SpaceX adds another 30,000 satellites to already ambitious plans

Elon Musk’s grand plan to dominate the skies just became a lot grander as another application emerges, this time to add 30,000 satellites to the SpaceX constellation.

Submitted to the ITU by the FCC on behalf of SpaceX, the paperwork would add scope for an additional 30,000 satellites on top of the 12,000 the company already has permission to launch. According to Space News, the FCC submitted 20 filings, each for 1,500 satellites at different low-earth orbits.

In recent years, satellite connectivity has proven to be an unpopular means with many telcos in developed nations turning noses up at the idea. There was an attitude present in the industry that satellites were for poorer nations who did not control the same budgets, though the industry does seem to be coming around.

At Mobile World Congress this year, several companies were touting their assets to the increasingly cash-strapped telcos. With the cost of investment in access infrastructure soaring, satellite is becoming a more popular feature of the connectivity patchwork to deliver services to those in isolated and inaccessible regions.

It does seem the ambitious Musk is backing the continuation of this trend. Apparently 12,000 satellites isn’t anywhere near enough.

Interestingly enough, reports have also emerged SpaceX is in discussions with the US army for its Starlink broadband network. High-speed, low-latency communications are a no-brainer for the army, especially when you consider the global presence of the US army, though it does appear the team is in discussion for the Starship part of the business also.

As it stands, SpaceX’s Starship is currently working with NASA as a logistics partner after the space agency retired its space shuttle programme. However, it is also suggested the army is interesting in Starship as a means to quickly move personal around the globe.

The low-orbit satellite segment is certainly starting to heat-up, and this revelation should add more fuel to the fire. Alongside SpaceX, the likes of OneWeb, Space Norway, Telesat, and Amazon are also fighting for real-estate amongst the stars. Theoretically, the low-orbit satellites should offer greater levels of performance than traditional satellites, gigabit speeds and latency less than 25 ms, though pricing has not been unveiled by the providers.

It is promising to see aggressive progress to enhance the rich tapestry of connectivity, but there are still significant hurdles to overcome. There are currently c.5,000 satellites circling the earth, of which only around 2,000 are in operation. With some very wealthy companies launching tens of thousands of satellites into the skies, each will have to prove their plans to minimize debris and prevent collisions.

As it stands, SpaceX has 60 satellites in the skies, which could be as many as 1,000 in the very near future. Considering there are only 2,000 currently in operation, the skies could become very busy in the very near future.

Huawei gets Yandex and Booking.com for upcoming mapping service – report

Huawei aims to launch its own business-facing mapping service in October, with Russian internet service company Yandex and Booking.com already embracing the initiative, reports China’s media.

Days after it unveiled its own mobile operating system Harmony OS, Huawei is reportedly preparing to launch its own mapping service, called Map Kit, in October, according to a report by China Daily, one of the key official media outlets in China. The newspaper cited “a source familiar with the matter” (although other sections of the report indicate that source may actually have been the president of cloud services at Huawei’s consumer business group) that Huawei has already recruited as software partners in Yandex, the Russian internet heavyweight sometimes dubbed “Russia’s Google”, and Booking Holdings, the American travel aggregator and parent company of Booking.com, Kayak.com, Cheapflights, etc.

The is a logical move by Huawei when it aims to gain more independence from Google, to prepare for the rainy days if the axe of American ban falls heavy again (there are plenty of signs that it may if the trade war is not solved soon). However not enough details have been disclosed for the observers to evaluate the viability of the initiative.

As its name suggests, the Map Kit is not meant for end users but rather an SDK for application developers to build location-based services on top. Huawei plans to make the software suite available in 40 languages and roll it out in 150 countries. According to the report, the Map Kit will support apps to offer real-time traffic conditions and sophisticated navigation systems as well as support augmented-reality mapping. The report specifically said that the software will be able to recognize a car changing lanes, suggesting extremely high precision of its location data.

The report does not spell out the sources of the location data though. China has launched its own satellite navigation system BeiDou to rival the American owned GPS, Russia’s GLONASS, and the European Union’s Galileo. To couple with the fact that Google services including Google Maps are inaccessible in China, it is safe to bet that in China, Huawei’s Map Kit will gather the location data either directly from the state’s navigation system or through third party, such as AutoNavi (an Alibaba subsidiary).

