New! "Under the Radar"
Venture Capital Opportunities Feature
Volume IV, No. VIII September 2019
Table of Contents
Industry Trends and Analysis: (pg. 3)
Patee Sarasin, former CEO of Nok Air:
"Unlocking the Riches of In-flight Wi-Fi" (pg. 4)
David Bruner, former V.P. Panasonic Avionics:
"Buckle Up! :Turbulence Ahead in Airline Connectivity Markets"
"The Promise of the New Iridium and Aireon Services: Big Advancements in Air Traffic Management on the Horizon" (pg. 26)
Ernst Peter Hovinga, CEO Hiber: "Disrupting the Satellite IoT Connectivity Market: The Promise of Hiber" (p.31)
"Upcoming and Recommended Satellite Mobility Events"
Highlighting Disruptive, New, Mobility-Focused Satellite Ventures and Technologies
In This Issue...
"5G: Battle for Billions: A Windfall for CBA or the U.S. Treasury?"
Under the Radar: VC Opportunities Page
"Speedcast: Value Overlooked as the Share Price Collapsed"
"Connecting Mobile Phones to Satellite: Lynk's Breakthrough Solution to Reach the Un-Served"
"Teleports for LEOs: ThinKom's Innovative Antenna Solution"
"LeoLabs: Conquering the Threat of Space Junk"
Satellite mobility World
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Table of Contents...
"Hot News and Commentary" (pg.3)
"Under the Radar: Venture Capital Opportunities" (pg.5)
Editorial : "5G: Battle for the Billions: A Windfall for the CBA or the U.S. Treasury?" (pg. 5)
"Speedcast: Value Overlooked as the Stock Price Collapsed" (pg. 7)
"Connecting Mobile Phones to Satellite: Lynk's Breakthrough Solution to Reach the Un-Served "(pg. 16)
" Teleports for LEOs: ThinKom's Innovative Antenna Solution"
"LeoLabs: Conquering the Threat of Space Junk" (pg. 32)
Recommended Upcoming Industry Events
Welcome to September! There's a lot happening in the satellite industry. In Q 4, there's a good possibility that the battle over re-purposing the 3.7 - 4.2 GHz spectrum will finally be resolved. It's been a tough fight, and we're covering the latest rounds in our editorial, 5G: Battle for Billions - A Windfall for the CBA or the U.S. Treasury?
Next, we look at Speedcast. What caused the sudden precipitous decline in its stock price? Is the stock a bargain? In a critical analysis, we'll look at the company and its future.
Turning to exciting, new companies and technologies, we have in-depth interviews with the CEOs of Lynk (formerly, UbiquitiLink) and LeoLabs and a look at Thinkom's innovative solution for LEO teleports - use of its VICTS antenna in place of massive "dishes."
Lynk 's connects ordinary mobile phones directly to a satellite. Using satellites as cellular towers in the sky, the company smashes the assumption that an ordinary mobile phone cannot connect to a satellite. Well on its way to providing an SMS-based service from space, it has raised over $12 Million in Seed capital. Another company we are excited about is LeoLabs.
It's is in the business of space traffic management. LeoLabs is the leader in attacking the growing problem of space debris in LEO orbit. Using phased array radar, they will soon be tracking over 200,000 objects and providing collision alerts, potentially saving the industry millions of dollars. Join us for this exciting September issue.
Satellite Mobility World
Published by Gottlieb International Group, Inc.
Arlington, VA USA
Gottlieb's Satellite and Mobility World is published monthly (except August) by Gottlieb International Group., Inc. Suite 100, 1209 South Frederick Street, Arlington, VA USA 22204 © Copyright 2019
SATELLITE MOBILITY WORLD
"Hot" News and Commentary
Softbank Takes £380 million Write-down on 2016 OneWeb Investment
August 10, 2019: The Sunday Telegraph just reported that earlier this year Softbank booked a £380 impairment loss against its initial 2016 investment in OneWeb and that some initial investors have taken substantial losses. That's no surprise, and we believe it's just the beginning. Faced with increasing competition, huge regulatory hurdles, and an obscure target market, the satellite venture is struggling to find its footing.
Finally, realizing that to survive it needs high paying commercial customers rather than the poor, it's racing down the same path as O3b and finding out that it's not so easy to find market niches large enough to justify its much larger, 1.2$ billion vs. $5 billion, initial investment, let alone the costs of reconstituting the constellation five years down the road. It's little wonder that ECAs debt funding is not in the financing mix and that Softbank had to lead a second round of investment to keep the project going.
As we mentioned in a previous article, it's very lucky for Intelsat that their ill advised merger with OneWeb failed. Had it gone ahead, for its second round equity investment, Softbank would have almost certainly have demanded an increase in its initially proposed 39% stake to a controlling interest in the combined companies.
OneWeb's JV Withdraws Application for Frequencies in Russia - Faces Security and Competitive Issues
August 5, 2019: Facing increased opposition from the Russian Security Service and competitive issues, OneWeb has withdrawn its application for the frequencies it needs to operate in Russia. While the venture has yet to be denied the right to operate its service, it has been trying unsuccessfully to gain approval since the end of 2017. In April of 2018, Roskomnadzor opposed the constellation on the basis that its operation could lead to interference with other space systems. More recently, the Russian Security Service expressed concern that the constellation could be a threat to national security. It's apparent that Russian law enforcement is not comfortable with a foreign Internet provider that will be difficult to control, even if the traffic is passed through in-country ground stations. There has even been talk about creating a separate Russia only Web unconnected from the World-Wide Web.
In addition, under Russia's national program to create a "Digital Economy," the country wants to launch its own telecommunications satellite system called Sphere, consisting of more than 600 communications satellites. While it is clear that OneWeb will likely submit another proposal aimed at satisfying Russian requirements, the complex aggregation of security and competitive issues make it unlikely that OneWeb will gain the right to offer its service in Russia.
Speedcast International Ltd (ASX:SDA) Enhances Debt Funding Structure
Sydney, July 30, 2019 - (ABN Newswire) - Speedcast International Limited (ASX:SDA), the world’s most trusted provider of remote communication and IT solutions, is pleased to announce that it has received majority consent from its Revolving Credit Facility (“RCF”) lenders to amend the ! financial covenant applicable under its Senior Secured Facility. The amendment increases the maximum Net Leverage Ratio (net debt to EBITDA) from 4.0x to 4.5x, and applies from the period ending 31 December 2019 through to, and including, the period ending 31 December 2020.
The Net Leverage Ratio is the sole financial covenant under Speedcast’s Senior Secured Facility, and applies when drawings under the RCF exceed 35% of the RCF limit. Under the relevant agreements, the Net Leverage Ratio is calculated on a proforma basis and includes the proforma benefits from the Company’s recently announced reorganisation initiatives.
The maximum Net Leverage Ratio in the financial covenant will reduce from 4.5x back to 4.0x upon payment of any dividends or certain other restricted payments (such as discounted buybacks).
While the Company does not expect its Net Leverage Ratio to reduce in 2019, it is a key management priority to reduce it in 2020!
The Board remains confident that Speedcast’s Net Leverage Ratio will be below 4.0 x at the end of 2019. The added headroom provided by increasing the maximum Net Leverage Ratio to 4.5 x provides greater certainty that the Company will continue to meet its financial covenant and not require additional equity to be raised.
AsiaSat Shareholders Approve Privatization Proposal
Hong Kong, 23 August 2019 - Bowenvale Limited (“Bowenvale”) and Asia Satellite Telecommunications Holdings Limited (HKSE: 1135; 1135.HK “AsiaSat”) jointly announced that the proposal for the privatisation of AsiaSat by way of a scheme of arrangement (“Scheme”) has been approved at the Court Meeting today. Approximately 99.98 percent of the shares held by the shareholders of the Company other than Bowenvale (the “Scheme Shareholders”) that were voted in person or by proxy at the Court Meeting were voted in favour of the privatisation and a majority of the shareholders voting in person or by proxy on a headcount basis also voted in favour of the privatisation. Subject to the Scheme becoming effective, the Scheme Shareholders will receive a cancellation price of HK$10.22 per share in cash.
