n ambitious company plans to have a 200-satellite wholesale data and voice network in service around the equator by the end of 2020. Sky and Space Global (SAS) is close to finalising the design of the tiny satellites, following last year’s successful launch of three prototypes, called 3 Diamonds.
GomSpace, a Swedish/Danish company, built the 3 Diamonds and will build SAS’s production satellites. "We’re at the critical design review stage," says Meir Moalem, CEO of SAS. They will be launched in batches of 20-25 a time every two to three months from the beginning of 2019.
If the launches are successful, the satellites, each around 700-750km above the surface, would act as an orbiting network of cell towers. They would mainly serve the equatorial belt, which means the band between 15° north of the equator and 15° south. That means Malaysia, the Philippines and Indonesia are well within the coverage belt, as is a good chunk of central America, though not Mexico. In Africa, Zimbabwe is too far south, but the service will reach Sierra Leone, Nigeria, Ethiopia and Somalia, and as far south as Tanzania and northern Angola.
But SAS has a number of challenges ahead of it. It has a contract with Richard Branson’s Virgin Orbit to launch its satellites, using a rocket carried on a Boeing 747-400 – but "Virgin Orbit still needs to do its maiden flight", admits Moalem. So Moalem and his team have put together a back-up plan. A 10 July announcement says SAS and China Great Wall Industry Corporation will "explore the provision of nano-satellite launch services". If the requirements are met, SAS and Great Wall "will start formal negotiations for a launch contract".
Moalem appears confident. "We’ve signed with the other launch provider as contingency but also for flexibility," he says. The community is growing, he adds, listing three potential rivals that are able to launch them: Firefly Aerospace, Rocket Lab and Vector Space Systems.
So what sort of services will SAS provide through its 200 satellites? Mostly machine-to-machine (M2M) and internet of things (IoT), says Moalem, where small amounts of data need to be transmitted, along with text and other messages.
Users will have a terminal, with an 8cm diameter satellite antenna on top, that will create a local WiFi hot-spot, connecting smartphones and other devices. Users will need a voice-over-IP app called Chatellite to make phone calls, he adds. "Bandwidth is almost zero. We’re extremely efficient, using a very advanced compression algorithm."
How much bandwidth? Give me a number, I ask over the phone to him in Tel Aviv. "I won’t," he says, before relenting: "In order to provide a good quality of call you need 4kbps. We can use 2.5kbps to do a good quality call. I’m not saying that’s what we’re doing."
Traffic will be routed satellite to satellite before reaching its destination. "Our satellites will be a mesh of routers in the sky." SAS has already demonstrated voice calling with its 3 Diamonds prototypes, "and we have demonstrated connections to the PSTN" – the public-service telephone network, the regular phone system. That break-out to complete normal fixed and mobile calls means SAS must be installing some billing software, I say. Moalem confirms that SAS is working with a significant billing company. Which one? He won’t reveal the details. "Does its name start with an A and end with an S?" A roar of laughter comes down the phone at my sly reference to Amdocs, the Israel-based, US-listed telecoms software company.
SAS takes flight
It’s a good time to turn to what one might call SAS’s somewhat unconventional background. It’s an Australian-owned, UK-based, Israeli-staffed company. Moalem is former officer in the Israeli Air Force, who then worked in the country’s space programme to build sensing satellites. His colleagues as founders of SAS include the CTO, Meidad Pariente, who worked on Israel’s Amos satellite programme, and Yonatan Shrama, with a cybersecurity background.
The SAS project started, Moalem told me last year, when he met a group of Australian investors looking for opportunities in Israel. They introduced Moalem and his colleagues to Burleson Energy, then "a junior oil and gas exploration company". Between March and May 2016 Burleson had changed its business, changed its name to SAS, created and acquired a UK subsidiary of the same name and carried out an initial public offering (IPO) on the Australian Securities Exchange (ASX) that raised A$4.5 million – then worth around US $3.5 million, now a bit less. The investors "said we could do an IPO on the ASX on day one", recalled Moalem last year. "I wasn’t an expert. I know a lot more now."
Now, says Moalem on the phone, the company has raised a total of A$35 million ($26 million) "and we need around A$100 million", not necessarily all from the capital markets. "Once we start delivering commercial services", there will be revenue from sales and presales as well as debt, "whatever is the right solution".
Seems small by historical standards, I say. After all, Iridium is spending $3 billion on replacing its 20-year-old fleet of 66 low-orbit active satellites. "That’s exactly the essence of a new space economy," he says, "a significant reduction in capex and opex".
GomSpace is just such a creature of this new age of nano-satellites. It is a Swedish-registered company whose operations are concentrated in Aalborg, a city in the northern tip of Denmark that is best known for a powerful alcoholic spirit called Aquavit. GomSpace’s shares are listed on Nasdaq’s European market, First North.
SAS plans to manage its new satellite fleet from somewhere in the London area. "We’re shopping around for a ground-station facility," he says. It will run three shifts to ensure round-the-clock coverage, employing 20-25 people. But London is outside the coverage area, I note. There will be a VPN, just as there is to control the 3 Diamonds prototypes from Alaska, he explains.
"The ground station will be in the UK, within 50 miles of London. The only thing on the equator will be a remote antenna. The entire operations of the company will be run from the UK." But the company will keep its listing in Australia, he adds. "The ASX has been very good to us." The London base means that SAS uses spectrum licensed from Ofcom, the UK telecoms regulator. It also means that the company exhibited on the UK government-backed pavilion at the CommunicAsia event in Singapore in June.
SAS will be almost entirely a wholesale-only company. "We are approaching telecoms providers and mobile network operators," says Moalem. The only exceptions will be very large organisations that might be direct customers.
SAS announced in May that it had run successful tests with Globalsat using its 3 Diamonds satellites. These confirmed "the ability to deliver a commercial narrowband communication offering in Central and South America", said SAS at the time. The two companies are now negotiating an agreement to "enable the provision of M2M and IoT connectivity services to the region, providing a much-needed service to this underserviced region".
The announcement quoted Globalsat’s CEO, Alberto Palacios: "We believe that when the Sky and Space 200-satellite constellation is complete and operational it will be a game-changing technology that can transform narrowband satellite communications. Globalsat is ready to advance our relationship with SAS to agree on a commercial arrangement, which will see us deliver mobile connectivity and IoT services to Latin and Central America."
Moalem agrees there is no supply chain yet for the sort of cheap terminals SAS will need in a successful market. "Our goal is that in three or four years you will be able to buy terminals anywhere in the world. We will have to provide terminals for the first year or so, but our business is not based on selling terminals."
Where next? Let’s assume that the next two and a half years go according to Moalem’s plans and that by the end of 2020 Virgin Orbit or China Great Wall have launched more than 200 nano-satellites into orbit – they’ll be called Pearl, by the way.
Beyond 2020, "we’re keeping an open mind", he says. Will SAS look at expanding service outside that ±15° equatorial coverage belt? "It is something that we’re thinking about. With all modesty we should first succeed in the huge challenge we have."
Moalem is already talking to "potential customers beyond 15°", he says. The company has made no secret of the fact that it is holding discussions with the Caribbean Telecommunications Union (CTU) and it demonstrated its technology at a CTU conference in Guyana in mid-July.
"At the end of the day we are a commercial business and if it makes commercial sense we will do it," says Moalem.
