifik Satellite Nusantara (PSN), Teleglobal and Telkom/TelkomSat — would use more than 7.2 GHz of capacity from several satellites to serve 5,000 LTE/4G celluar-backhaul sites and 3,000 broadband internet-access points.
The 4G/LTE piece will be for regions off the electrical grid. Magow said deployment would occur through the rest of 2019.
Magow said an RFP in the Philippines for dedicated satellite networks is an example of Asian nations’ gradual acknowledgement of satellite’s role in near-term connectivity projects. In the past, he said, this kind of contract would stipulate that a majority of the service should be from terrestrial networks.
Hughes recently won an award from Myanmar’s KBZ Gateway Co. Ltd. to provide cellular-backhaul service for an unnamed mobile network operator.
Hughes’s rural-WiFi service, which has teamed with Facebook in Brazil — — is now a high priority for the company. “Putting VSATs on every house and on every roof is not going to be feasible.”
Credit: Hughes Network Systems
Hughes’s Indian operation has been a story of both success and frustration. The Indian government’s willingness to move aggressively on broadband deployment has been repeatedly promised, only to come to very little.
In December, India opened the market for maritime and aeronautical broadband service. Hughes got an early license, which obliged the creation of an Indian gateway and the use of an Indian government-approved satellite.
Shivaji Chatterjee, senior vice president for enterprise solutions, said the maritime license opens a market of more than 1,000 commercial vessels under Indian registration, half of which operate internationally.
Up to now, Chatterjee said, Indian vessels had been using Inmarsat’s Fleet Broadband service, which operates in L-band.
Credit: Hughes Network Systems
Hughes will be rolling out a Ku-band service which is not high-throughput, but which Chatterjee said matches up well against Fleet Broadband on price and performance.
Hughes is continuing to deploy its 4G/LTE cellular backhaul service for Reliance Jio, now the second-largest mobile network operator with more than 300 million customer. Chatterjee said Reliance integrated satellite connectivity into its planning early on. The satellite service is using extended C-band, not normally considered ideal, but that’s what is available to Reliance Jio.
Chatterjee said Hughes continues to press for its Ka-band HTS satellite over India, to be owned by an India-based company. Hughes, he said, thinks a satellite network designed as a complete system gets to a lower cost per bit than systems that design the satellites and the ground network independently.
Credit: Hughes Network Systems
Like any satellite broadband provider — Hughes has 1.3 million consumer subscribers in the Americas — Hughes is concerned about the global attempt by terrestrial 5G operators to force satellite operators to share the 28-GHz spectrum. It’s a fight that is under way in the United States particularly.
The company is also eyeing which portion of mid-band spectrum will be allocated to terrestrial 5G, and how a satellite service can best operate as a consequence.
Dave Rehbehn, Hughes vice president of international sales, made clear that Hughes thinks the coming 5G installations around the world is good news.“5G is going to be wonderful for satellite, frankly,” Rehbehn said. “There is a threat related to 5G, with the MNOs around the world hoping to get as much spectrum as possible. Putting aside that, whether it’s C-band or some of the Ka-band, our view on 5G is that as it is implemented around the world, it’s going to drive the need for broadband.”
In this view, 5G installations in the metropolitan areas will drive demand for similar service outside the urban areas, where neither fiber nor 5G links will be available.
The mid-band spectrum to be opened up for 5G terrestrial will be unable to provide sufficient capacity to satisfy the rural demand, making satellite connectivity the necessary partner to MNOs in these regions.
Hughes is a small equity shareholder in the OneWeb constellation of low-orbiting broadband satellites, and in return won the contract for OneWeb’s gateway infrastructure.
Perhaps because of that, Hughes has diluted its GEO-HTS DNA and now thinks LEO broadband has a role in serving whatever latency-sensitive markets may be out there. The size of these markets is a subject of debate.
“But for the lowest cost per bit, that’s where GEO satellites line up very well,” Rehbehn said. “There’s lots of talk about electronically steered antennas [ESAs, for LEO broadband ground terminals]. The fact is we are probably never going to see an ESA cheaper than a piece of metal.
Hughes and other ground infrastructure manufacturers are working on dual antennas that can toggle seamlessly between GEO and LEO satellite links. But here too, the ESA will make these antennas too expensive for consumer applications, Rehbehn said.