Proceeding to the next step of the privatisation, AsiaSat will seek the sanction of the Scheme at the court hearing of the petition on 30 August 2019 (Bermuda time). Assuming the Scheme is approved by the court, it is expected that the Scheme will become effective on 3 September 2019 (Bermuda time), whereupon AsiaSat will become a private wholly-owned subsidiary of Bowenvale, and the listing of the shares in AsiaSat on The Stock Exchange of Hong Kong Limited will be withdrawn on 5 September 2019.
ThinKom Unveils New Multi-Beam, Re-configurable, Phased-Array Gateway Solution for Next-Gen Satellites
An “Array of Arrays” Gateway Antenna Can Support Multiple Moving LEO Satellites More Efficiently than Current Parabolic Dishes
HAWTHORNE, Calif. – August 14, 2019 – ThinKom Solutions reveals its new innovative solution for efficient and effective land-based gateways designed to accommodate current and next generation low-Earth-orbit (LEO) and medium-Earth-orbit (MEO) satellite constellations.
The new gateway concept, which ThinKom describes as an “array of arrays,” will provide a superior alternative to the large “antenna farms” of parabolic dishes currently used for support of geostationary (GEO) satellites. It is based on ThinKom’s proven phased-array antenna technology, which is currently in use on over 1,300 commercial aircraft installations worldwide, in 10M+ hours of proven high-reliability operation.
“The proliferation of cubesats, nanosats, microsats and other miniaturized satellites will require a new way of thinking when it comes to gateway antenna technology,” said Bill Milroy, Chairman and Chief Technology Officer of ThinKom Solutions. “The answer is not to deploy more and larger dish farms. Instead, we’re proposing an entirely new paradigm that’s designed for the future yet employs currently available proven phased array technology.”
Limitations of Dish-Based Gateways for LEO Networks
Current-generation gateways employ large parabolic dishes which are necessarily limited to one link per dish. Further, they are unable to repoint quickly to a different satellite, given their complex drive mechanisms. These legacy systems are large, heavy, expensive to install and maintain, and can take months to deploy.
Additionally, they are adversely affected by wind, snow, and ice loading and typically require a substantial concrete foundation or reinforcement of roof structure to support the weight and uplift forces of several thousand kilograms resulting from even moderate wind conditions. These multi-dish gateway sites must allow for sufficient separation in order to avoid dish-to-dish blockages, often requiring a relatively large swath of real estate (as illustrated below).
New Paradigm: An Array of Arrays
ThinKom’s approach uses multiple, tightly arranged, phased-array antennas, which are coherently (and reconfigurably) combined. The antenna units work together to track multiple LEO, MEO and GEO satellites simultaneously with look angles between 5 and 90 degrees in elevation and full 360-degree coverage in azimuth.
The software-defined system is re-configurable in that a single array is capable of supporting multiple links, modifying the number of beams and radiation properties dynamically to meet the link budget and throughput demands of the ever-changing number of satellites in view. It does all this without the high-power consumption of electronically scanned arrays, which is a critical feature in areas that rely on solar power or are otherwise energy-constrained due to geographic location.
The array, to be initially deployed in S- and X-band operation (with higher frequencies brought on line as the market demands), is constructed in a fixed convex shape in order to provide maximum low-elevation coverage and minimize signal blockage while promoting the shedding of rain and snow. The visual signature of an array is less than two meters tall serving to eliminate the effects of high wind conditions and the footprint for a typical array (equivalent to eight 2.4-meter dishes or three 4.5-meter dishes or any mixed combination) occupies less than seven square meters, uniquely enabling flexible deployment in areas with limited real estate, such as rooftop locations.
“This radical new gateway concept is inherently flexible and scalable with far lower installation and maintenance costs,” said Milroy. “The low power and built-in redundancy provide greater reliability without routine maintenance, and individual units are hot-swappable in order to minimize or even eliminate downtime.”
“Most importantly, we’re not out to reinvent the wheel. This solution uses our patented, proven phased-array antenna technology that is in service today, minimizing R&D and time-to-market,” he added.
The Government of Canada and Telesat Partner to Bridge Canada’s Digital Divide through Low Earth Orbit (LEO) Satellite Technology, Over $1 Billion in Revenue for Telesat expected
OTTAWA, CANADA, July 24, 2019 – Telesat and the Government of Canada have partnered to ensure access to affordable high-speed Internet connectivity across rural and remote areas of Canada through the development of Telesat’s LEO Satellite Constellation. The partnership is expected to generate $1.2 billion (CAD) in revenue for Telesat over 10 years, which includes a contribution of up to $600M (CAD) from the Government of Canada, supporting the company’s mission of deploying a transformational communications architecture that delivers affordable, high-speed broadband services across Canada and the rest of the world.
Additionally, the Government of Canada will contribute $85 million (CAD) to Telesat through the Government’s Strategic Innovation Fund (SIF). Telesat, as part of the agreement, will support approximately 500 jobs in Canada, invest $215 million (CAD) in R&D over the next five years, and promote STEM jobs and education in Canada through a newly created scholarship, university partnerships and other initiatives, with a strong focus on creating opportunities for women.
Hyundai Global Service and Intellian Sign Strategic Partnership in Satellite Communications
July 16, 2019 – Intellian, the global leader of mobile satellite communication antenna systems, signed a strategic partnership in satellite communications with Hyundai Global Service (HGS), a marine engineering & service provider and subsidiary of world’s No.1 shipbuilding company Hyundai Heavy Industries (HHI) group, on July 15 at Centum Science Park in Busan, Korea.
As the first step of the cooperation, both companies will expand HGS’ innovative ‘Integrated Smart Ship (ISS)’ solution; a digital ecosystem for vessel and fleet management, incorporating a powerful data analysis platform. This solution supports optimal vessel operation and management and is expected to reduce fuel costs by over 6% per year. With vessel lifespan varying based on how they are managed, smart ships with integrated digital platform capabilities such as the 'ISS' are more appealing to ship owners looking to reduce costs and environmental impact by optimizing operational efficiency.
HGS secures the satellite communications service, which is fundamental to ‘ISS’ solution, ensuring it can provide smart services whenever and wherever they are needed. Intellian provides the most innovative satellite communication antenna systems with high resilience and RF performance enabling fast and reliable transmission of large amounts of vessel data to shore. Moreover, utilizing Intellian's innovative technology and unmatched global service network, HGS managed vessels can be confident of high availability of service world-wide.
A key aspect of the partnership is Intellian’s ability to provide full life-cycle support to the vessels under HGS management spanning, from monitoring and maintenance to the general services. Intellian VSAT antennas will be provided to all existing and new HHI ships as a standard package. Further, both companies will begin a full-fledged sales and marketing of 'ISS' solution & satellite communications system to various maritime markets mainly merchant, energy, etc.
Kwang Heon An, CEO of Hyundai Global Service, said, “With the integration of Intellian’s satellite communications antenna technology and our differentiated ISS digital ship management system, we are well positioned to initiate a paradigm-shift in how ships are operated and the value that shipping companies can achieve from previously unobtainable efficiencies.”
Eric Sung, CEO of Intellian, added, “We’re delighted to build a strategic partnership with HGS. We are confident that our innovative technology and global service network is at the forefront of the smart ship market and our collaboration with HGS is integral to securing this leading position.”
Both companies have also agreed to co-develop new smart antennas with the aim to ensure on-going improvement to the ISS solution, while enabling HGS and Intellian to respond to customer needs.
