GVF Member in Focus: ALCAN Systems

 

An interview with Dr Onur H. Karabey, CEO & Mustafa Bülbül, Business Development Manager

By Martin Jarrold, GVF’s Vice President for International Programme Development

(video available below)

 

ALCAN Systems is developing a new class of innovative smart antennas – ultra thin flat panel technology with very low power usage and able to adjust its beam electronically without any moving parts – at an extremely affordable price. The result is a high-performance and future-proof data connectivity solution for any location. With the ground-breaking method of using a liquid crystal display assembly line for production, the ALCAN Systems’s flat panel antenna represents a technology breakthrough in satellite and cellular communications. ALCAN’s smart antennas are designed to meet the needs of a range of markets including maritime, aero, land mobility, consumer broadband, and enterprise. ALCAN’s systems are compatible with satellites in any orbital altitude (LEO, MEO and GEO) and can support Ka and Ku-band frequencies.

Dr Karabey is located in Darmstadt, Germany, and also at Istanbul’s Teknopark in Turkey. He invented the liquid crystal-based phased-array antenna during his doctoral thesis, which he wrote at the Technical University of Darmstadt. Mustafa Bülbül is one of the founding employees of the company, assisting the CEO in business development and investment activities in the company. He is responsible for the company’s financials, and manages the daily operational activities of the company.

Onur and Mustafa, welcome. It’s a great pleasure to be joined by you today.

I’d like to kick off this GVF Member in Focus session by asking Onur, what in your opinion has or have been the most significant game-changing events in the satellite industry in the course of the last decade?

Onur: First of all, Martin, thank you very much to you and the whole GVF team for having us here. It’s a great opportunity. We really enjoy to be a part of this discussion. A lot of things are happening on the satellite industry and then if you look back to the last decade, from our perspective it’s the technologies and the developments that makes LEOs happening. It’s not only the LEO, but the whole developments around it.

I can categorise them into three. The first of all, the funding coming. The LEOs are not new. We have seen some attempts two decades ago roughly, some are failed, some had to scale back to their business plan and one issue was the lack of funding. To today, the situation is different. The funding is available through government, through let’s say, the big companies, so that’s not an issue anymore.

That’s one important step and also the investors. Now we see a lot of VCs or later-stage investors joining or coming to these investors. That’s a great opportunity, a great time for us. The funding is available. The in companies in the satcom industry, once they get this investment, they developed the new technologies to, let’s say reduce the launch cost, as well as the satellite manufacturing costs. In the past, it was taking years to develop one GEO satellite, and it was very expensive to launch it, but today the situation is different.

It’s public information, the companies are breaking their records, after each launch. The satellite definition changed, the satellite becomes smaller, simpler, so it’s cheaper. We need several satellites and in one launch, you can actually send several 10s of satellites in one launch. This is also great, but that’s not enough to close the whole circle, the ground terminals are also needed.

We see a lot of development, we have a lot of competition there, which is great for all of us. We are pushing the limits and the limits in terms of the better performance, reduce the cost to provide better service to quality. This is still the missing part and if you look to the LEO constellations, let’s say, which are well funded or opportunity to fund the whole constellation, actually, because of its importance, they developed their own antenna in-house.

It’s a very important missing point. At that point of course, ALCAN is also an important player, especially for the consumer market. The long story short, all developments to make a LEOs happening, I see this is the most important achievement in the last decade.

Martin: I see. Thank you very much. Now, in of course mentioning that, the LEO constellations, of which there are many taking various forms and various stages of development at the moment, we have those that are at the moment just filings, we have those that are in process of being developed and we have those, of course, that have already begun to launch, in some cases with quite a significant proportion of their final constellations, a large number of satellites, orbited.

What’s your view of the LEO constellations, both in general terms and perhaps citing some specific examples of the different LEO constellations that are at various stages of development?

Onur: First of all, I believe they will be successful, maybe not all of them, but compared to past, we are really believers of the LEOs and because of the reasons I mentioned, they will be successful. Especially as outcome, we are the one focused on developing this missing piece. As ALCAN and our competitors become successful, they will be successful. I would like to maybe focus a bit more past and the future.