Modem/antenna builder SatixFy’s Yoel Gat on LEO/GEO, Ku vs. Ka, and why IFC exclusivity deals are bad

SatixFy Chief Executive Yoel Gat. Credit: SatixFy
SINGAPORE — It’s not easy to separate the signal from the noise in the next-gen antenna and modem market, whose commercial availability is considered crucial for the deployment of many advanced satellite systems and all the consumer-focused broadband LEO constellations.
When will electronically steered flat-panel antennas be available, and what production volumes are needed to bring the prices down? For the aero market in particular, what level of interoperability is realistic?
SatixFy of Israel and Britain is one of the companies trying to crack the code, designing modems and antennas for a range of applications from narrowband IoT to mobile broadband. SatixFy recently announced an agreement with Airbus for the company’s SX 4000 ASICS to be put on Airbus’s advanced processing satellite payloads.
SatixFy Founder and Chief Executive Yoel Gat, who also founded Gilat Satellite Networks, said he is aware that industry over-promising in the past has not helped his sector’s credibility. But he clearly believes SatixFy, and perhaps others, are on the verge of a breakthrough if the right customer sets arrive.
Would you agree there’s a confusing picture of what is available now, what’s about to be and what will need several years of work?
I’ve been in this business close to 40 years and I’ve done a lot of products. I was the founder of Gilat. There’s a huge difference between a working prototype that shows your technology doing something, and a real product you can deploy and leave in the hands of customers without an engineer connected to it.
There’s a lot of noise around the next-generation antenna and modem sector. What distinguishes SatixFy?
We don’t just do the antennas, we also do the modems. There’s a big difference between prototype antennas that can perform demos and actual production antennas. On top of that they need to work with a modem, and fit into somebody’s ecosystem to provide a service.
Our antennas can work with other people’s modems. We have not built our antenna to be able to perform only with our modems. And we support it in a way you can connect it to the antenna seamlessly — like an L-band interface — in the way that regular modems are connecting. Now it’s a question of what we want to do and how we want to do it.
You have basically three product lines?
There’s a fixed IoT product which has been demonstrated, is working and is being offered to people who want to provide fixed connectivity to IoT from a GEO satellite.
We have a mobile IoT product which we’ll talk about, and we have an aero product.
There’s a big market for mobile IoT. People want to put it on their cars or moving platforms, which requires an antenna that can acquire the satellite and be able to provide the appropriate connectivity.
The LEO guys cannot work with fixed dishes. If they want to use dishes they need two dishes which are mobile — one gets one satellite, the other gets the rising and setting satellites. We call our flat-panel antenna the electronically steerable multi-beam array. It’s unique in that we can provide up to 32 beams. So we can connect to multiple satellites simultaneously and generate links to every one of those satellites at the same time.
That’s the reason why people want mobile connectivity for IoT. But I’m not aware of any current solution in the market that costs less than $10,000, just to pick a number. I think the real number is in fact much higher.
SatisFy’s electronically steered multi-beam array. Credit: SatixFy
You can buy expensive mechanical antennas and can put them on cars. They typically cost tens of thousands of dollars. This is really not a solution for IoT because people are looking for devices that cost hundreds of dollars.
That’s what we are trying to come up with in the right quantities. Our product today, which we will be selling, would cost hundreds of dollars — but only once the quantities reach a level that would justify it.
One of the problems in your sector is that some hardware providers predicted low-cost antennas but didn’t deliver.
That’s why you didn’t hear about us until we had a working product to demonstrate. We have a product working in the lab and a product that has already met a satellite. Most of our competitors cannot say anything close to that.
The demonstration was for fixed IoT?
We did a fixed IoT, we also did a mobile IoT on a regular Ku-band satellite, nothing special.
IoT needs a product that is a few hundred dollars. It can get there in large quantities. With many tens of thousands, preferably hundreds of thousands, the price is probably reachable.
Silicon economics is very good in quantities. Prices fall dramatically. It’s not like any other mechanical antenna that would drop in price maybe 10-20% for an order of magnitude increase in volume. We can get many, many tens of percentage points of improvement in the cost with quantities
Do you believe at least one broadband LEO constellation will be in service in the next 5-6 years?
It’s a tricky question. They’re all potential customers for me, and because of the uniqueness of our technology, we talk to all of them. We’re betting that the answer is yes. I want to believe. If you told me 2-3 years I would say no. If you tell me five years, then maybe the first one would start to have a decent service provided to people who need it.
