There’s a new entrant in the race to provide internet connectivity to the roughly four billion humans on the wrong side of the world’s digital divide.
Launching from stealth today with a fresh $13.5 million investment led by Andreessen Horowitz is Astranis — the developer of a novel satellite technology that aims to transmit data down to specific terrestrial locations with each satellite it launches.
That’s a significant shift from the way companies like SpaceX and OneWeb are building their satellite networks. Both of those companies are launching satellites into low earth orbit — which means that their satellites orbit the earth every ninety minutes.
For those companies to provide the kind of uninterrupted connectivity that consumers demand, they’d need to have a network of hundreds — if not thousands — of satellites in place to have a fully operational network.
Astranis is planning to launch its satellites into geostationary orbit — farther from the earth and in a location that will remain fixed… which means its satellites can provide connectivity almost immediately after launch.
That differentiation was enough to compel Andreessen to make its first investment in the space space and bring on additional capital from previous investors including Y Combinator, 50 Years, and Refactor Capital.
While the long term goal may be to address the problem of the digital divide, as Astranis co-founder and chief executive John Gedmark writes in his blog post, in the near term, don’t expect to see Astranis satellites powering connectivity in emerging markets.
“It’s not about connecting immediately the next 3 billion people but the next large swath of people that need a connectivity solution for more sparsely populated areas,” says Martin Casado, a partner with Andreessen Horowitz and director on the Astranis board.
Casado says that customer adoption will come because regional providers that hold licenses for spectrum need to use the spectrum they own or risk losing it. Satellite communications become the only way for these license holders to provide services in areas that are too expensive to be connected in any other way.
“Put simply, getting internet access to a remote region requires significant up-front effort and cost that underdeveloped and sparsely populated areas are unable to bear,” Casado wrote in a blog post about the investment. “This is because the only practical methods for bringing broadband to an area are to trench fiber, set up point-to-point microwave towers, or send massive half-billion dollar satellites into space and as a result, charge exceedingly high rates.”
An advocate for connecting rural areas and indigenous communities in the U.S. through the non-profit Mural Net, Casado has experienced the frustration of trying to get access to sparsely populated communities. “The problem of rural access is so complicated that even in the nation that birthed the internet, less than 20% of populations have connectivity in some rural tribal areas.”
Astranis tackles the immediate connectivity conundrum with its geostationary positioning, and the cost and bandwidth problem with a new model of smaller-sized satellites (roughly the size of a refrigerator) and new software-defined radio technology, according to Gedmark.
Unlike previous generations of satellites which could be massive machines that transmitted analog signals, the software defined radio technology enables higher throughput and frequency flexibility to make transmission easier and cheaper, Gedmark says.
While, Gedmark declined to discuss the specifics of the satellite’s cost, he did say that Astranis’ satellites would cost tens of millions of dollars — instead of hundreds of millions of dollars. For customers that means the magic number will be close to the industry’s targeted $75 per megabit per second per month for dedicated bandwidth, Gedmark said. “If you can get below that number you can get a lot more people online. The real goal is to get down to tens of dollars per megabit per second per month.”
There’s no doubt that Gedmark and his co-founder Ryan McLinko have the pedigree to compete with the aerospace giants pursuing satellite connectivity. Before founding Astranis, Gedmark served as the executive director of the Commercial Spaceflight Federation — the industry association for companies including SpaceX, Blue Origin, and Virgin Galactic — and worked as the director of rocket flights for the XPrize foundation’s launches. Meanwhile, McLinko led mechanical and electrical spacecraft research and development for Planet.
Even if the company is able to take a small percentage of the market from SpaceX and OneWeb with that kind of pricing, it would be a huge success given that the satellite telecommunications market is now worth roughly $120 billion, Gedmark estimates. And that’s without including the 4 billion people how currently can’t access the internet.
For us… it’s all about solving this problem,” says Gedmark. “The way to do that is to be in control of the satellites ourselves and get them up as fast as possible.”