Today's Edition
ABU DHABI (ALETIHAD)
UAE-based Space42 and US satellite communications company Viasat are setting up a new company that will provide shared satellite and ground infrastructure to help mobile operators extend voice, text and data services to areas where conventional cellular networks are unavailable or have limited coverage.
The two companies have signed a binding agreement to establish Equatys, with combined equity commitments of up to $1 billion, according to a joint statement issued during World Space Business Week in Paris.
Equatys is designed to enable smartphones, Internet of Things (IoT) devices and other terminals to connect directly to satellites. This would allow mobile operators to extend services beyond the reach of their terrestrial networks, including areas where mobile tower coverage is unavailable or sparse.
The business seeks to replicate in satellite communications the Tower Company model widely used by terrestrial mobile operators.
Under that model, instead of every telecom operator building and maintaining its own towers and other infrastructure, common infrastructure can be shared by several operators.
Equatys plans to apply the same principle in space. It will provide a neutral, shared layer of satellites and associated ground infrastructure that can be used by multiple licensed satellite and mobile service operators. The participating operators would continue to control their own spectrum rights, customers and commercial relationships.
The proposition is that sharing the expensive underlying infrastructure, rather than requiring individual operators to develop separate satellite systems, could lower their capital requirements, speed up deployment and improve the availability and performance of services.
In effect, Equatys intends to operate as a shared infrastructure provider rather than as the mobile operator serving the end customer. Mobile and satellite operators would use its space and ground network to extend their own services directly to compatible devices in places their conventional networks cannot adequately reach.
Upon formation of the company, Space42 and Viasat will each make an initial equity contribution of $400 million. Space42 is expected to contribute a further $200 million in a future funding round open to third-party investors, taking the two companies' combined commitments to as much as $1 billion.
Equatys is expected to obtain additional funding through third-party equity and debt as the platform expands, while other strategic and financial investors will be able to participate in future funding rounds.
Development of the initial satellite constellation is being accelerated through a separate agreement to increase joint funding. Viasat is expected to be appointed Equatys' prime technology contractor once the company is formed.
The initial constellation will form the first phase of an architecture designed eventually to scale to as many as 2,800 satellites across 60 orbital planes and three altitude layers, allowing additional satellite capacity to be added as demand increases.
Karim Michel Sabbagh, Managing Director of Space42, said Equatys would bring to the satellite industry an infrastructure approach already familiar to mobile telecommunications.
“For the first time, the satellite industry is building infrastructure the way the mobile industry thinks: shared, interoperable, standards-based, and designed for billions of devices rather than millions of subscribers,” Sabbagh said.
Mark Dankberg, Chairman and CEO of Viasat, said the partners were creating a new infrastructure category for direct-to-device and advanced mobile satellite connectivity, backed by spectrum assets, committed capital and a business model that had already proved capable of scaling the mobile industry.
He said Equatys' shared infrastructure model was intended to provide operators with choice and economies of scale while creating growth opportunities for investors and partners.
Space42 and Viasat together have commercial relationships with more than 400 mobile operators worldwide and access to more than 100 MHz of globally coordinated mobile satellite spectrum for advanced satellite and direct-to-device services, the statement said.
The formation of Equatys, procurement of the satellite constellation and related agreements remain subject to customary closing conditions, including regulatory approvals and the appointment of Viasat as prime technology contractor.