First of all, we know the satellite industry very well since the 1950s. They played a great role in the satellite TV applications. Today our demands are changing. We are maybe watching the television less compared to the previous years. We are more focusing on demanding Netflix or Amazon video-like services. That means it’s not the satellite TV, but it’s the broadband communications which is needed, because all the time the satellite industry proves or demonstrates that they are very reliable infrastructure.

If you look to also the trends in technology, we see that any new technology has to provide two solutions or solutions for mobility as well as to the high data rate. The LEOs enables the mobility and also the high data rates, I would say are the more important and if you also think about the current constellations like OneWeb, Telesat, SpaceX and so on. If you also looked at FCC filings, we see we can actually categorise those applications into two. First and second generation.

The first generation we see mix of Ku and Ka-band, but the future is clear, it will be focused on Ka-band and above. We also see a file inside V-band and other bands. This is physical, independent of which technology you use. The high data rate can be provided if you have only a high bandwidth. High bandwidth is available at higher frequencies. The future of the LEOs I believe as I mentioned, the LEOs will be successful, but the next challenge will be in the future to go to the higher frequencies.

I also believe that technologies are developing. As ALCAN, we are also developing antennas for that. That is one aspect, providing high data rate and there, for example, Amazon, Telesat, they are already working at Ka-band, so they can provide independent of going to let’s say more technical details. They have better chance because of the operating at high frequency.

Also, the LEOs, as you know, also seen as a strategic, let’s say, infrastructure. Investment to OneWeb was a good example. The Canadian government support to Telesat is another example. Also, we see a lot of developments in EU, in Europe. They would like to establish their own constellation together with key industrial partners. Key industrial partners means – Who will drive the volume?

There are some public information and European space agencies driving those activities. ALCAN is also very well integrated to those discussions. Europe is also looking for their own solution. It’s the first high data rate for mobile solution as I mentioned, the second is the strategy. We should have a solution. For example, the Ukraine SpaceX Starlink support to the Ukraine is also a good example just to highlight it.

The satellite is actually important part of our life and as LEOs are happening, they will be a good solution for the broadband communications and they will open up new markets.

Martin: You mentioned new markets and I think looking at new markets will be an aspect of perhaps of your answer to my next question.

What do you believe is the most important role for the satellite industry looking ahead? Earlier on, you made reference to 5G, for example. The extent and the breadth, the importance or depth of significance of 5G for the satellite industry, but perhaps in a little more detail, other use cases within 5G and other use cases adjunct to 5G as well.

Onur: Yes, it’s again in the DNA of the LEOs, what they are offering. I already mentioned that the mobility and high data rates, so independent of satcom or whatever technologies, this is what we are demanding. Think about the mobile phones. Two, three decades ago, the people were happy if they can send an SMS, but today my kids are complaining if we are driving on the autobahn if their HD video and YouTube is not working, they start to complain. The demands are changing.

If you think again about the whole ecosystem, the terrestrial networks, although they do a lot of investment to 5G starting with C-band or sub six, going to millimetre wave like we see in US, just themselves, it’s not enough. They need a complimentary technology like LEOs. LEOs offers latency similar to the terrestrial networking infrastructure. The technical compatibility will be there, is there already.

That’s a great opportunity and if you think about again, from the mobile network side at higher frequency, the Opex and Capex will increase a lot if they want to solve everything by installing more and more base station. As higher frequencies, the signal propagation loss increases, so just roughly future 5G millimetre wave infrastructure or base station should be at least 10 times denser than today’s terrestrial network.

As I mentioned, the Opex and Capex will increase, so there are public courts from Huawei and Nokia CEOs regarding this. They need the technology and at that point, satellite is actually a great opportunity if you are outside the city centre just having a few satellites, as I mentioned, the satellite manufacturing and launch is much cheaper now, and the technology is very reliable, so that will be a great complimentary and we already see let’s say the developments towards this direction, like Verizon and Amazon computer project OneWeb and British Telecom. Those are just examples I remember at the moment and some others as well.