The partnership with Yandex may indicate that the Russian internet giant will provide location data that is not attainable yet from China’s BeiDou, which aims to provide global coverage by 2020. The line in the China Daily report that “Huawei Map Kit will be connected to local mapping services” suggests that Huawei may also use location data from existing navigation and mapping services in countries it intends to offer the Kit to. This is a common practice in mapping data gathering. Because China’s law bans unofficial navigation and location data gathering, both Google Maps and Apple Maps buy location data from AutoNavi.

Another key missing point in the report is the operating system the SDK will run on. It is highly unlikely that it will operate on Harmony OS, which will not be ready by the targeted time frame of the intended launch of Map Kit: Harmony OS was only introduced on PowerPoint slides at the developer conference when it was unveiled, with no hardware nor user manuals for the developers to try their hands on. Additionally, Harmony OS is meant primarily as an operating system for IoT businesses.

On the other hand, if the Map Kit was to run in the Android environment, it would defeat the very purpose of Huawei becoming more independent of Google.

ZTE gets ahead of the game with cybersecurity centre launch

With Huawei facing scrutiny over its alleged ties to the Chinese Government, it will only be a matter of time before ZTE faces the same questions considering its own, complex ownership structure.

Taking a page from the Huawei playbook, ZTE has officially opened its European Cybersecurity Centre in Brussels, Belgium. The lab will open its doors to current and potential customers, as well as national regulators, to access the external security verification of ZTE’s products, services and processes.

As with the Huawei Cybersecurity Centre, this is a transparency mission to improve the perception of the vendor at a time where Chinese firms are facing increasing scrutiny in the international arena.

“ZTE’s original intention of the Cybersecurity Lab Europe is to provide global customers, regulators and other stakeholders with great transparency by means of verification and communication,” said Zhong Hong, ZTE’s Chief Security Officer.

“The security for the ICT industry cannot be guarded by one sole vendor, or by one sole telecoms operator. ZTE is willing to play an important role in contributing to the industry’s security along with its customers and all other stakeholders.”

Although ZTE has largely managed to avoid criticism from the US in recent months, which has predominately been centred around collusion with the Chinese Government, it is surely only a matter of time. The complex ownership structure of ZTE has direct ties back to the Government, much more noticeable than the tenuous link at Huawei which has been presented countless times.

ZTE is owned by Xi’an Microelectronics (34%), Aerospace Guangyu (14.5%), Zhongxing WXT (49%) and Guoxing Ruike (2.5%). Xi’an Microelectronics a subsidiary of China Academy of Aerospace Electronics Technology, while Aerospace Guangyu is a subsidiary of CASIC Shenzhen Group; both groups are state-owned enterprise and responsible for nominating 5 of the 9 Directors of ZTE.

ZTE clearly has more of a direct link to the Chinese Government, though it has seemingly avoided the spotlight thus far as it does not have the same market share in the network infrastructure market as Huawei.

According to the Dell’Oro Group, ZTE featured in the top seven network infrastructure equipment vendors worldwide, alongside Huawei, Nokia, Ericsson, Cisco, Ciena and Samsung, with the group accounting for roughly 80% of global market share. Huawei is leading the rankings by some margin, though over the course of 2018, ZTE’s share dropped by two percentage points to 8% global market share.

That said, it does have some significant customers in Europe. Wind Tre in Italy is supposedly one of the biggest customers of the firm, perhaps explaining its 5G research centre being located in L’Aquila, about 100km north of Rome. Elsewhere, ZTE has signed MOUs with Hutchison Drei Austria, Portugal Telecom and Telefonica in recent years. ZTE might not attract the headlines Huawei does, but it has an established presence in 15 countries throughout Europe.

Perhaps the saving grace for ZTE in recent months has been it operates in markets the US isn’t that bothered about. The Trump administration seems to be very selective when it levels its national security concerns at allies, focusing primarily on the more prosperous economies.

ZTE has already been the focal point of a number of different scandals including bribery and violation of US trade sanctions, and it seems it will only be a matter of time before government collusion is thrown on the table again, especially if it starts making progress in the market share league. It seems this cybersecurity centre focused on transparency is an effort to get ahead of the game.

