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Tom Choi's Interview on Satellite Today January 2024

Tom Choi Talks Finance, Consolidation, and AI for Satellite Sector



2023 was quite a year in the satellite industry. Huge deals like Viasat/Inmarsat, Eutelsat/OneWeb were completed. Intelsat and SES held merger talks without success, and Telesat announced funding and its plans for its Lightspeed network. And this was just among the legacy operators. With the likes of Amazon and SpaceX continuing to make a huge impact, it was a really busy year for the industry.

Tom Choi, executive chairman of Curvalux and Saturn Satellite Networks and is one of the most outspoken people in the industry, and a former Satellite Executive of the Year winner from 2012. In this interview, we talk to Choi about the seismic events of 2023 and his view the evolution that is taking place in the satellite industry.


VIA SATELLITE: It has been another dynamic year in the satellite industry. If you had to pick two of the most important events of 2023, what would you pick and why?


Choi: I believe the key story for 2023 is that many NGSO [Non-Geostationary Orbit] constellations did not receive their growth or expansion funding. This year was very challenging for growth companies and startups to raise capital due to the high interest environment where investors could find significant short term yields on relatively safe investments. This trend not only affected the satellite sector but also many other growth industries as well. We didn’t hear funding updates for known start up constellations such as Mangata nor Rivada. Many venture capital-led constellations had to pull back on their ambitious plans this year while others had down rounds or shuttered their doors.

Hopefully the investment environment in 2024 will improve but the wild enthusiasm that investors showed for new space programs in 2020-2022 wasn’t matched this year. It’s also sad to see companies that raised significant amount of capital in SPAC deals during those times see their share valuations languishing under 10% of their IPO valuations. With high cost structures, little relevant revenues and limited funds available, I fear for their long term viability. Hopefully investors will learn their lessons and conduct more due diligence on the viability of these business plans.

VIA SATELLITE: We are now a third of the way through this decade. How do you think today’s satellite industry leaders will be positioned by the end of the decade? 

Choi: I have been a known LEO skeptic for many years, but given unlimited funding and strong technical foundations, SpaceX’s Starlink has made an unbelievably easy to adopt system for delivering LEO broadband in the remotest parts of the world. Amazon’s Project Kuiper seems to have similar technical competencies and I believe they will get traction in the market as well. Despite the emergence of Starlink, the GEO [Geostationary Orbit] operators have remained resilient with some growing their market segments. This means that LEO constellations have on a net basis grown the market [rather] than take away from the existing GEO FSS [fixed satellite service] business, although there are exceptions especially in the markets of mobility and maritime. I also believe the LEO systems will capture a new market segment of connecting enterprises to the cloud as a backup solution, something GEO networks cannot do due to the delay.

I believe NGSO and GEO will co-exist at the end of the decade with service providers incorporating the best features of all orbits. I wouldn’t be surprised to see more M&A amongst the GEO operators as well as LEO systems being funded by consortiums of multinational organizations. We are definitely going to have an exciting decade in space.

VIA SATELLITE: What was the most surprising announcement in 2023 from your perspective? What caught you completely by surprise?

Choi: The most surprising news for 2023 was the failure of the payload of ViaSat-3. I don’t know the details but given the technical competence of Viasat, Boeing and all the other world-leading subcontractors, it was surprising to see so much of the payload of Viasat-3 being lost due to this failure. The 1 Tbps ViaSat-3 was a juggernaut would have brought capacity pricing at GEO to remarkably low levels. Our industry needs to continue to innovate to bring pricing down as much as possible to expand the market base. Although there are other companies such as Saturn who are trying to achieve similar cost metrics, ViaSat-3 would have been set the standard in that endeavor. I wish them the best in getting the second Viasat-3 launched successfully.

VIA SATELLITE: Do you think that a multi-orbit strategy is a must for traditional, legacy operators to be successful?

Choi: Whether GEO, MEO, or LEO, the end user services are best delivered by service providers who are experts in various enterprise verticals. As an example of an important segment, companies such as Speedcast have experts who are certified for operating on oil rigs and provide not only a connectivity solution but also various IT services. They would integrate LEO and GEO networks to provide their end users high capacity, low latency and GEO reliability connections. I believe it would be very difficult for GEO wholesale operators and LEO constellation owners who have to manage hundreds if not thousands of satellites and large numbers of global gateways to become experts in multiple enterprise market segments. Thus the constellation owners and service providers will be codependent on each other.

Additionally, the investment thesis in LEO broadband networks is not yet proven so it may be wiser for GEO operators to limit their downside risk by collaborating with other partners to deploy a constellation instead of taking on all the risk themselves. Only time will tell if SES and Eutelsat who have both gone ‘all-in’ MEO and LEO respectively will celebrate or regret their decisions. I would hope that regional GEO operators to pool their resources together to build shared constellations where each party would get their respective IRU capacity much akin to how submarine cables are funded today.

VIA SATELLITE: Will AI be a good or bad thing for the space industry? Will it have less or more impact in space compared to other industries?

hoi: Over time, AI will assist all the industries, including space. AI will enable companies in space to design components and systems with lower mass, higher strength and more thermal dissipation capabilities. We will be able to use AI chipsets and algorithms to have more resolution and faster image processing in Space. Curvalux will eventually develop space beam-forming payloads as it owns a U.S. and EU patent to do advanced phased array beam-forming using AI. I strongly believe AI will touch every aspect of what we are doing in space.

VIA SATELLITE: What do you think will be the three main talking points at SATELLITE 2024?

Choi: We are seeing many new launch start ups enter the market space. We are seeing new companies that are developing low cost and reusable systems from Europe, U.S., India, China, and Korea as well as other countries. These systems are no longer just on the drawing board but demonstrating successful launches so certainly this will be one of the main talking points. Direct-to-device communications will continue to be a noteworthy topic as other industrial giants such as Google will move into this sector as well. I also believe we will see international governments planning their own LEO systems.

VIA SATELLITE: Do you believe the satellite industry has seen a fundamental shift over the last few years? How would you classify the pace of change?

Choi: For too many decades, the satellite industry has been dominated by GEO FSS and LEO MSS providers. It’s great to see new entrants coming in from new space to expand the EO market but also the connectivity business. These new initiatives are going beyond the Earth and planning interplanetary and cislunar missions as well. I believe as more investment piles into the space sector the pace of change will accelerate exponentially.


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