We will see more and more joint developments on this and this will open up new market. I think this is the key here. Otherwise, if you only focus on, let’s say existing satellite markets, which are mainly dominated by, let’s say aviation or the military or government, the maybe 5G part is less critical unless you want to have 100% connectivity. If you think about the new markets like land mobile. We don’t have any solution for connected car. When I say connected car, there will be again, two phases, the other one is autonomous driving, which will be based on sensor onboard computing, which will enable the car driving itself.

If this happens, what we will be doing inside the car as a passenger or as a, let’s say x driver, what we will be doing? We will be again demanding high data rate services and onboarding doesn’t work here. You can just watch videos, the film, but that’s not the solution. Then we need, again, the high data rate internet connectivity. There, the satellite will play a key role. I’m talking about the market, which is a high-volume market and very, very cost-sensitive market. I believe this new LEO satellite industry will play a key role there.

Martin: Thank you. You mentioned an important point at the end there in terms of cost price sensitivities. Now, of course, in discussions about ground segment generally and antennas specifically, there has been so much discussion about the different opportunities arising from different technology bases, different technology approaches to new antennas. Of course, inevitably, as you say, the point does come round to cost because cost relates to scale and we need scale to address these markets effectively.

When it comes down to customer-side equipment, what are your expectations with reference to average cost per terminals across the market with reference to the LEOs and the MEOs? What are your thoughts on this and what are your concrete expectations or prediction, if I might go that far?

Onur: Exactly. I will give you a clear idea, but maybe before I would like to tell a bit of background to that. We should look at this question from the customer or end-user perspective. They cherish service quality and total cost of ownership. I’m telling that because we see a lot of news or press releases that people are providing, let’s say, military grade product to a consumer market. This is overture. Actually, you can do anything with your antenna, you can provide a lot of different features, so this is possible.

However, understanding the other customer needs and provide the technology is the key. This is given. I’m not telling something new, this is given, but we see extreme examples on the market, which makes somehow not really sense there. We are not the only one who are selling that, some other antenna company is also highlighting this. They are good, let’s say the questions or press release regarding to that one.

When it is related with the service quality, as I mentioned, or from ALCAN’s perspective, we are focusing on high volume, low-cost market. Enterprise is our starting point, and we will continue with the consumer market and eventually land mobile. Of course, it’s very critical that the service quality means the connectivity. On smart antenna, you should have always– your beam should be always looking to the right point. Antenna should be smart to know where the signal is, your tracking algorithm should work very well.

As ALCAN, we develop a lot of know-how and we already make several demos to our partners. This is one key point. The second is the total cost of ownership. It starts from the easy installation and continues all the time and then they have to say that it continues with a reliable connectivity. It’s not only that day one it works, but over the lifetime of the product, it should simply work, there shouldn’t be any maintenance. This is important.

Again, if I want to give an example about the land mobile, we see flat panel antennas for land mobile case, which is two to three times more expensive than the car, which makes no sense. That’s what I want to highlight at the beginning. As outcome, we are developing low-cost product based on the liquid crystal technology and we use phased array approach. You know the phased arrays now since 1940s, so we are not inventing the antenna.

They are very well-known, everybody knows that the phased array is based on semiconductors, they consumed high power and they are very expensive. You need the amplifiers, which is very expensive. We solved those two problems simultaneously by using liquid crystal technology. Our key target is, as I said, the low-cost developed, low-cost product. We have an opportunity because of LC technology, and we developed key know-how within the team. Our engineering team developed a lot of know-how how to achieve this.

We can use existing liquid crystal production line. This is not that simple, so since many times many years, we have been optimising our design, so that we can use existing production line as it is without significant investment. This is very important.

As I mentioned, our target is to go dominate high volume low-cost markets. To come to the concrete example, our consumer products depending on the antenna size, so they will be definitely less than US$1,000.

When it comes to the land mobile, so it will be less than US$500. Those are our targets. We are in discussion with the potential customers. There is a part that we can achieve this, especially the car. As I mentioned earlier, in Europe, there are a lot of activities to develop their own LEO constellations and car OEMs are showing interest for that. As ALCAN, we are not only developing low-cost smart antennas, but we had recent announcement that we can make the transparent antennas, and we did this.

