Revolutionising the satcoms antenna
US metamaterials specialist Kymeta has been busy raising funds as its innovative satellite communications antenna nears commercial launch. SatelliteFinance speaks to co-founder and newly appointed CEO Nathan Kundtz…
Revolutionising the satcoms antenna
US metamaterials specialist Kymeta has been busy raising funds as its innovative satellite communications antenna nears commercial launch. SatelliteFinance speaks to co-founder and newly appointed CEO Nathan Kundtz to learn more about its next phase of growth and how the technology could significantly shape the market in the years to come.
Ed Ansell: Having been spun out of intellectual property and patent specialist Intellectual Ventures (IV) in August 2012, Kymeta has gone on to raise a considerable amount of funding to develop its technology. How far along with the company’s business plan are you and when are you targeting a full commercial launch?
Nathan Kundtz: Right now we are preparing for the release of development kits to a number of our integration partners addressing a series of verticals. That will happen in the second half of this year. Then next year we will be releasing Ku-band apertures that have been developed jointly with Intelsat to those integrators for the purpose of integration into their satellite terminal products.
One example of that integration process is the series of relationships we announced with Airbus and Intellian as partners.
EA: Are these kind of agreements at this stage in your business vital for your future success? How much are they in order to prove the product?
NK: I don’t think that those agreements are reflective of a need to prove the products, those agreements really reflect the core of our go-to-market strategy. We’re in a place right now, and intend to be for some time, where we want to focus on our value in the industry, which is in antenna design. But in order to make something useful to an end-user, it needs to be integrated into a full terminal and ultimately combined with the service. So in this case Airbus is the service provider and Intellian is the terminal integrator.
EA: Who is the main target customer for these antennas? Are you mainly looking at OEM agreements?
NK: So there are a whole series of integrators that are our partners already and some that will become our partners. Intellian is an example but we have also announced deals with Honeywell and Hughes, and there are a number of others that are in the pipeline.
EA: How does your product differentiate from the current offering in the market and what is so unique about it?
NK: There are a number of answers to that question depending on the specific application that you have in mind in terms of the competitive landscape. Broadly stated, for high frequency satellite communications, as in Ku and Ka-band, the terminal technologies that are currently available typically amount to a reflector-based antenna on some sort of mechanically steered system. There are a huge number of challenges with that and actually you have fairly limited adoption of those platforms in industries where you might think they would be more broadly used.
Those challenges tend to be cost first and foremost, but then also weight and reliability and overall profile impact on the platform. So if you look specifically at say the maritime industry, there are about 20,000 mobile VSATs that have been deployed in global shipping but that really pales in comparison with the over a million vessels that could adopt a two-way access solution. And we feel that the barriers to entry really are about price and ease of integration.
EA: So how do you differentiate with your product and how can you make it at a cost that makes it far more economically viable?
NK: From an implementation standpoint, having something that is flat and electronically scanned really opens up the different ways in which you can put down a platform. For example, if you think about a one metre reflector, the radome alone on this is so large that it typically has to be installed with a crane, where as if you take a one metre fractal antenna it is very easy for an individual to be able to actually pick it up and take it onto the ship in a relatively straight forward manner.
From a price point standpoint, the active layer in our antennas is built out of a liquid crystal sandwich that is essentially the same as what is used in the liquid crystal display industry. So the reason we can get to price points that are dramatically lower in such short order is that we are leveraging US$250bn of invested capital in the display industry. We have partners in that industry for manufacturing and, because we can leverage them, they become a little bit like our foundries in a fabless semiconductor model.
EA: Will that be a big help in terms of your ability to scale up production?
NK: Absolutely, the scale up is actually one of the easiest things to do. One of the specific manufacturing lines in question is what is called a generation eight liquid crystal display line – these are manufactured on sheets of glass that are 2.4m by 2.8m in size, and a single line outputs about 2000 of those sheets every day. So, when we are looking at a 70 cm product, we can put in the order of nine products on a single sheet of glass and that opens up the opportunity for almost 20,000 products to come off of those lines everyday.
What we typically have to do – and the reason that we end up forming agreements like the one we have with Airbus – is that we need to make sure the volumes are there before the application of interest.
EA: Is part of the reason behind these kind of deals to show what can be done with your antennas in the satellite market and increase the likely adoption of them?
NK: From my stand point, broadly stated the satellite industry has a lot to offer but at the higher Ku and Ka-bands it has almost always been for fixed services, and there are a relatively few circumstances in which you need to use wireless communications to serve fixed locations. So opening up that in a cost effective way to mobility is something that the industry writ large has been unable to do at scale.
I know that there are some very large potential markets out there and the adoption curve is one that we will be tracking closely. Right now there are existing satellite customers who are looking for something that is simply a little bit better, either to integrate or at lower cost. But it remains to be seen how many of those new opportunities will come to fruition and at what scale.
EA: The satellite industry does have some rather conservative customer bases when it comes to introducing new technologies, do you think that is something that could stymie your growth plans?