Gilat Achieves Critical Milestone in Peru with Approval to Enter Operational Phase, Unlocking Access to Revenue of ~$12 M per-Annum from Telecom Project Awarded in 2015
Petah Tikva, Israel, July 29, 2019 — Gilat Satellite Networks Ltd. (NASDAQ, TASE: GILT), a worldwide leader in satellite networking technology, solutions and services, announced today that it has reached a critical milestone in Peru with approval to enter the operational phase of the three-region telecom project awarded in 2015
for an aggregate value of $285 M. This phase enables the start of delivery of broadband internet services to over half a million people in the three regions. Entering the operational phase will enable Gilat to unlock access to revenue of ~$12M per annum of operations fees, for a period of ten years, as well as to start selling services over the network.
“I am most pleased to receive approval from the government of Peru, to enter into the operational phase of the projects in Huancavelica, Ayacucho & Apurimac,” said Arieh Rohrstock, General Manager Gilat Peru and Corporate VP. “This significant milestone marks the realization of our objective to turn Peru into a source of secure, multi-year, profitable revenue, both from operational fees as well as the sale of additional services over the network, as we deliver on our corporate values of contributing to bridging the digital divide in Peru and worldwide.”
The inauguration events in Peru for start of delivery of broadband internet in support of social development, e-health and e-learning were widely celebrated in the presence of Peru’s President, the Transport & Communications Ministry and the Regional Governments. The huge project will supply connectivity to one thousand towns in the three regions, through the deployment of almost 5,000 km of fiber optic and the use of Information and Communication Technologies (ICT). The network will also provide cellular backhaul to allow mobile network operators to reach distant villages for 3G/4G broadband mobile services to satisfy the need for the same mobile connectivity services as in the urban regions. Furthermore, during the project’s operation, over 4,000 representatives of schools, health, post and police stations will receive training.
The President of Peru, Martin Vizcarra said in the inauguration speech: “We are committed to working on the physical roads that connect us with cars, trucks and buses, but we need to move forward in the technological race as well, which is optic fiber, the broadband that through a wire, carries the knowledge.”
In the inauguration ceremony in Apurimac the Transport and Communications Minister discussed the focus on delivery of internet for the children’s health and safety, and commended Gilat as follows: “I want to emphasize that the collaboration of the government with the private company, Gilat, brought about the successful fiber optic project, and that without Gilat’s commitment, work and faithful fulfillment of responsibilities the state could not make this project happen,” Said María Jara, Minister, Transport and Communications.“
Thales Becomes the Exclusive Communications Partner for IMOCA Class, Around the World Yacht Racing
More than 30 skippers worldwide will rely on Thales as they pilot their vessels in extreme, open-sea environments to compete in the IMOCA Globe Series World Championship
Thales will equip its VesseLINK™ solution on all IMOCA Class vessels as the official communications partner for the racing circuit
Skippers will be able to communicate and navigate during each race with VesseLINK to improve their safety at-sea
July 30, 2019: Thales announces it has become the official communications partner for IMOCA through 2021 to support the big ambitions of skippers competing in the IMOCA Globe Series World Championship. Now more than 30 world class skippers from around the globe will rely on Thales for decisive connectivity technologies as they pilot their vessels in extreme, open-sea environments.
Mastering the complexity of providing global, offshore connectivity to skippers anytime, anywhere, Thales will be installing its VesseLINK™ solution on all IMOCA Class vessels. This rugged, small, and light-weight solution will support competitors as they push the human spirit to the-edge in a series of races recognized as the world’s foremost circuit for shorthanded offshore and around-the-world racing – including the 2020 Vendée Globe.
“Skippers in this circuit face some of the most extreme weather conditions on the planet and our VesseLINK solution will be right there with them to make their journeys better, and keep them safer,” said Mike Sheehan, CEO of Thales Defense and Security, Inc. “We are excited for the upcoming races and are proud to be able to support the IMOCA Class.”
The Thales VesseLINK solution will allow skippers to access the highly reliable Iridium Certus® service which is the only truly global satellite communications network. With the full worldwide coverage offered by Iridium®, skippers will be able to stay connected and soon access the fastest upload and download speeds available in this segment of satellite communications.
No matter where they sail, skippers with the VesseLINK solution will have these faster connectivity speeds at their fingertips for more enhanced communication allowing them to think smarter and act faster during races for safety and piece-of-mind while at-sea.
“We are very proud to announce Thales and Iridium as the ‘Official Communications Partners’ of the IMOCA Class. The Iridium Certus satellite broadband service combined with the Thales VesseLINK solution modernizes the communications capability of IMOCA yacht skippers sailing around the world. The skippers of the IMOCA Class are preparing for several races over the next two years. The preparation also includes one of the greatest challenges in sport: The Vendée Globe, which is a singlehanded, nonstop, around the world yacht race. We see a synergy in our mutual core values, technology, performance and human endurance. The partnership is the start of a valuable relationship between Thales, Iridium and the IMOCA Class,” said Antoine Mermod, President of IMOCA.
Thales and Iridium will support five major races in the circuit as the official communications partners, including:
Rolex Fastnet Race: starting from Cowes on August 3, 2019
Transat Jacques-Vabre: starting from Le Havre on October 27, 2019
The Transat: starting from Brest in May 2020
New York-Vendée: starting from New York on June 13, 2020
Vendée Globe: starting from Les Sables d’Olonne on November 8, 2020
This partnership continues to solidify the Thales presence in the satellite mobility industry by delivering the extraordinarily high-technology solutions that customers rely on to deliver the possibilities of tomorrow, today.
HawkEye 360 Secures $70 Million in Series B Financing
HERNDON, Va., August 6, 2019 (Newswire) HawkEye 360 Inc., the first commercial company to use formation flying satellites to create a new class of radio frequency (RF) data and data analytic products, today announced that it has secured $70 million in Series B financing. This financing capitalizes the company’s business plan to include buildout and launch of the HawkEye 360 commercial satellite constellation and development of the company’s line of RF analytic products by 2021. Round participants include new investors Airbus and Esri, existing investors Razor’s Edge Ventures, Allied Minds, and Shield Capital Partners, and additional undisclosed parties.
With this Series B financing, HawkEye 360 will focus on scaling its business to provide the fastest and most relevant RF analytics in the market to support rapidly growing customer demand. Today, HawkEye 360 is delivering products to customers using its first cluster of three formation flying satellites and fabricating a second satellite cluster for launch in early 2020. This financing supports the development and launch of four additional clusters, forming a fully operational constellation of 18 highly capable satellites with rapid global revisit.
“Receiving an investment of this size, especially for a pioneering space start-up, reaffirms the value investors place on the advanced capabilities of our satellites and the highly innovative RF data analytic products we are delivering to customers,” said John Serafini, Chief Executive Officer, HawkEye 360. “This financing not only capitalizes the development of our full constellation, but also provides exceptional access to European markets through our new investor and distribution partner, Airbus. We are honored to have such a phenomenal group of investors supporting our work, our team, and our vision for the future of space-based RF analytics.”
Since being founded in 2015, HawkEye 360 has now raised over $100 million in funding. HawkEye 360 launched its first satellite cluster in December 2018 and brought its first product, RFGeo, to market in April of this year. RFGeo identifies and locates the position of a broad range of RF emitters, such as X-band navigation radars, VHF push-to-talk radios, satellite terminals, and emergency beacons. The company’s pioneering geospatial data layer reveals patterns of activity and provides valuable insights for maritime, defense/intelligence, telecommunications, and crisis response applications.
“The capital markets are now determining the leaders of the emerging commercial space marketplace. This funding demonstrates the strength of HawkEye 360’s team, business plan, and ability to execute on commitments,” said Mark Spoto, Chairman of HawkEye 360’s Board of Directors and Managing Director at Razor’s Edge. “This company’s exceptional leadership and hardworking team of innovators have accomplished a series of major milestones. The Board and investor syndicate look forward to further successes as HawkEye 360 continues to expand services both in the U.S. marketplace and internationally.”
