Astranis has a plan to slash satellite backhaul costs

Satellite broadband may be all the rage right now, but start-up Astranis has a different target in mind: mobile backhaul.

The latest data from the International Telecommunication Union showed approximately 3.7 billion people around to globe remained offline as of the end of 2019.

Astranis CEO John Gedmark told Fierce that the company believes in order to get them online “we have to get the cost down of satellite bandwidth so telcos can go and build out cell tower networks in the super remote places, the rural places, the places with rough terrain that they’ve never been able to economically do that before.”

“If you get that cost low enough, what we’ve found is that telcos would be happy to go and expand their cell tower networks to these places where it doesn’t make sense to trench fiber,” he said.

The CEO explained the satellite equipment itself is the key to lowering costs. Old systems relied on large, analog satellites that could take four to five years to build. But Astranis designed new, smaller birds which weigh about 20 times less than their traditional counterparts and can be produced in 12 to 18 months.

He added the secret sauce is Astranis’ use of software-defined radios, which allows its satellites to be built on an assembly line and programmed with the proper frequency later on.

“Having a small satellite means that you can build them very quickly, so we can build ours in months not years, you can build them with much smaller scale facilities and a smaller team. Everything is just an order of magnitude more efficient.”

Gedmark said its satellites use standard frequencies in the Ku (12-18GHz) and Ka (27-40 GHz) bands, with each able to offer 10 to 15 Gbps of trunk throughput.

Lay of the land

Data from Northern Sky Research (NSR), provided by Gedmark, indicated there are an estimated 40,000 to 50,000 cell sites that use satellite for backhaul today. The market research group forecast that figure to jump to 800,000 by 2029, according to the information Gedmark shared.

Earlier this week, NSR noted in a press release the satellite backhaul industry is “just scratching the surface of the addressable market,” with around 470 Gbps of traffic carried via this medium out of a total addressable market of 22 Tbps. By 2030, it predicted the satellite backhaul market would generate some $25 billion in annual revenue.

Already, Gedmark said Astranis has seen “enormous interest” in its technology around the world. Indeed, earlier this week the company secured $250 million in fresh funding from investors, adding to the $103.5 million it raised in earlier rounds in 2018 and 2020.

The company launched its first satellite in 2018 and is now working on a commercial program which aims to deploy “dozens” of satellites over the next three to five years, Gedmark said. Its goal is to eventually have hundreds of its birds in orbit. Each will cover a country-sized area and be able to serve “thousands” of cell sites, he added.

“I think we’re really at a turning point here. The ability to use satellite for backhaul…is now something that we think is going to explode. There’s just so much potential there that you can unlock when you get the backhaul prices down to a certain price point.”