NK: I think the key is that it is about the value that you create for the end customer and that ultimately is what drives and doesn’t drive adoption. If you are talking about an application where the customer is well served today, and it is a pure replacement opportunity, that’s not necessarily a compelling value proposition for that customer. What we are finding is that there’s a lot of areas where either that perfect technology hasn’t been adopted or there’s a much more significant value proposition, and that tends to be where we find our market opportunities.
EA: In terms of these new areas with great potential, do you think the internet of things is an area where satellite can play a significant role and would you be active in that?
NK: I do. The internet of things is not one market and you really need to speak more specifically about what you are looking to do. The places where we see opportunities tend to be in sensor backhaul in remote regions. We have gotten a lot of interest from people who want to monitor various pieces of infrastructure and don’t have the capability right now. There are large swathes of the world where people want to do this and LTE doesn’t exist there today and, quite frankly, setting up a VSAT terminal is often not a cost effective thing for them to do. So we think there is at least a value proposition in that area for Kymeta.
Ultimately the kind of markets that we will drive into will depend on our customers, the integrators. We let them pull us to those areas where they’re finding opportunities with their end customers. Letting them take the lead has been a good way for us to avoid daydreaming about what might be possible and really lean on them to take us to where there are very real markets.
EA: There are a lot of barriers to entry in the FSS market, particularly with regard to DTH services, due to the fixed nature of the antennas and the prohibitive cost of a service provider moving to another operator. With the development of antenna technology, such as your own, enabling a customer to pick up signals from satellites at varying orbital positions, could that disrupt the current model and open it up to greater competition?
NK: That is something I have been asked a number of times before. You really have to think about what service is being provided to that consumer, and the question of whether or not you could switch has a lot to do with the stickiness of that service rather than just the stickiness of the satellite.
The way that I think of the value proposition of an electronically scanned antenna in that context is not the switching to another service provider or pure competition, but really the enablement of the existing service provider to switch users to new capacity. The cost of the actual deployment on the ground of switching current customers to new capacity can be equal to or exceed the cost of actually launching the satellite, which hugely impacts the choice of a service provider to adopt a new satellite platform. So in that case I see a clearer value proposition than trying to further commoditise bandwidth providers.
EA: Another area that is garnering a lot of interest is the demand for satellite to become more flexible and definable, able to change the power and frequency depending on demand. Is this an area where you think Kymeta’s technology can prosper?
NK: I think that is right. If you look at what the cost drivers for a satellite service operator are, their ability to fully utilise satellite and really run them close to full capacity drives the economics of launching and maintaining that satellite. So the more flexibility you have in that platform, both in the ground segment and the space segment, the closer to full capacity you can run the satellite.
EA: And is this an area where you have a competitive advantage with your antenna?
NK: I think we have a competitive advantage in terms of the ability to switch between satellites. In terms of the way we look at the market, our biggest value propositions are still in the mobile market opportunity. So we will focus on those first.
If you look at the maritime industry, we have a great partner in Intellian who would love to be able to provide consumer class terminals for two-way access onto the multimillions of vessel that exist. That only requires the hardware to be installed on to the ships, the space segment already exists so you just need the terminals to be installed for a service to be put together.
We get similar interest from people in the oil and gas markets, both for oil exploration as well as infrastructure monitoring. And we also see interest in the construction, trucking, shipping sectors. These are all industries that are looking for alternatives to LTE, either for a cost reason or an availability reason and what’s available right now just doesn’t meet their demand.
EA: So you are naturally targeting the areas where satellite has an inherent advantage?
NK: Absolutely, that is where it has to start. You go to market in areas where satellite has always had an advantage.
The next area where satellite becomes more competitive with terrestrial markets is in any overlay which has a broadcast or multicast character to it. The best example being the connected car, where there is a real need to push significant amounts of data into vehicles for mapping, telematics and infotainment. The terrestrial networks are, in reality, just far too expensive to be used for many of those applications.
It is a very real market and we are heavily engaged with one of the leading automotive OEMs in that space. I can say that there is existing and growing interest in being able to use satellite to augment their communication needs on the vehicle.
EA: You have previously been linked to working with some of the new satellite broadband mega-constellations, such as Greg Wyler’s OneWeb. Do you see this as a big growth market and one that Kymeta will play a significant role in?
NK: I think we will have products in the market in advance of those launches and those products will be of interest to people who are exploring the use of such constellations. However, we will not comment on any conversations with non-geosynchronous providers except for the work we have already done with O3b.
EA: You raised around US$20m at the end of last year, having raised a significant amount back in July 2013. What has this money been used for, do you plan any inorganic growth and when will you be looking to raise additional funding?
NK: Those funds are in general being used to drive us to commercial scale. We are not undergoing any acquisition conversations at this time.
We keep our financials private but we are always looking for good partnerships. And these partnerships can come in any number of flavours – whether strategic or financial – having good people around the table can help us to continue to grow as a company.