“We are joining the funding of HawkEye 360 at an important time in their growth,” said Evert Dudok, Head of Communications, Intelligence and Security & Member of the Executive Committee at Airbus Defence and Space. “Analytics from space is a game-changer for the industry and HawkEye 360's satellite data are highly complementary to Airbus’ global portfolio of optical and synthetic aperture radar satellites. Therefore, we believe our investment will support accelerating their plans and be of mutual business benefit to our companies in the future.”
PJT Partners LP served as exclusive financial advisor and placement agent to HawkEye 360 in connection with the Series B capital raise. Weil, Gotshal & Manges LLP acted as legal counsel for the company in connection with the transaction.
Phasor Achieves ISO 9001 Certification
July 25, 2019: Phasor, the leading developer of enterprise-grade electronically-steered antenna (ESA) systems for satellite-based mobile broadband applications has announced that it has achieved ISO 9001 Certification ahead of the commercial release of its products for the land mobile, maritime and aviation markets.
ISO 9001 is the internationally recognized standard for a quality management system (QMS). This enables companies to operate more effectively on several different levels, including the ability to focus on customer requirements and constantly finding ways in which to improve and become resilient and sustainable.
“The ISO 9001 certification is great news for Phasor,” said Mike Warren, Senior Vice President, Operations at Phasor. “It means that we are maturing as a company and moving closer to the commercialization and release of our products. The processes and procedures that we have implemented, and that have been audited and approved by BSI, will help us to manage our business better and to demonstrate to our customers that we can support them as they, and Phasor, grows.”
The overall process of ISO 9001 Certification has taken six months, and places Phasor on a firm footing as the company looks to roll-out its products in the coming months.
Phasor’s electronically steerable antenna (ESA) features a flat, ultra-low profile design, and is well suited to support traditional fixed satellite networks (FSS), High Throughput Satellites (HTS), Non-Geosynchronous (NGSO) satellite networks. The enterprise-grade antenna supports broadband connectivity on modes of transport on land, sea and in the air.
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Venture Capital Opportunities
Lynk (formerly, UbiquitiLink): Highlighted in this issue, Lynk connects ordinary cell phones directly to satellite, and will be the first to offer SMS messaging capabilities to cellular subscribers who stray outside the range of the cellular network. Two seed "Rounds" have already been completed, and $12 Million has been invested so far. CEO: Charles Miller.
Phasor Solutions (www.phasorsolutions.com): Phasor is about to release the first Electronically Steered Phased Array antenna. Target markets include maritime, aero and land markets. $39 Million has been invested to date, and the company are in the process of completing their "C Round." CEO: David Helfgott.
LeoLabs: This company is a pioneer and the only company dealing with the growing problem of space "junk," debris, left behind in low earth orbits. Using phased array radar installations, they will track over 200,000 pieces of debris, and mitigate the prospect of catastrophic and costly collisions. CEO: Dan Ceperley.
Satelles: Satelles provides a backup alternative to GPS for timing and location using the Iridium constellation. Installed in major stock exchanges around the world, their service provides a signal a thousand times more powerful than GPS. The company's technology is especially attractive in any timing or location application where loss of the GPS signal could cause major disruption of service. Backed by Family Offices and major corporate investors, the company has some very interesting potential. We'll review Satelles in or October issue.
CEO: Michael O'Connor.
As publishers of Satellite Mobility World, at times, we see unusual venture capital opportunities . As a service to our readers, each month we'll post a list of early stage companies that could be of interest to venture capital or angel investors. Here's our list for September 2019:
Under The Radar
The re-allocation of the 3.7 - 4.2 GHz band is moving toward resolution sometime this fall. For the last two years, the banter back and forth between the C-Band Alliance and a group consisting largely of some major cellular operators, corporations, Congressional law-makers on both sides of the aisle, and public interest groups has accelerated to a fever pitch. In thousands of pages directed in response to the FCCs requests for comment, proponents and opponents of the C-Band Alliance's Proposal to re-allocate spectrum for 5G have waged a mighty battle.
The battle is about the money, potentially billions of dollars, generated through the sale of the spectrum to 5G operators, and how to split it between the U.S. Treasury and four satellite operators.
The basis of the fight is an errant FCC licensing procedure which reserved, in perpetuity and for no cost, 500 MHz of contiguous mid-band spectrum almost exclusively for point-to-point satellite broadcast transmission.
Driven by Congress and the FCC who want to re-allocate a portion of that spectrum for 5G use, the CBA has proposed a plan in which they would manage the transition of existing broadcasters to adjacent spectrum and re-sell 200 MHz of the block, pocketing the proceeds. The advantages of this Proposal they claim would be a much more rapid re-purposing of the spectrum than is possible through the traditional auction process and preservation of existing C-Band-based broadcast services.
The CBA further backs their position with the argument that they built a lucrative content distribution business using the spectrum, thereby enhancing its value. Furthermore, Intelsat claims that they already have paid billions of dollars for additional spectrum in the secondary market, mainly through the acquisition of Pan Am Sat.
Lacking in Intelsat's argument is the fact that despite their purchase, they never secured ownership of the spectrum, only the right to use it for distribution of media content via point-to-point satellite transmission. The possibility that the FCC could re-purpose the spectrum at any time still existed and represented an ongoing business risk.
A Legal Challenge?
Opponents to the CBA Proposal argue that granting it would be a violation of the Communications Act of 1934 section 309(j)(6)(E), since it reserves for the FCC, rather than private parties, the right to manage the re-purposing of spectrum. Adding to their argument is the potential for anti-trust issues, since the CBA Coalition would be a single entity with the collective power to collude on pricing and determine the amount of spectrum that could be made available.
Nevertheless, whether the FCC has the authority to enact the CBA plan or not is a complex legal question. While the CBA claims that a precedent set in the lower courts , the "Chevron Deference," supports the FCCs right to enact their Proposal, their opponents have a different view.
Armed with substantial legal staffs, the Proposal's opponents would likely take their argument back to the courts and, if necessary, appeal - a protracted process that would nullify the Proposals claimed time-to-market advantage. Furthermore, another complication blocking the CBA proposal is the need to issue new terrestrial licenses.
Since the satellite operators only have point-to-point licenses, the FCC would have to award them new terrestrial licenses, presumably for zero cost, to allow them to re-sell the spectrum, putting them on the same footing as cellular operators who paid billions of dollars to own their spectrum. Whether this is fair or not is certainly open to question.
Recognizing that awarding such an enormous sum is a major impediment to the adoption of their Proposal, the CBA has offered to quell objections by making a "voluntary" contribution to the U.S. Treasury. Regardless, opponents are skeptical, and continue to favor a traditional FCC directed auction. At this point, it's worth reviewing how the Proposal and its claim to billions of dollars evolved.
Hidden behind the deluge of CBA PR and promotion is the potential for a huge financial benefit to Intelsat. With $14 billion in debt and its revenues in free fall, a substantial cash infusion could breathe new life into the company.
On the other hand, without a windfall cash infusion, it and the other operators might be forced to shift broadcast customers to adjacent spectrum or even fiber without any compensation at all, incurring billions of dollars in non-reimbursable expense - a financial crippling disaster for Intelsat.
To turn the potential crisis to advantage, Intelsat relied on a two-issue-argument: first, their claimed ability to make the spectrum available much more rapidly than the traditional auction process and second, the need to protect the rights of their broadcast customers.
Supported by $700 thousand PR and lobbying expense, they focused on the public service advantages of the CBA proposal, thereby overshadowing the politically distasteful prospect of awarding themselves and other private operators billions of dollars - instead of the auction proceeds going to the U.S. Treasury.
To put a $10 to $30 billion giveaway in perspective, consider that the FCCs Connect America Fund, a program designed to fund the expansion of rural broadband, will only disburse $2 Billion over the next ten years!