All the guys that are building constellations are launching test satellites. These are definitely not the satellites that are going to provide the services.
Isn’t the customer premises equipment the real problem for most of these constellations?
I don’t think they think about the availability of ground terminals. OneWeb raised money after they launched six satellites — less than 1% of what they plan to launch. They’re not focused around the ground. They strongly believe that by the time they are up, there is going to be a good ground solution.
The problem with LEOs is that, to provide services to customers, you need all the LEOs in space if you want something that has no disturbance. That takes a full constellation launched — billions of dollars.
I’m sure that by the time this constellation will be launched, there’s going to be a few available solutions on the ground, and some of them will be good.
Give me an example of what your IoT solution looks like.
First we’ll talk GEO. We can do LEO no problem, if somebody has a full constellation. The terminals we will be selling in 2020 will work on the LEO constellations with the right modems, no problem at all. But we’re talking regular uses of IoT like Iridium, Globalstar, Inmarsat.
The difference between what they’re doing and what we’re doing is, if you want to buy an IoT service from Iridium or Orbcomm or anyone else, you would be paying 10 dollars for 30 kilobytes. We would be able to enable a service price that is substantially lower.
The demand for more and more capacity would not work on Iridium or Globalstar and probably would not work in the Inmarsat L-band infrastructure.
It wouldn’t work with the ground segment currently installed?
The satellite capacity is very limited. It cannot provide a megabyte per terminal just because of spectrum and architecture limitation. Inmarsat has 40 MHz. A constellation will have 2 GHz, a GEO satellite will have many GHz. it’s a huge difference in terms of the amount of capacity that you can get from a decent Ku/Ka-band GEO satellite. And that’s the market we’re targeting.
We’re aiming to come up with a reasonable price. It’ll be higher than Iridium or those guys at the beginning. But just as an example: For a security application, if there’s an alarm at a remote site where somebody opened the door, we can transmit a picture out of that, which they cannot do. Or even a short video signal or something that could be done on Ku/Ka-band satellite.
We can put a small antenna on a drone and transmit low-quality video from the drone. Which is something the other guys will not be able to do because they don’t have the bandwidth.
Near-term, which verticals will have the high-volume demands that can bring unit costs down?
Fleet management is one. Trucking seems like a good market for this kind of service, both for texting and GPS locations. Even information about the car itself accumulates to a certain amount of megabytes. Oil and gas is an interesting application, for both mobile and fixed. But the way to do it is to reach the right distributor who sells to those guys beyond cellular coverage. Because wherever there is cellular coverage there is no way for you to do anything.
Most of Orbcomm’s transmissions are through cellular not satellite.
Cellular is so big, it’s tens of billions, and we’re talking millions. There’s enough capacity beyond line of sight, ships, containers, plenty of applications.
What is a big hurdle that still lies in front of you?
It’s not the antenna. The antenna is available and it’s working. Our biggest issue is to find people that have the service infrastructure that enables them to put such small antennas onto your satellite. Nobody has done it on any significant scale until today, no one. It’s like a waveform that would not interfere with an adjacent satellite because the antenna is very small and it transmits and sees a few satellites. You have to spread the signal to make sure it’s not going to interfere with adjacent satellites.
We can show a point-to-point connection with, say, an SCPC modem through the use of very low signal-to-noise ratio, which is a standard that’s available. But it’s not something that can generate a service for tens of thousands, hundreds of thousands, because you don’t want to create a link that is one-to-one to each device, you want a multi-access network that can determine access only when you need it.
Today there’s no such solution on a large scale. We’re turning over every stone with anybody who is close to that solution. But at this moment, there is no infrastructure that enables use of Ku/Ka-band satellite in a mass scale for IoT applications. That’s what’s holding us up, not antennas. I think it’s a problem that will be solved in the next year.
None of the solutions we’re talking about here require a dedicated SatixFy antenna onboard the satellite?
No, just regular satellites, regular LEOs.
Credit: SatixFy
Let’s talk about the fixed market. There are lots of IoT hybrids. Unless there’s a NewSpace crash, it looks like some of them to get into orbit to serve remote locations where they need very low bandwidth and intermittent coverage.
Why are they better than Iridium?
They have a much lower cost basis.
Iridium can reduce their price dramatically. It’s market pricing, it’s not because they cannot reduce their price. They can, and they will.