This is available on our webpage. We develop a transparent antenna, operating at 28 Gigahertz. This is done for millimetre wave frequencies. This also proves the technology. We can develop the same Ka-band for satcom, so that that can be integrated onto a sunroof of a car. I hope I addressed your questions, yes?

Martin: Yes. Just a quick supplementary question.

There’s always a danger in asking somebody to look into their crystal ball, but you mentioned two particular significant the price points there for different markets. What will be your projection as to when those price points will actually be achieved?

Onur: We will go into the market, the first enterprise market, so this is the immediate market. If you recognise, I didn’t give any price point for it because those are very confidential at the moment, and we are in discussion. This is not far away from what I’m telling to you. Actually, there is also an announcement in our webpage. The enterprise antenna unit will be US$1,500, and the terminal will be US$2,500. This is for the given size.

Some customers are asking a larger version, a smaller version, so the price will scale up accordingly. We are achieving this target. For the consumer markets, it will be ready in 2026. The car land mobile, the first production prototypes will be available in 2026 as well. I believe we will achieve those costs in one year after because those are really cost.

Enterprise, this is an existing market. You can imagine different players, how many units that they are talking. This is a known secret. The consumer and the land mobile, you can easily go to million units. For example, Starlink is a good example. This is a public information the deal that they made with STMicroelectronics, and they are talking about a million units there. This is just the beginning.

Martin: Very, very clearly the 2020s are going to be a very, very exciting period for the antenna industry, the ground segment generally and the industry more widely.

Speaking of the industry more widely, turning to you Mustafa, thinking in terms of interactions between the LEOs as they build out and the existing geostationary orbital infrastructure, what’s your prognosis regarding the interactions between these different systems?

Mustafa: Hello, Martin. First of all, also thanks from my side for this opportunity. I’m very glad to be talking with you. To your question, in my opinion, there are two options. First option is to combine multi orbit service strategy in the form of merger of different satellite operators, where GEO satellites or GEO operators combine services with non-GEO satellites to offer the best possible services to the customers.

The mega-constellation in LEO and MEO can offer low latency where it’s needed, and the GEO can deliver more capacity in urban areas. For this trend, the following examples in the market can be mentioned. First, Viasat and Inmarsat happened and also recently and it is public information, OneWeb and Eutelsat plan to merge. Eutelsat and OneWeb, they both are based in Europe and they can complement each other very well.

This could come to savings of maybe more than €1 billion, which generates advantage for them in the race for the expansion of commercial satellite networks.

The second option is the own development of non-GEO satellite, like as you know from SpaceX with Starlink, or Amazon’s Kuiper projects. This strategy is also driven by Telesat with Lightspeed, or SES. The GEO satellites are necessary to offer additional capacity in urban areas, but if you put more LEO satellites, it could also bring more capacity. This could make the future, maybe of GEO operators more difficult, because as already mentioned in the beginning by Onur, the trend is towards more internet TV, like Netflix or even many TV channels can be also streamed online.

This makes the LEOs very, very attractive. I also believe that the LEOs will be successful and if they be successful, this can happen that the GEOs could have some difficulties in the future. That’s why I believe that GEOs should work together with non-GEO to stay successfully in the market in the long run. It could happen that LEOs could take over the market share of GEO operators in the future because of the mentioned internet and high data-rate trends.

Martin: That’s very interesting. Thank you very much. Well, gentlemen, time has run away with us for this conversation today, for which I’d like to thank you. It’s been interesting. It’s been enlightening and it’s been great to have your particular perspectives brought into, if you like, GVF Focus. Once again, thank you both, Dr Karabey and Mustafa Bülbül. I wish you every continued success with your work in developing these exciting and essential technologies for the greater good of this industry, about which we all care very much. I look forward to seeing you face-to-face at the soonest possible opportunity now things have moved closer to what we used to call normal.

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Full video of this interview can be seen below…

 

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