Given the controversial nature of the proposal, early on, the other three major satellite operators, SES, Telesat, and Eutelsat, were reluctant to join Intelsat, but ultimately saw no downside. With billions of dollars in potential gain and nothing to lose, they climbed aboard.
Needless to say, public service organizations and several large corporations vehemently oppose the CBA Proposal and continue to cite the illegality of allowing private business entities to re-purpose spectrum.
Given the huge potential legal and political risk inherent in approving the CBA Proposal and the questionable advantages it offers, we believe that the FCC ultimately will take the least risky approach, devising a plan to compensate the industry for re-locating existing broadcast customers to adjacent spectrum and conducting a traditional auction.
- Alan Gottlieb
5G - Battle for Billions: A Windfall for CBA or the U.S. Treasury?
"Since the satellite operators, only have point-to-point licenses, the FCC would have to award them new terrestrial licenses, presumably for zero cost, to allow them to resell the spectrum, putting them on the same footing as cellular operators who paid billions of dollars to own it. Whether this is fair or not is certainly open to question."
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Given the 54% drop in Speedcast's stock to $.69 A and the more recent bounce to $1.16, it’s apparent that a small number of institutional and hedge fund investors who own most of the stock overreacted.
While the news of a significant write-down and the departure of the CFO was unsettling, a stock drop of 54% is extreme except in the direst of circumstances. Speedcast is not a company going broke, and those selling their shares at fire-sale prices were mistaken.
To recap the numbers, net profit after tax was $14.7 million - down $21 million from first half 2018. The company reported cash outflows of $25.2 million, including costs relating to the acquisition of Globecomm. Net debt also rose to $625 million, an increase of $39 million vs. the first half of 2018, and the company did a write-down of $150 million.
On the positive side, Speedcast reported revenue growth of 17% to $357 million, and EBITDA also increased a respectable 3.0% to $62.2 million up from $60.4 million in the 1st half 2018. While organic revenue - revenue minus the Globecomm acquisition - was flat to slightly down, most of the drop is attributed to transient issues such as the phasing of the NBN contract.
Besides, the company has a significant number of long term contracts and reported a substantial amount of new business since its July 2nd forecast update. Speedcast also received a temporary increase in its debt/EBITDA ratio to 4.5 X from its lenders through December, significantly lowering the risk of breaching loan covenants. Even without pro forma cost optimization of $20 million, the debt to earnings the leverage will still be below 4.0 X, which is well below typical satellite companies.
Given the respectable numbers, the new business booked in 1st half and the eased loan covenants, why did the stock drop so much?
The only explanation for such a precipitous fall in the stock price is that a small number of institutional holders and hedge funds, who own the 74% of Speedcast stock, ran for the door. With only 11% of the float owned by retail investors, there wasn't a large enough public float to absorb such a massive sale.
That's why when Norges Bank sold 22% or 3.86 million shares of its holdings on August 27th, the stock dropped 33% in one session.
In comparison, institutions own only 12% of Telstra, and 87% is owned by the public, buffering it from this sort of extreme volatility. Lacking a diversification of holdings in a public market, a single institutional sale of Speedcast stock can result in a massive drop in the stock price. Had Telstra reported results similar to Speedcast, its stock might have only dropped 10% or less.
Again, looking at the four divisions of the company, it's hard to see much more than transient issues accounting for the decline in organic growth (Table I). For example, other than the phased revenue structure of the NBN contract, the contractions were negligible.
Furthermore, energy revenues have stabilized vs. a decline of 14% in 2018 and are expected to grow in the second half, and the fall in maritime was due to the end of a large contract with Inmarsat to provide Ku-Band services to vessels that have since migrated to GX.
In the future, new contracts announced in the 1st half of 2019 support a reasonable growth trend (Table II next page). As Speedcast continues to win new business, and its acquisition cycle is complete, there is a high probability that the company will advance into a growth cycle.
Given the tendency of Institutional investors and hedge funds to overreact in a thinly traded market, going private or moving to another exchange may be two of the best options for Speedcast. Given the depressed stock price, there should be considerable interest among the Private Equity community. AG
Speedcast: Value Overlooked as Share Price Collapsed
Table I: Gross vs. Organic Revenue % Change
Table II: New Contracts Announced in 1st half 2019
Lynk's Breakthrough Solution to Reach the Un-Served
A New Start-Up can connect mobile phones direct to satellite
If you think an ordinary cell phone can't connect to a satellite, Lynk (formerly UbiquitiLink), a start-up based in Falls Church, VA, is about to prove you wrong.
Unlike the mega LEOs that require billions of dollars of investment, Lynk will offer basic communication services to those beyond the reach of terrestrial cellular networks for a fraction of the cost and create a billion dollar venture as well - simply by connecting unmodified mobile phones to satellite.
To find out how all of this is possible and explore the potential for this unique venture, we sat down with CEO, Charles Miller, at their offices in Falls Church.
SMW: Based on our research, the maximum range for a cell phone is around 35 Km, line of sight, and this is also the limit for "handshake," the point where the phones can establish a link to the cell tower. So, how is it possible to extend the range to 300 miles above the earth?
Charles Miller: Previous assumptions regarding the range of a cell phone are simply wrong. In reality, cell phones can connect across much greater distances, but in terrestrial applications are limited by the curvature of the earth.
Because cell phones require "line of sight" connectivity, designers of the phones also limited "handshaking" capability to the maximum "line of sight" or a distance of 35 Km. To overcome this problem and achieve connectivity, we employ several strategies.
First, we lower the satellite and give it a narrower field of view than an Iridium or Globalstar satellite, and we use sub Gigahertz spectrum. This allows us sufficient power to close the link with the phone.
Next, to overcome the distance associated with the limitations of the "handshake" protocol, our satellites "spoof" the phone, telling it that the satellite is only twenty kilometers away. While the transmission takes longer across the greater distance, the phone assumes that the delay is associated with network congestion, and it continues to signal until the link is closed.
In the earliest days of starting the company, we consulted with numerous experts in RF cellular transmission, and they agreed that it was indeed possible to establish a functional communication link.
SMW: So, you have proved the technology works as projected?
Charles Miller: Yes. We tested the solution from a satellite in February, and our link margin was within 1 dB of the predicted value.
SMW: According to your website, you propose 24-36 satellites orbiting at 500 Km (300 Miles). Can you tell us more about these satellites?
Charles Miller: Our Satellites are microsats with a five-year design life. Each satellite weighs around 25 Kg and delivers 45 to 50 Watts on average, and 150 Watts of peak power. We'll launch 36 satellites into three planes in 51.6-degree inclined orbits thereby providing coverage 55 degrees north and south of the equator.
SMW: How many simultaneous users can a single satellite support?
Charles Miller: That depends on the power of the satellite and the spectrum and channels available. An LTE channel does around 180 Kbps and assuming 3 Kilobits per/message, around 60 messages per-second can be supported. If a satellite has only one channel, it can do a billion messages per/year.
SMW: What about the ground infrastructure? A critical question is whether you plan to inter-link your satellites. If inter-linked, you need only a couple of ground stations globally, and you can expand rapidly. If you don't Inter-link, your expansion would be dependent upon the speed at which you could install ground stations in each market. Can you elaborate on your connectivity plan and its costs?
Charles Miller: Initially, the satellites are not inter-linked and do messaging and IoT on a store-and-forward basis. Ultimately, however, we are planning for a constellation of inter-linked satellites of sufficient size to allow for real-time communication.
Of course, a fully inter-linked constellation will eliminate the need for large numbers of ground stations, but it will also increase the cost of the satellites. However, because we grow in stages, by the time we need to build satellites with inter-link capabilities, the viability of the business will be well established.
SMW: Other than ground infrastructure or inter-satellite links, are there any other additional costs associated with launching the network?
Charles Miller: In our business model, for existing cellular subscribers, there is no user terminal cost. So, the cost of customer acquisition is virtually zero.