Amazon takes one small step for satellite connectivity

Amazon has submitted its application to the FCC to deliver home broadband services to rural communities in the US through its Kuiper Systems satellite programme.

In a filing with the FCC, Kuiper Systems, a wholly-owned subsidiary of Amazon.com, plans to deliver high-speed, low-latency broadband services to consumers, businesses, and other customers worldwide through a constellation of 3,236 satellites in 98 orbital planes at altitudes of 590 km, 610 km, and 630 km, us Ka-band radio frequencies.

Aside from providing broadband solutions to rural and hard-to-reach communities, the plan is also to enable MNOs to expand wireless services to unserved and underserved mobile customers and provide high-throughput mobile broadband connectivity services for aircraft, maritime vessels, and land vehicles.

While Amazon has plugged its bank account to entice the FCC, it is also leaning on its existing operations as a means to support the new venture. It has stated it has the ‘global terrestrial networking and compute infrastructure required for the Kuiper System’, as well as the ‘customer operations capabilities’ acquired through its various businesses from eCommerce through to AWS cloud computing.

It’s a comprehensive filing from Amazon, and we suspect it peak some interest at the offices of the FCC.

“The Kuiper System will deliver satellite broadband communications services to tens of millions of unserved and underserved consumers and businesses in the United States and around the globe,” the application states.

“According to the FCC’s 2019 Broadband Deployment Report, 21.3 million Americans lack access to fixed terrestrial broadband with benchmark download and upload speeds of 25 Mbps/3 Mbps, and more than 33 million Americans do not have access to mobile LTE broadband speeds of 10 Mbps/3 Mbps. Amazon will help close this digital divide by offering fixed broadband communications services to rural and hard-to-reach areas.”

Once the ugly duckling of the communications family, the satellite segment has been given a new lease of life in recent months. Amazon and Tesla are two companies which are attracting the lion’s share of headlines, but there are several firms, such as OneWeb, Telesat and LeoSat Technologies, with grand plans to launch constellations over the next few years to bridge the connectivity gap.

And it isn’t just satellites which might be filling the skies over the next few years. Google’s Loon is another business attempting to break the mould when it comes to connectivity. Last week, Google finally received the relevant permissions to start testing its balloons to deliver connectivity, with commercial services set to launch over the coming months.

Even internally the telco industry is seeking to disrupt the status quo. Fixed wireless access for broadband solutions are becoming increasingly popular as a means to deliver connectivity over ‘the last mile’. AT&T and Verizon are charging ahead in the US, with companies like Starry challenging, while numerous telcos have announced their own ambitions in Europe, including Vodafone and Three in the UK.

Although there are still ambitions to deliver the full-fibre dream, the commercial realities seem to be getting in the way. It is incredibly expensive to deliver home broadband through wires, especially when you go to regions such as the US, where the geography is so diverse and vast, or Africa, where ARPU remains a problem in justifying ROI. The digital divide is present everywhere, to varying extremes, and it seems the traditional approach to home broadband is not going to be able to meet demands.

That said, some territories are even out of the reach of Bezos. In the application, Amazon has requested a waiver from delivering connectivity to Alaska, as it would be too far north for the constellation. It perhaps undermines the validation Amazon has put forward, delivering connectivity where it is too difficult for others, though whether this has any material impact remains to be seen.

Although progress is clearly being made here, what is absent from the application are any details on the design of the satellites or timetables for launches. Should permission be granted, we suspect Amazon would move forward very quickly however, Bezos is a space-buff after all.

Interestingly enough, Bezos’ side venture Blue Origin could be in the running to launch the satellites, though Amazon would have to be very careful here. As a publicly-traded company, this could be viewed as a conflict of interest.

The OTTs have constantly been a threat to the delivery of connectivity, a segment owned by the telcos to date, and have faced numerous complications is staging a coup (see Google Fiber). Using satellites might just be a way to carve a niche. It will be an expensive job, but these are companies which have the funds, the desire and the culture to make such a dream a reality.