But this is just pennies or a few dollars a month per subscriber, which won’t move the needle at Iridium.
We have decided to focus only on the large guys that are doing the LEO constellations.
At the point when the smaller IoT constellations are well-funded and ready to give us an order, we’re absolutely happy to work with them. I just don’t focus on working with them. That may cost me business maybe when they are up and running, and I have to live with that, because maybe they’re working with competitors and I have to focus on the bigger guys, not them. I have not been convinced from discussions with a few of those constellations that they have a business model that would survive fighting with Iridium and Globalstar and Inmarsat.
You mentioned oil and gas and trucking as verticals that need more bandwidth and can pay a higher per-megabyte price, with product volumes in the hundreds of thousands, not millions.
The most visible one that we’re not working with, but we will, is the drone industry. They can’t control the drone BLOS. We can solve this problem with our technology. It’s small enough. We’re talking about bigger drones that need to carry equipment and do stuff outside of the line-of-sight. We can solve this problem. They need tons of data and that we can provide it.
Commercial, civil?
Commercial drones. I’m not stating we’re doing it. It’s just a very visible example. Nobody has a solution for that. They do cellular, that’s all they can do. If they go out of the cellular coverage for any reason, they’re gone.
The people that only need it for control, they can probably live with Orbcomm or Iridium and we will only be able to compete with them when our price-point reaches their price-point. That’s not the initial market we’re looking for in IoT.
Where is your fixed product now? Are you ready to sign a contract for volume production on receipt of an order?
The antenna itself is not a problem now. If it’s not this quarter, then next. We’re close. We’re building hundreds of units and we’re testing them in multiple environments and we’ll be done with all that part in a few months.
Any customers you can mention?
Not yet. We talk to a lot of people. But we need somebody that can offer a full solution. We also have to be convinced they can deliver. Because if they don’t deliver we’re stuck. If we have the greatest antenna in the world but we cannot provide service, what’s the point?
What’s the estimated cost for a first order?
Initial quantities will cost a few thousand dollars, but in large quantities it will get to a few hundreds of dollars.
And by large, you mean…?
Let’s say 100,000, just to have a number. Not 5,000 but also not 5 million.
That sounds like something a company like Caterpillar can handle.
They are a great example of a possible customer.
They’re involved with Iridium and Orbcomm.
They cannot do with them what they can do with us. As long as they only want to control the diagnostics, that’s good enough. But if they really want to start transmitting video from the ground, or doing more processing, then it just would not work. This is not about pricing, it’s about the basic technology.
In-flight connectivity is a long regulatory road and a tough market.
It’s probably our biggest opportunity. Today a few thousands planes have internet on them. They’re all based on mechanical products, and the service quality is not good.
It has gotten a lot better.
Yes it has. But the expectation is at one point the services will be free, and 50% of the passengers will be connected and will expect the quality of service that they have in their homes. That requires something like a Gbps per plane, or at least many hundreds of megabits. And nobody is even remotely able to do that today.
And there is the problem with mechanical antennas. They take days to install. And they need fixing. A plane on the ground costs a lot of money.
Everybody talks about the day that all the antennas on the plane will be electronically steered, 5 cm high, minimal drag, very high reliability, shorter installation cycles and a lot of other good things that would happen. We’re definitely chasing it with our technology.
Do you need to go through an aero-IFC service provider?
Zodiac is saying they are working with us on a Ku-/Ka-band product. So we have a first customer that we’re working with.
They’re talking about Inmarsat’s Ka-band Global Xpress?
That’s the one they’re going after first.
GX has capacity issues.
That’s only for the current generation. They’re launching a new generation in 2021. And this is about as early as you’re going to have phased array antennas on planes. By then they’ll have much more capacity. They’re doing the right thing in my view. They are focused on airlines, on the service, they have limited capacity but they’re not signing up too many people. They can provide a reasonable service and then they’ll come with a good satellite and have a big go at the markets.
They’ll have a dedicated Ka-band fleet that is going up. It’s not only aero but I think that’s the number one area for them. They signed a deal with Panasonic on this and Panasonic is exclusive to them on Ka-band.
An Inmarsat GX satellite. Credit: Inmarsat
Can you explain the Panasonic-Inmarsat agreement?