SMW: Will you be able to do, voice, or broadband Internet as well as SMS and IoT?
Charles Miller: Initially, we plan to focus only on offering SMS capability since it is a much more efficient use of satellite capacity than voice. It has been an extremely profitable niche for cellular carriers even though IP-based messaging applications such as What's App and iMessage reduced the size of the SMS messaging market.
So, a solution that enables the cellular carriers to gain back some of their SMS business makes the adoption of our service extremely attractive. That's why we have had such an enthusiastic reception from numerous carriers around the world.
SMW: Wouldn't this solution be a good fit for IoT and even voice or broadband? Do you have plans to enter any of these markets?
Charles Miller: We see significant opportunity in IoT early on and ultimately expect to expand to other applications. For now, however, we're concentrating on SMS.
SMW: Has Lynk signed up any trial partners, and can you name any of them?
Charles Miller: We have thirty-three trial partners at the moment. Twenty-four of the thirty-three are mobile network operators representing 1.5 billion wireless subscribers, and three are public, Cellular One in the U.S., Movistar in Argentina and Vodaphone Hutchison in Australia.
SMW: In adopting your solution, what is the business risk for the carriers? Other than buying wholesale quantities of messages, do your cellular operator partners have any investment risk?
Charles Miller: Currently, we are not planning to solicit investment from our cellular network partners. We don't want financial ties to one cellular operator to prohibit us from doing business with other competing carriers. Our objective is to reach as many of the world's cellular subscribers as possible.
SMW: Can you give us an idea of why cellular operators would be eager to partner with Lynk. How will they benefit?
Charles Miller: Before IP based messaging applications such as What's App and iMessage, SMS was a huge business for the cellular carriers. Besides, cellular markets have become saturated, pricing pressures have increased, and margins have fallen, resulting in an increasingly challenging economic environment.
Lynk offers an opportunity to for mobile operators to reclaim some of the high margin messaging business that they lost. It's a no-risk venture with potentially significant long-term economic benefits.
SMW: Let's talk about the market. How big an opportunity is there for Lynk. Can you give us an idea?
Charles Miller: There are two potential markets for our service. The first is cellular subscribers who stray outside of their network's coverage, and the second is the un-served rural population that has not bought a cell phone because it has little or no connectivity.
In the first case, the available market is huge. Consider that there are around 5 billion cellular subscribers, and based on analysis of data from app-based connectivity firms, 15% or 750 million lack connectivity to the mobile network at any time.
Of course, note that we are not including the potential market for IoT services or those who have no connectivity at all. We are still in the process of gathering statistics on these markets, but we see the considerable potential.
While we agree in principle with your analysis, the latest statistics we have from GMSA indicate 75 trillion were sent globally, suggesting an even larger market. Also, we are not talking about specific prices per/message. Retail pricing will be driven by MNOs based on local market conditions.
It's important to remember that one of the primary barriers to reaching the "other 3 billion" has been the cost of a ground terminal. In our model, users don't need a $300 terminal or an expensive smartphone. A refurbished feature phone with SMS capabilities can be purchased in Africa for just a few dollars and deliver essential communication. Buying messages by the "sip" is more affordable than paying the high monthly fees required to support a high-speed broadband plan.
So, we're meeting the basic human need for communication for the masses with a solution that's affordable to most everyone.
This is not a "build it, and they will come" business. We plan to grow the business one level at a time proving our ability to generate revenue at each level.
That's why we are beginning with a limited number of satellites and a "store-and-forward" service and later advancing to real-time SMS and IoT, services with higher profitability potential. This makes Lynk an opportunity with little investment risk and enormous upside potential. So, you can see why investors are excited about the business.
SMW: Can you bring us up to date on how much you have raised so far?
Charles Miller: On July 17th, we just announced a successful "Seed 2 Round" in which we raised $5.2 million from Revolution's Rise of the Rest Seed Fund, bringing the total funding raised so far to $12 Million. As we continue to prove the viability of the business, we expect to advance rapidly into subsequent investment rounds and have a real-time SMS business in full operation by 2021-2022.
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"Lynk offers an opportunity for mobile operators to reclaim some of the high margin messaging business that they lost. It's a no-risk venture with potentially significant long-term economic benefits.""
Global messaging traffic is approximately 60 billion messages per day or 694,000 messages per/second (2016). If the 15% who are unconnected were always connected, the number could rise by an additional 104,100 messages per/second. Dividing this by 36 satellites, each satellite could see demand of around 2, 891 messages per second. Where this gets interesting is when we calculate how many messages per-second we need to generate a $1 billion business valuation from a $100 million investment.
A venture capital investment of $100 Million would need to generate a company valuation of $1 Billion in five years based on traditional venture capital metrics. That's $125 million in EBITDA at a valuation multiple of 8 X. At $.10 per/message that is 1.25 billion messages per year or 34 million messages per/year per/satellite or only 1.07 messages per/second. That means that out of a potential 2,891 messages per-second per-satellite, only 1.07 messages per/second are required to produce a company with a $1 Billion valuation. This market is so large that Lynk only needs to capture a tiny percentage of it.
Charles Miller is co-founder and CEO of Lynk. He is a serial space entrepreneur with 30 years’ experience in the space industry.
Charles has been the founder or co-founder of multiple private ventures and organizations. He is a national leader in the creation and development of public-private partnerships in commercial space to serve public needs.
One of Charles’ previous startups is NanoRacks, which has delivered more than 700 payloads to space and is the current world leader in nanosatellite launches.
Charles served as NASA’s Senior Advisor for Commercial Space from 2009-2012 where he advised NASA leadership on commercial public private partnerships.
At NASA, he managed USG teams that developed strategies for commercial development of reusable launch vehicles, on-orbit satellite servicing, orbital debris removal, microgravity applications, lunar development, space communications, and space solar power. Charles’ clients have included NASA, DARPA, the USAF, and many private commercial space firms.
The coming of LEOs will usher in a whole new set of challenges for teleport operators. Unlike GEO constellations, LEO constellations and, in particular, those without inter-satellite links, will require thousands of tracking dishes positioned around the globe.
As many of these LEOs will be small satellites with limited transmit power, large, expensive parabolic antennas will be required on the ground, each capable of a continuous tracking motion. Installation and maintenance of large numbers of these antennas will be challenging.
Electronically Steered Antennas (ESAs) while once considered a viable alternative to traditional dishes have several well-known issues in teleport antenna applications. Large ESAs require tens of thousands of expensive microchips, have excessive power requirements and generate a significant amount of heat, making them unsuitable for teleport applications.
Consequently, companies like Amazon, Swedish Space Corporation, Kongsberg, and Kratos, who are in the process of designing and building LEO and MEO teleports, haven't found an ideal antenna solution - at least not yet.
ThinKom, an innovative, California-based company, is about to introduce a promising solution based on their VICTS antenna. Already proven in aero applications, they have developed a way to apply the unique attributes of the antenna in a teleport. To find out more, we met with ThinKom CTO, William Milroy.
SMW: You claim that your VICTS solution has significant advantages over both conventional dish antennas and Electronically Steered Antennas. How is it different, and why is the VICTS superior?
William Milroy: While parabolic dish antennas offer relatively high aperture efficiency, deploying them in the large numbers required to track NGSO satellites is problematic.
Compared to our proposed VICTS teleport Installation, they require massive, concrete pads (or roof reinforcements) and finding skilled contractors with the appropriate equipment (cranes, earth-moving) to construct them can prove to be difficult and very expensive, especially in rural areas.
Then there is the issue of antenna efficiency and size. As a point of comparison, our 1.0 -meter diameter X-band “VICTS” Phased-Array (employing just one LNA and dissipating 15 Watts) provides the same broadside G/T performance as a 1.3 m parabolic dish (i.e. the VICTS array is MORE efficient than the parabolic).
