Tom Choi, former CEO and founder of ABS. Photo: ABS

In the first part of an exclusive interview yesterday, we talked to former ABS Chief Executive Officer (CEO) Tom Choi about his future plans for Curvalux, a new technology system, and how he’s hoping to bring it to market. At first, Choi painted a potentially bleak picture for the future of operators investing billions in new High Throughput Satellite (HTS) systems. In the second part of the interview he talked about his vision for the industry and its opportunity for growth. Read part one of this exclusive interview here.

VIA SATELLITE: You have done a number of different things. You were involved at the start of ABS. Where does what you are doing now rank alongside other things you have done?

Choi: It is just a different evolution. I have learned a lot of lessons in my 20-year career as an entrepreneur and I am applying those lessons in my technological development of Curvalux, and we will deploy it to the marketplace. This new iteration of my new evolution as an entrepreneur will be the defining moment of my career, much more so than anything that I have done in the past. In such a short amount of time, I am stunned by the level of the companies I am having conversations with and the opportunities that come with those discussions. Curvalux is a significant disruption to the marketplace, so our partners are extremely eager to get the services up and running. We are really encouraging people and giving them hope and in some cases, we are giving them a new sense of purpose for their companies. The feeling is awesome.

VIA SATELLITE: You mentioned a lot of smart entrepreneurs who could figure this out. So, let’s talk about one of them, Elon Musk — who is going to be building an expansive satellite system. Has he got this completely wrong?

Choi: We don’t understand his business plan, as he has not shared it with the world. He is a serious person and he is technically brilliant so I do not doubt whatever he has been planning will look amazing. Needless to say, he will face the same challenges that OneWeb and other Low Earth Orbit (LEO) systems will face. People in Silicon Valley and also in space tend to be a bit sheltered. The world looks beautiful from space but down here in the jungle it’s hot, damp, and a thousand things can kill you if you don’t know what you are doing. With that being said, terrestrial wireless technologies have so many advantages over satellites for consumer broadband it will be difficult — if not impossible — for any form of High Throughput Satellite (HTS) to be mainstream for consumers.

VIA SATELLITE: There are some really smart people involved in the space industry that weren’t involved 20 years ago. If these systems are not going to work, are their businesses destined for failure since they aren’t based around launching broadcast satellites?

Choi: Blue Origin is not going to look at running a constellation, nor are they relying their business case on launching them. Jeff Bezos wants to go to the moon and other places to develop outer space. Richard Branson is going to do space launches and space tourism. Of course these companies can benefit from launching constellations and HTS but I believe they have bigger plans.

In a recent article I posted on LinkedIn, I referred to what happened in 1877 — the Great Railroad Strike of 1877. What happened back then was that four of the biggest, most valuable companies on the New York Stock Exchange were railroad companies. They were the most valuable because they made profits running a cartel, charging exorbitant amounts of money to standard oil to transport oil from refineries to distribution points. Rockefeller had captured 97 percent of the market for lighting and heating oil. The rail companies stood in his way of profits and charged enormous rates for shipping oil. Each year, this cartel would increase their shipping rates to standard oil. This infuriated Rockefeller so much that he developed a completely different system to ship his oil. He built a nationwide system of pipelines to completely circumvent rail companies and by the early 1870s, he gave them almost no business. Most of these rail companies went bankrupt by the end of the decade. When a transformational technology happens, it doesn’t matter if you had the best technology in your segment. You could have had the best locomotor that would double the efficiency, but if some other technology comes out and completely obliterates your technology, it no longer matters.

VIA SATELLITE: Are you the Rockefeller to the satellite industry?

Choi: Gosh no, but if I could achieve even 1 percent of what he accomplished, it would be beyond my imagination. But I am one of the guys trying to build the pipeline. If the railroad strike of 1877 has any meaning for the satellite industry, I believe the satellite companies are the railroads and the mobile operators are the pipeline operators. In 1877, people needed heating and lighting oil. In 2018, people need affordable broadband connectivity. Satellite companies were built well ahead of the mobile companies in the communications market. Before satellites had the monopoly on long distance telecommunications and television broadcasting, they got stuck in their ways and didn’t innovate. The mobile operators and their technology suppliers were faster and nimbler and built a trillion dollar business, while satellite companies were napping and resting on their laurels. It’s time to wake up and innovate and do things differently and better than before.

VIA SATELLITE: Is what is going to happen to the rail companies going to happen to the satellite companies as a result of your technology?

Choi: Despite 1877, the rail industry survived and is functioning today. They serve an important sector of the transportation industry but they are not moving much oil, at least not in the United States. The satellite industry will survive and continue to play a role in video distribution and rural communications. HTS consumer broadband, to me, is the one application that will doom satellite companies that bet too heavily in this application because 4G, 5G, and what we’re doing with Curvalux is just simply better (faster and lower cost) at moving the bits to the consumers. Just like when Iridium and Globalstar went into bankruptcy in the early 2000s, they didn’t anticipate the rapid deployment of Global System for Mobile Communications (GSM). Similarly, the Geostationary Orbit (GEO) and Non-Geostationary Orbit (NGSO) systems are not anticipating the rapid evolution of terrestrial wireless broadband technology. Before these global NGSO and GEO systems are even built, there will be significant roll out of 4G and 5G — and other wireless technology deployment such as Curvalux — in suburban and rural areas. Those HTS systems are going to find it very difficult to find customers.

VIA SATELLITE: Tell us about the development of the system. You make it sound so simple, but it clearly isn’t. How did this evolution come about?

Choi: Phased array technology has been around for a long time. Multibeam phased array technology has also been around. I am actually quite surprised that terrestrial wireless people have not built this before 5G. 5G is based on multibeam phased array designed to connect wireless handhelds. Curvalux is multibeam phased array optimized for fixed wireless. We looked around the market and nobody had something similar to what we wanted to create. I was quite surprised. Yet, when you look at the mobile wireless industry, you can see why there has been little innovation. It is because it is dominated by only a handful of companies who are controlling the entire market. Most of the mobile network operators have outsourced their development to the technology companies. They don’t have as much knowledge of how their systems work. They know how to create end user service packages, applications, and content. You have an industry where the network planning is done by the hardware providers, who have no incentive to increase throughput or save mobile operators money. All they are interested in is selling more equipment every three to four years.

You have 3G, 4G, and now 5G. Let me guess what’s next after that … 6G? All they are worried about is creating new standards so that mobile operators pay more money for more equipment. I believe if their interests were aligned with the mobile operators, other companies could have [developed] a similar technology to Curvalux — even 10 years ago. They didn’t because they are not incentivized to do it. They want to sell more handsets, mobile base stations, and network cores. It seems there hasn’t been someone in the middle thinking how best to use certain frequencies to maximize the throughput to save spectrum and capex. This is what we are doing with Curvalux.

VIA SATELLITE: You started the conversation with how the mobile industry has gone from $200 million to $1 trillion. So, is there a case for them? They are having extraordinary growth — why do they need to change a winning formula?

Choi: This technology is very disruptive to the mobile industry as well, because it will dramatically reduce the cost of backbone access to their mobile base stations. So they could adopt it or be demolished by their competitors who adopt it. Our system will make the cost per Mbps backbone access drop below 5 cents per Mbps — a figure unheard of in the past for microwave, fiber, or satellite backhaul. They could benefit from it and adopt it, or they can watch their competitors do it and take away their market share.

There is tremendous interest in our technology … and we expect to sign deals this summer and deploy systems later this year.