Let me try. In five years’ time there’s going to be at least10 times more capacity in Ka-band than in Ku-band. Eventually, the choice for airlines over the long haul is going to be primarily Ka-band. It’s not the case now, because of satellites like Intelsat Epic, SES and others. There’s a lot of Ku-band capacity, there’s a lot of Ka-band capacity. But if you look at what’s planned to be launched, and how people think about it, they’ll really go to Ka-band.
Ka-band has weaknesses and advantages. The biggest advantage is it has much more spectrum and then they can do a lot more. That’s something you cannot take from them. So this is why Ka-, over the long-haul, is the right path.
How does that play for Panasonic, which has a large installed base of Ku-band?
Connectivity is an add-on to them. Same story for Zodiac, they need the connectivity to sell a single solution to an airline or anybody else. They’re the biggest one, they equip most of the planes, their service quality may be lacking — but they’re well-positioned.
Like everybody else, they lose money on the connectivity. But they have market share, which could be key in a gold rush. And they have come to the conclusion that they’ll eventually have to go to Ka-band and that Inmarsat will be the winner in Ka-band. However, they continue to install Ku-band.
When will your aero Ku-band antenna be ready for certification?
In mid-2020 we will have an antenna ready. That’s the first one we’re coming up with. It’s like a scaled-up version of our current IoT antenna — same design, just much bigger.
Is 2020 soon enough to catch the wave of reasonably sized airlines that will be selecting their IFC partners? These guys don’t want to switch out equipment every few years.
The answer is yes. They’re not going to change the technology on the plane every two years, and maybe not every 10 years. These guys think very long term. Currently the amount of planes connected to the internet compared to the whole plane population is small.
Then there’s new planes coming every year. They think in terms of 10 years forward. They look at all the technology and try to place their bets as to what’s going to be available. There’s also the angle of who’s going to be selling and how it’s going to be fitting. The airlines are really trying to figure out who’s going to win.
The fact that we can demonstrate something to them is a huge thing, even though it’s not exactly the size for what they want to do.
More importantly, we can show them a plan. As we hit the milestones and demonstrate the things we’re saying we’re going to be doing, the confidence in a solution based on our technology increases.
The market size is many billions of dollars, if it materializes. I’m less concerned about losing business today. In terms of the total size, it’s just the beginning. I’m much more into figuring out the right solution, putting our unique selling propositions in a way that people that are buying would appreciate, and making sure they see how we meet our commitments, and being able to put it in a way that they will be happy. That’s what we are doing.
But you’ll do all these through the established service providers.
Yes, but not necessarily just one. There is a tendency in this industry, which I don’t like, which is called exclusivity — Newtec selling modems exclusively to Panasonic or ThinKom selling antennas exclusively to Gogo.
I can understand it from the service providers’ perspective if they have a better technology, which I’m not sure they do. I don’t think it’s the right thing for the equipment guys. But the fact that everybody is doing it creates a problem. So we’re trying to figure out ways that would get our partners something that they would be happy enough to work with us on and hopefully grant us some leeway going forward in the market.
You argue that volume brings down prices and to get volume you need to avoid exclusive deals?
They will say it’s not true, but the price point is not the number one criteria. It’s an expensive business. Putting an antenna on a plane is something that costs many, many hundreds of thousands of dollars between start and finish. So it doesn’t really matter if the antenna will cost $10,000 or $20,000 less.
Our idea is that we’re going to get scale from everything — from IoT, from the LEO guys, if they arrive. And there will be consumer networks we’re going to get scale from. So this will not convince them.
What we’re saying is: If you don’t pay for it and we’re doing all the development on our own and we come up with a product, what is the justification that we should give you exclusivity? We can give you some time-to-market advantage or whatever do something to help you get going, but give us the rationale why we should give you exclusivity. The fact that everybody else is doing it, I don’t know why they are doing it.
I don’t think those deals are even good for the service providers, because I don’t think Gogo is exclusive to ThinKom. ThinKom is exclusive to Gogo, but Gogo can buy anything they want. The fact that they have a strong relationship with ThinKom and buy ThinKom antennas and are publicly not happy with them shows why this is not a good idea.
Our message: Please compete on other things than just the technology of the antenna.
You have to measure who wants the deal more.
It’s true, because they can say: We’ll give you an order for X amount of antennas, but only if you don’t give us exclusivity. We’re not at that juncture yet.