A similarly performing conventional ESA Phased-Array is comprised of some 8,000 radiating elements (2,000 LNA’s,) requires 2.0 meter diameter active area, and dissipates an excessive amount of heat - in excess of 600 Watts
Advantages of our VICTS solution over ESAs become even more pronounced as we move to larger (2.5m to 5.4 m) dish-equivalent systems.
Beyond excessive power consumption and cost, conventional ESA phased arrays have limited scan angle capabilities and are typically unable to support the 5- or 10-degree minimum elevation angles required to operate efficiently with small imaging satellites.
Unlike an ESA, the VICTS array maintains very high aperture efficiency even out to very large scan angles, a unique feature related to the novelty of the “1-dimensional lattice of continuous stub radiators” employed in our antenna. Compare this to the conventional “2-dimensional lattice of patch or open-waveguide radiators” employed in ESA’s, and the advantage becomes obvious.
Furthermore, because our ThinKom phased array antenna employs a unique quasi-optical stub radiator-based approach to shifting RF phase to scan the beam, we don't require electronic phase shifters. This serves to dramatically reduce both the cost and power consumption versus a conventional ESA.
ThinKom’s solution has a several other significant advantages versus a conventional dish installation.
It's modular. Each 1.0 meter diameter sub-array constituent element is lightweight, transportable, freight elevator friendly and can be fitted into place by two people. - even on top of building.
The low weight (static and dynamic roof loading) means that no expensive reinforcements of the roof (and/or upper floors) are required (as is often the case with a large dish-based roof-mounted system).
SMW: Can a single array like the one you propose service multiple satellites?
Bill Milroy: Absolutely. Our array of VICTS antennas is fully re-configurable, on-the-fly, resulting in an extremely versatile and flexible multi-beam installation.
For example, the configuration of our 37-module array is software-defined, enabling us to simultaneously emulate both large and small parabolic dish equivalents (emulating two 5.4 m or three 4.5m or eight 2.5m independently-steerable parabolic antennas, or any combination in between) based demand.
Satellites are continuously tracked, horizon-to-horizon, reliably closing high-speed links (250 to 1000 Mbps) at elevation angles as low as 5 degrees.
SMW: Bill, how large is the market opportunity for your VICTS antenna solution?
William Milroy: When you consider the vast number of very small (1U to 3U size class) LEO satellites coming on line over the next few years and the number of 2.5m to 5.4 m equivalent dishes to service them, the opportunity is quite substantial. Many third-party companies are looking to provide teleport services to the new LEO satellite operators. They see real economic advantages based on the efficiencies gained by servicing multiple satellite constellations with the same teleport. As a result, you can expect to see a lot of teleports being built around the world to service Earth Observation, IoT and broadband LEO constellations.
SMW: Will you be focusing on all segments of the LEO market, or do you have a specific target market?
William Milroy: Initially, we are targeting services for the the small satellite Earth Observation (EO) imaging segment. These satellites gather an enormous amount of data, and they need to transmit (download) it to the ground as rapidly as possible.
Here, our ability to emulate a large antenna on-demand and link at a very low angle is a huge advantage. While we will initially market to the LEO segment, ultimately, we expect to provide the same antenna infrastructure (and advantages) for many of the new LEO and MEO teleports. In this new LEO environment, innovative teleport solutions are now a must, and we believe that the ThinKom solution enables many unique benefits that will be invaluable to teleport operators.
Teleports for LEOs: ThinKom's Innovative Antenna Solution
With Bill Milroy, ThinKom CTO...
LeoLabs: Conquering The Threat of Space Junk
With thousands of LEOs already in orbit and many more to come, avoidance of space debris is becoming a critical problem. Hundreds of thousands of tiny pieces of space junk, some as small as 2 cm, already orbit the earth at speeds approaching several miles per-second and even the smallest pieces of debris pack a deadly punch.
As the number of LEOs increases, collision avoidance is becoming a critical issue. To mitigate the threat, satellite operators and defense and regulatory agencies need a solution capable of tracking even the smallest objects.
A small California based start-up called LeoLabs leads the quest for a solution. The company is already able to track thousands of objects as small as 10 cm using phased array radar and will soon have the capability to track objects as small as 2 cm and send collision alerts. To find out more about LeoLabs and how they plan to provide this vital service, we met with Dan Ceperley, the company's CEO.
SMW: The problem of space junk is receiving more and more attention in the press. Has the severity of the problem been over-hyped? Can you help us better understand the risks associated with the increased amount of debris floating in LEO orbits?
Dan Ceperley: because of the business revolution going on in lower earth orbit, space junk really is a growing priority and concern.
The number of active satellites is increasing pretty quickly. Just a couple of years ago there were about 600 active satellites in LEO orbit. Now, the number is over a thousand, and projections are for the number to rise to over ten thousand or even fifteen thousand in the next 3-5 years. So, the amount of new satellite traffic is increasing dramatically.
Even with that increase, the amount of debris will always dwarf the number of satellites. A few more numbers for you: there are about thirteen thousand pieces of debris tracked in low earth orbit today. I specifically say “tracked” because that is the debris currently followed by US STRATCOM, The Combined Space Operations Center, and LeoLabs -10 cm sized objects and larger.
However, if you look at debris 2 cm in size, there are actually 250,000 pieces of debris flying around LEO orbit. That’s 20 X more than if you are just looking at the larger items.
In fact, 95% of the collision risk – the risk that a satellite can be shattered and turned into a cloud of debris - can be attributed to these additional 237,000 pieces of debris measuring between 2 and 10 cm in size. Pieces of debris as small as 2 cm are moving so fast that they can actually destroy a satellite and generate even more potentially destructive debris. We view our type of space traffic monitoring as an absolute necessity.
We view our mission as tracking those 250,000 items to protect the satellites owned by our clients. If you are producing a good set of alerts, the situation can be managed.
SMW: Tell us about the origin of LeoLabs. Can you give us an overview of the history and the status of the company today?
Dan Ceperley: We got our start as a company in 2016. So, we have been in business a little more than three years.
In June of 2016, we spun out of a research lab, SRI International. Three of the four co-founders had been working at SRI for several years.
I had been at SRI for eight years as their program director for satellite and space debris tracking and had done many government-funded projects focused on how to track all of these new satellites.
One of our other co-founders, our CTO, Mike Nicolls, spent eight years at SRI as well, and he was the chief scientist at a radar facility. He has been intimately involved with radar processing and maintaining and operating a radar facility. The work in which he was engaged in - studying the Aurora Borealis - generated a great deal of satellite debris tracking data as a bi-product.
Our third co-founder, John Buonocore, had been at SRI for 32 years building radar systems and CubeSat payloads, and he is now our principal RF hardware engineer.
Our fourth co-founder is Edward Lu, a NASA astronaut who flew on two Shuttle and one Soyuz mission. He has been in space three times and lived the space debris problem. That is how we got into the satellite tracking business.
SMW: 3. You use phased array radar for tracking. Can you explain how the technology works?
Dan Ceperley: LeoLabs is really based on two major technical areas. One is the phased array radar network. The other is the on-line software system where the data is archived, analyzed, and ultimately delivered to customers.
We use ground-based radar, and we are building out a network of six radars around the world. We’re using radar because it operates in daylight, through clouds and at night.
With those facilities, we can track the orbital objects in LEO, and we can also get many measurements per-day. With six radar installations, we will have about 12 opportunities per-day to check on a satellite or a piece of debris. This means we can do tracking around the clock.
The phased array approach is quite important as well because it is fully electronically steered. There are no moving parts. Unlike a large mechanical dishes that take time to re-position, we can focus on where we need to nearly instantaneously.
With a simple software command, for example, we can steer the antenna to the east and a millisecond later, focus on a satellite to the west. That’s really important today because each radar is tracking about 1,000 objects per-hour. So, we are constantly going back and forth between the new satellites and debris that are coming up over the horizon.