OTTs Telcos
Cash Cash rich organizations, with incredibly profitable core business models to fuel expansion Incredibly constrained thanks to disruptions to profit-machines such as voice and SMS. Already committed to expensive business of traditional connectivity leaving limited funds for cash-intensive R&D outside bread and butter operations
Desire Constantly searching for new ideas to fuel growth on the spreadsheets. Expectations are high with shareholders and core models will slow down at some point. Do not have the same limitations placed on them (legacy business models and technologies) as the telcos Seem to be fighting too many short-term fires to cast an eye on the horizon. 5G and fibre are taking up so much attention, there seems to be little desire to disrupt themselves. Focusing on protecting what they have
Culture Cultivated a culture of exploration and fail-fast. Willing to fuel ideas without immediate commercial gains if there is potential for profits. More of a big-picture mentality to business Traditional businesses, with traditional leadership and traditional employees. Rarely search beyond the norm for profitability

O2 looks to the stars to fuel CAV connectivity

O2 has launched a new project with the European Space Agency to address the notable strain which will be placed on networks with the introduction of connected and autonomous vehicles (CAVs).

While there has been a nod to the potential pitfalls of providing connectivity for CAVs, it hasn’t received a significant amount of attention to date. O2 claims it has done research on the segment, and wide-scale adoption of CAVs could generate up to 4 TB of data an hour. This would certainly place a strain on urban networks, but the usecases don’t end at the city limits; the strain placed on rural networks might be too much of a burden.

Code-named ‘Project Darwin’, O2 and the European Space Agency will work with Spanish satellite operator Hispasat, as well as various universities and vertical start-ups, to create connectivity solutions combining 5G and satellite communications.

“Project Darwin is an important piece of the connected and autonomous vehicle puzzle,” said Derek McManus of O2. “The research taking place at Harwell during the next four years will be vital in the creation of new transport ecosystems for the UK public and the companies that will offer these services.”

“Autonomous vehicles need robust, high-speed mobile data connections to operate effectively,” said Catherine Mealing-Jones, Director of Growth at the UK Space Agency. “Building the technology to link them to telecoms satellites will allow you to take your car wherever you want to go, and not just to areas with a strong mobile signal.”

This is one of the questions which the telco seems very keen to avoid at the moment; what is being done to ensure 5G is not an ecosystem for the privileged? Or at least not for a longer period of time than is necessary.

Having just driven back to London from the South-west, your correspondent can confirm the patchy nature of 4G. Telcos and government will tell you this is an area which is constantly improving, but it isn’t although we were taking countryside backroads. The M4 is one of the most important and busiest arteries of the UK. Maybe we are expecting too much, but the number of times devices dropped off 4G coverage is not encouraging for these future usecases which depend on constant and reliable connectivity.

These are questions which are perhaps being addressed elsewhere but not directly in the UK. How quickly is the network growing? Are network densification strategies advancing as quickly as other nations who are driving towards the 5G promise?

Business Secretary Greg Clark has stated the UK has ambitions to lead in the CAVs segment, but to do this the right connectivity conditions need to be in place. It does not appear the network has been rolled out far or densified enough to meet the demands of this emerging segment, whenever it appears.

Satellite is often seen as the ugly duckling in the connectivity mix. It is often considered as an option for the developing nations, and largely overlooked for those who can afford to build connectivity closer to the ground. However, digital divides exist all around the world, albeit nowhere near as extreme or consequential as regions such as Africa. If there are ‘not spot’s, or even areas of weak/patchy signal, some 5G usecases are undermined. CAVs is one of them.

Attitudes towards satellite connectivity have been shifting over the last 12 months, and it does appear to be increasingly becoming an important ingredient in the connectivity recipe. The UK network is evolving and improving, but it is far from perfect; satellites look an asset which are becoming more of a necessity than back-up.

Musk takes first step towards SpaceX broadband vision

SpaceX has kicked off its satellite broadband mission with the launch of 60 assets, all of which are now online.

The Elon Musk business has a vision to create an alternative offering for the broadband industry, relying on a monstrous number of assets floating at an operational altitude of 550km above the earth. The ‘Starlink Network’ is only just beginning, with Musk suggesting it would take another six missions to begin offering sparse services, while mediocre connectivity will only be delivered after a further twelve launches.

Even before Musk’s internet vision can begin to become reality, SpaceX will have to launch a further 720 satellites into orbit.