The IFC business almost drove two of the players into bankruptcy and badly destabilized a third. Do you see a day when this gets profitable for everybody?
Absolutely, yes. And sooner rather than later. Airlines will have to provide internet service for free on planes. Once the first one does it, the others will have to follow suit. Then they have to figure out a way to fund it.
How is the burden then going to be split between the service provider and the equipment provider? It’s definitely going to put pressure on the equipment provider to lower pricing. That’s why we’re focusing on cost even though it’s not a big deal today in IFC antennas. We think it will be a much bigger issue going forward.
We’re trying to see what we can do now to get to that point. But how will the business work? I don’t know. I’m just sure that over the next 10 years it will become a “must” to have antennas line-fit on planes. You’ll expect internet on the flight just like you expect food on the flight.
They have to figure out how to do that. Luckily for me this is not my problem. I hope they all will need equipment. And we can help by reducing the price, but again, the price of the antenna is a small part of the whole thing. It’s a problem that is bigger than us.
How is the price of the antenna not important?
We’re building an antenna that is fully future-proof with all constellations. For example, the antenna that we will put on a plane in 2021 or 22 will be compatible with OneWeb, let’s say Ku-band, and SpaceX, etc. It doesn’t mean you will not have to install a different modem on your plane, but that’s not a problem, it’s like a two-hour thing.
We claim we can do multiple beams, so we can work with a couple of LEOs simultaneously, and one or two GEOs, all at the same time. So we can generate multiple beams toward multiple satellites and work with multiple links simultaneously. Everyone in a different direction, different polarization, everything. That’s something no one else can claim.
The best part of our story is that if you have infrastructure which is available on multiple satellites then there’s no reason that an airline will not be able to do a reverse option when the plane is flying. They will ask who is going to give them the least expensive service for this flight, and as long as they have the right infrastructure, they will be able to change between satellites throughout the corridor seamlessly because we do multiple beams so we can switch easily.
Today it’s a big problem, I go across the Atlantic all the time. There’s a certain point when you disconnect, and then it’s hours until you connect again, because they switch satellites. It doesn’t work smoothly. That’s not the intent, they work well on a single beam. That’s a problem Viasat is facing with multiple beams. It’s completely solvable but it’s just a new problem to have right now. We have a solution for that because by the time you switch between satellites, there are other satellites you can work at that time. So we have a totally different story with regard to the grade of service that you give to the passengers on the plane. That’s our technology.
ST Engineering is buying Newtec. Does that change anything for you?
To the best of my knowledge, no. It depends on how the integration is going to pan out. I think it will take months before we will understand what it means for us. We don’t see it as a negative at all.
It depends on who will be the CEO, the CTO, and their view on the topic. It will be awhile before we can comprehend the impact on us.
Does your mobile comms-on-the-move product differ much from aero?
It’s actually an easier product. It’s for military operations going to a different country, it’s for police, people who have cars that are going into areas that have no connectivity or that are not controlled by friendly other people. Today, they use ugly big mechanical antennas. People shoot at those antennas. If you put a nice, 5-cm antenna that you throw something on it and you don’t see what’s down there — the market would love to have those.
And this is an easy ecosystem because they can use anybody’s modems. It’s ecosystem like in aero or in IoT. We can provide the complete solution.
Would you need a partner for the US DOD market?
We need distribution into it, but not technical support. We’re an Israeli company and possibly a UK company. We don’t have a direct presence in the US yet. But there’s other countries, we talk to other organizations in the UK, Israel and other places. I think we’ll start selling into it. We’re sitting on unique technology which is demonstrated by multiple things, including the quality of our partners that you don’t yet know, but you will in a few months. It will not take much time until you hear about the things we are doing.
Our biggest issue is we have limited execution capability. We have to get the product right from the get go. We’re building our own chipsets and our own product and we write our own software. And there’s a limited number of products that we can build simultaneously, so we have to focus. This is why IoT is one, aero is two and land mobile is three. If we have a good customer that will be able to take what we have without a lot of customization, and with good pricing, we’ll work with them, and if not we’ll just stay focused on the markets that we’re in and we’ll execute well on those.
When will this be available?
We have a product ready to be demonstrated on a car, immediately. It works, it’s a good demo, we just want to talk to people about what size they need to what kind of performance, how much they are willing to pay for that and then we’ll make a decision if we’re pushing it as soon as we can.

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