SMW: How do you convert the positional and orbital data derived from the radar into actionable information? I understand you track junk and satellites as well and can predict collisions. Can you give us some examples of actual situations in which you identified collision risks, provided the information to a satellite operator, and a collision was avoided?
Dan Ceperley: This really has become a data/science. Our mission is to collect this enormous amount of data and use it to inform satellite operators, defense entities, regulators, and the insurance industry. So, the radar solves the collection side of the problem, but then we have to do something with the data to make it useful.
To solve the second part of the problem, we put the data in the Cloud, archive it, spin up large amounts of computer processing power and using proprietary software, we turn it into actionable data.
A lot of work goes into the software to assure that the data is easily accessible and accessible very quickly. Any sort of calculations we can do, we do ahead of time. So, later on, when they are needed, they can be accessed immediately.
While we are often known as a radar company, the majority of our employees are software engineers. It’s because the value is in the data, how you handle it, analyze it and process it. The future is really in the analytic – all the different alerts that you can generate. Building our analytical capabilities has been a lot of work for our software engineers, and they have done a fabulous job.
You mentioned collision alerts. These are very important because they can predict collisions days in advance. However, there are actually other alerts like watching when satellites maneuver or when a satellite has tumbled or finding newly launched satellites and tracking them well so their operators can bring them into service quickly. There are many ways to slice the data, and collision alerts are just one of many.
SMW: Once a client is notified of collision risk, I assume that they use thrusters to move the satellite to a different position. Do all satellites, including CubeSats, have the ability to shift their positions?
Dan Ceperley: For collision prevention, the best practice in use today is the satellite operator would like to receive a collision alert about 5-7 days before the time of closest approach, and then they want updates, sometimes multiple times per/day until a couple of days prior. It's necessary to detect risk at least 100 orbits before the piece of debris might become close to a satellite to meet this requirement.
If there is still a risk of collision 48 hours before the projected time of impact, the satellite operator can program an evasive maneuver and nudge the satellite out of the way.
However, some CubeSats don’t have propulsion capabilities. If these satellites are in low enough orbit, there is a technique called differential drag that can be used to move a satellite around even if it doesn’t have propulsion.
The method relies on the solar panels. At lower orbits, if the panels are oriented perpendicular to the direction of motion, impact with the upper atmosphere can be used to slow down the satellite.
SMW: With the addition of your New Zealand based radar installation you will have three sites. How does this combination of sites enhance your ability to track objects?
Dan Ceperley: We now have two radar sites in the U.S. – Alaska and Midland, Texas and are adding a third site in New Zealand. The New Zealand site is critically important since it is the first tracking radar site in the southern hemisphere. All of the other tracking radar sites are in the northern hemisphere and for that reason, coverage of the southern hemisphere has been less accurate. Consequently, our New Zealand site will constitute a big step forward in improving tracking accuracy.
After New Zealand, we want a site close to the equator and others a little further north and a little further south. With six sites, we will be able to measure orbits in many different places around the world and to check on satellites and debris many times per day.
SMW: How large are these radar sites and how much time does it take to construct them?
Dan Ceperley: Unlike such installations in the past, our radar sites are very quickly deployable. For example, in Midland, we built the radar from breaking ground to delivering data in only six months. That’s the model we are taking forward with our other sites as well. These are pretty large sites. The radar in Midland is about 50 feet wide and 150 feet long and just over 20 feet tall.
SMW: Do you provide both alerts as well as provide raw data to customers or third parties for processing and analysis?
Dan Ceperley: It’s actually even more than that. We view ourselves as a “software as a service” business, and we have a range of different products.
For example, we provide collision alerts, maneuver alerts, tumbling alerts, and launch alerts - mainly, high-level analytics products.
We analyze the data to look for important or risky situations, and when necessary, we send alerts. We also do orbit solutions which tell the client the location of their satellite over the coming hours and days. We can determine the satellite’s position and speed when it passes over the radar and its size.
We have an API that facilitates the construction of customized data requests and data transfer in a machine to machine way - a critically important capability. That’s how most of our data is delivered. With it, data can be transferred directly from our computer to a customer’s computer eliminating the need for human intervention. Given the massive amount of data we collect, M to M transfer is essential.
We also provide dashboards on-line. These are human-readable versions of our services that show the data as maps and tables and charts, and they are all dynamically generated.
Someone monitoring a satellite can see the latest version of our data, when it was collected and when more data will become available. Because we are a private business and not a government entity, customers expect us to show up with an indication of service level.
They need to know when the current data was collected, when the information will be updated and when they are going to get new information. That information builds trust in our services.
SMW: What are the primary target markets for your service?
Dan Ceperley: We try to build services that are fundamental across several industries. We like to roll out services that work for satellite operators, science and regulatory agencies, and the insurance industry. Ninety-five per-cent of our work cuts across all of these industries and five- per-cent is custom.
SMW: How does the company generate revenue? What is the business model?
Dan Ceperley: We fundamentally operate on a subscription basis. Satellite operators and other customers subscribe to our services, and we send them a feed of all the information and alerts about their satellites.
However, to do that mission well, we constantly have to constantly monitor everything in space. We’re continually running the radars to keep constant tracks of all the satellites and the debris in orbit regardless of who is paying for specific data sets.
Basically, we're building a real-time picture of what’s going on in space. In the future, when we launch the collision prevention service, I am confident that many satellite operators will subscribe very quickly. We also expect the business to grow quite rapidly due to the huge projected increases in LEO satellite traffic and space debris in orbit, the amount of data we collect, and the new products we plan to offer.
Given the gravity of the debris problem, and its potential impact on the health of LEO constellations, we see a significant business opportunity.
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"While we are often known as a radar company, the majority of our employees are software engineers. It’s because the value is in the data, how you handle it, analyze it and process it. The future is really in the analytic ..."
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About Dan Ceperley:
Dan is CEO and founder of LeoLabs
He earned a PhD in Electrical Engineering and Computer Science from UC Berkeley with a thesis on computer simulation of advanced optical systems. As Program Director at SRI International, he led a team of 20+ engineers and scientists and developed SRI’s commercial satellite tracking business.
There are many mobility related satellite industry events and unless you have an unlimited budget, here are the "must attends" (i n blue) and others that may be of interest.
******World Satellite Business Week: 9-14 September Paris, France: For those seeking the opportunity to meet and network with top executives of the satellite industry, this is the premier conference of the year. It featuring extensive analysis of the satellite industry, It's Smart Plane, Satellite Finance and Earth Observation segments offer valuable insights difficult to find elseware.
***Monaco Yacht Show: 25-28 September: Monaco: For those interested in the use of VSAT on yachts, this is a key event.
***IBC-Amsterdam: 12 - 16 September: A very popular show with focus on Broadcast -attended by most major satellite equipment vendors and service providers.
***Satellite Innovation: 8-10th October 2019: Silicon Valley: An Annual Conference focusing on satellite innovative satellite technologies.
NBAA- Orlando : 22-24-Oct 2019: This show offers providers an opportunity to access the business jet market. Most major connectivity providers exhibit.
*****Satellite 2020: 9-12 March 2020: Washington D.C.: The Industry's most important satellite exhibition and conference - a must attend.
*****SeaTrade Cruise Global, Miami: 21-23 April: The Cruise Industry is a huge user of VSAT services. making this show an important venue. It should not be missed - an important event for satellite service suppliers.
****Posidonia: 1-5 June Athens, Greece: Another important show maritime VSAT, especially for those targeting the tanker and container segment.
****Global Connected Aircraft, June 10-13 Denver: A popular conference address in commercial aircraft connectivity.
*****Small Satellite Conference, Logan, Utah: August 3-8. Unquestionably the best small satellite conference available. With over 3,000 attendees, this conference is enormously popular.
*** SMM Hamburg, Germany' 8-11 September 2020: A must attend for those interested in VSAT use in the cargo segments.
Upcoming and Recommended Satellite Mobility Events
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