One of the big questions which remains is how congested the skies will get before too long. As it currently stands, there are roughly 2,000 satellites orbiting the earth, a number which causes some unease already. Considering Musk plans to have 12,000 in operation to deliver a broadband solution to the industry, the skies are going to be getting very crowded.

Started in 2002, SpaceX now employs more than 6,000 people with three launch sites in California, Texas and Florida. The firm is now one of several which has the ambition of creating mega-constellations to deliver connectivity, Amazon is another with its Project Kuiper and British start-up OneWeb has also launched its own satellites.

The mission started at 22.30 local time at Cape Canaveral Air Force Station in Florida. Musk announced that approximately one hour and two minutes after lift-off, the Starlink satellites were deployed at an altitude of 440km, with on-board propulsion systems taking the assets to operational altitude of 550km.

While this does sounds like a very ambitious venture for Musk, this is only a means to an end. The proceeds from delivering broadband connectivity will be used to fuel future, grander missions, such as Musk’s desire to colonise the Moon and Mars…

US official overseeing country’s frequency strategy has resigned

David Redl, heading National Telecommunications and Information Administration (NTIA), responsible for the US’ strategy on frequency and 5G, abruptly resigned from his post.

The circumstances of his resignation were not disclosed, but the Wall Street Journal reported that Redl has had conflicts with other political appointees at the current administration, including officials at the FCC. Redl, together with the Commerce Secretary, was tasked by President Trump to develop the country’s “National Spectrum Strategy” last October.

A few days before his resignation, Redl used his speech at Satellite Industry Association’s annual dinner to voice his concerns. “We don’t have to choose between making more spectrum available for the private sector and sustaining our critical government systems. We also don’t have to choose between terrestrial 5G and satellite services,” Redl said on that occasion. “To start with, satellite will play an important role in 5G connectivity, but perhaps more to the point these uses are not mutually exclusive; it’s just going to take hard work for them to continue to coexist in a more contentious spectrum environment.”

Meanwhile, FCC would not wait to have the “comprehensive, balanced and forward-looking” spectrum strategy in place before it pressed ahead with the auction of the mmWave frequencies, including the 24GHz and 37GHz bands that are also being coveted by the satellite industry. “I can’t recall ever in the past watching two different arms of an administration get into this kind of public disagreements,” FCC Commissioner Jessica Rosenworcel commented.

In other cases, Redl’s opinions often carried a lot of weight in FCC’s decision making. Before the decision was taken to deny China Mobile the operation licence, Redl’s earlier note had already set the tone. Ajit Pai, the FCC Chairman, in his statement called Redl “a longtime colleague, who served with distinction during his 18 months at NTIA.  He was a vocal advocate within the Department of Commerce for repurposing federal spectrum for commercial use and fostering the private sector’s lead in 5G deployment.  I thank David for his service and wish him all the best in his future endeavors.”

It may or may not be related, but Redl’s resignation also coincided with fresh pressure from the US on the UK to join the alliance to ban Huawei from the country’s 5G networks. The DC-based news outlet The Hill reported that Diane Rinaldo, Redl’s former deputy, would be taking over as acting administrator.

Amazon gets into the satellite connectivity game

All the cool kids have low-orbit nanosatellites these days and Amazon is not about to miss out on the latest connectivity fad.

The news comes courtesy of some pro sniffing about from Geek Wire, which spotted a bunch of new filings made with the International Telecommunications Union last month via the FCC by a company called Kuiper Systems. The dogged hack followed his hunch and got in touch with Amazon to see if it was involved and got the following response.

“Project Kuiper is a new initiative to launch a constellation of low Earth orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world. This is a long-term project that envisions serving tens of millions of people who lack basic access to broadband internet. We look forward to partnering on this initiative with companies that share this common vision.”

It seems to be very early days for this project, but if Amazon’s behind it you can be sure it will be well funded. Furthermore Amazon founder Jeff Bezos has always had a thing for space and has his very own rocket company called Blue Origin. It’s too early to say whether Bezos will get Blue origin to launch the Amazon satellites but you’d presumably get short odds on it.

As we recently found out from talking to nanosatellite startup UbiquitiLink, low-orbit satellites are handy because they don’t suffer from the kind of latency issues regular geostationary ones do. However you need a lot more of them to achieve the same area of coverage, hence the whole nanosatellite thing.

Loads of other companies seem to be thinking this is a promising business to get into, mainly to provide connectivity to remote areas but, if you’ll excuse the pun, the sky’s the limit. It’s not immediately obvious what the return on investment is on lobbing a bunch of satellites into space to help people who live in the middle of nowhere get online, but they’ve presumably given it some thought and reckon the sums add up.

$3.4 billion Inmarsat acquisition hype turns out to be true

British satellite communications company Inmarsat has been the centre of numerous acquisition stories in recent years, and this one is actually progressing.

Last week, the Inmarsat board released a statement confirming it was in preliminary discussions regarding a takeover, and today it has confirmed an offer is on the table. Not only will this put $3.4 billion into the pockets of the shareholders, it will also take the firm back into private equity, protecting it from the roller-coaster ride which has been the satellite segment over the last few years.

“As experienced and long-term investors in telecommunications, the Consortium values and admires Inmarsat for its proven expertise in maritime, aviation, defence and broadband satellite communications, alongside its strong market positions and potential for growth,” a statement from the consortium reads.

“Our planned ownership will enable this innovative British company to fulfil its ambitions to become a global leader in next-generation satellite communications, including the fast-growing market for commercial aviation in-flight connectivity.”

Another important factor from the statement is that the Inmarsat headquarters will remain in London. This might have been a bit of an issue for any protectionist politicians which would have viewed Inmarsat as strategic national asset, but the consortium seems to be getting ahead of the game. Should the firm gain regulatory approval, the deal is expected to be completed in Q4 this year.

The consortium, named Triton Bidco, believes there is much growth to be realised in the satellite segment, though a “strategic management and a long investment horizon” is required. In short, if you want to see the profits, shareholder pressures need to be removed from the equation. The firms traditional markets, maritime and government, are becoming increasingly competitive, but with its global infrastructure and early entry into the in-flight connectivity market the consortium has clearly spotted some riches on the horizon.

With a price of $7.21 in cash per share (a 7% premium), as well as the support of the Board of Directors and its largest shareholder Lansdowne Partners, Inmarsat might be heading towards the consortium. Shareholders have been frustrated over recent months with weak earnings results and may well look to exit with some spending money. For Inmarsat, the deal will create some much-needed breathing room to explore the long-term role of satellite in tomorrow’s world of connectivity.

Inmarsat once again in the acquisition crosshairs

Acquisition rumours are once again swirling around British satellite company Inmarsat, this time to take the company back to private equity control for £3.3 billion.

The consortium, featuring Apax, Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan Board and Warburg Pincu, comes at a time where the firm has been facing investor pressures. Over the last six months, poor performance from Inmarsat share price decline by 26%, while acquisition rumours have caused this trend to reverse recently. Share price is still down, but there does seem to be appetite in the market for an acquisition.

On January 31, Inmarsat received a non-binding proposal from the consortium offering $7.21 per share for the entire issued, and to be issued, share capital of the firm. The offer values the business at $3.3 billion, roughly £2.5 billion. This is not a concrete offer, but it is seemingly enough to get the market excited.

Although Inmarsat has reported flat sales growth in its core business units, maritime and government connectivity contracts, there has been increased demand in the aerospace industry, as more airlines demands connectivity, while 5G is on the horizon. The failure to deliver material progress on the promises does seem to be frustrating investors, but there is potential.

While satellite connectivity has been snubbed in recent years, usecases which demand ubiquitous connectivity in the future imply satellite has a broader role to play outside of the developing nations. Due to the civil engineering difficulties, and sometimes commercial constraints of connectivity, satellite is increasingly becoming a critical component of the connectivity mesh.

Interestingly enough, Apax might be a familiar sounding name to Inmarsat lifers. Apax was part of a consortium which bought the satellite firm in 2003, before taking it public two years later.

For some, this might be good news, but what is worth noting is this deal will be placed under scrutiny from the UK Government, which will view Inmarsat as a national strategic asset, and other attempts have failed. EchoStar attempted to acquire the business last year, investors rejected an offer worth £3.2 billion, while Eutelsat was also rumoured to be considering a bid.