The Airbus Zephyr HAPS system. Photo: Airbus

Samer Halawi is a well known figure within the satellite industry. He is held many big roles from the CEO of Thuraya, to the CCO of both Intelsat and OneWeb. Halawi left Intelsat last year, and has now become the CEO of AaltonHAPS, an exciting new start-up. It is an Airbus subsidiary that provides services from its stratospheric Zephyr solar-powered aircraft for mobile connectivity, platform mobility, Earth observation (EO) and government applications. Halawi is excited about the new role, and talks of building a new industry. Halawi talks to Via Satellite about his new role, and why he sees it as the most interesting and fascinating challenge of his career.

VIA SATELLITE: This seems a big change from your roles at Thuraya and Intelsat. Could you tell us why you decided to take this job?

Halawi: This role is about building a completely new industry. I consider this a new frontier. It is an industry and a company that will do a lot in terms of saving and improving people’s lives. At the same time, it is done in a green way and in an environmentally friendly way. So, I think this capability from the stratosphere is really fascinating, I call it a new frontier for telecoms. It has new characteristics that combine the best of satellite and terrestrial, but without the limitations of either. There was something from space that wasn’t quite right and this also applies to ground infrastructure, when serving some use cases especially in rural and remote areas. This gives us the best of both worlds. That was really interesting to me, even when I was still at Intelsat. This technology came to my radar screen, and I got really interested in it.

VIA SATELLITE: Do you think HAPs works naturally into an operator’s multi-orbit strategy, since this seems to be the trend in their future business models?

Halawi: A few years ago, all satellite operators started to talk about having multi-orbit strategies. And different orbits give you different characteristics. This particular orbit is really interesting in terms of the capabilities it can do in terms of talking directly to end user devices. That is a game changing capability in my mind, that and being able to communicate with very low latency. Satellite operators tend to downplay the importance of low latency, but in an age of video conferencing and cloud based services, low latency is important. This capability from the stratosphere, and this project we are doing, has the capability to grow into a very massive business.

If you look at the aircraft Airbus has built, it is an incredible platform. It allows us to cater to use cases that are very difficult to cater to from a satellite point of view or from a terrestrial point of view. Things like mobile connectivity that is direct to end users in rural and remote areas. Border protection, forest fire management, precision agriculture, coverage augmentation, disaster relief. But, in addition to all of this, there is an ability to unlock markets that are coming up in the future. So, things like ‘connected cars’ and connecting eVTOLs and things that move that you can’t connect efficiently from satellite systems or from terrestrial infrastructure. The idea of HAPs has been around since 1945, but the technology wasn’t there to make it happen, now the technology is.

VIA SATELLITE: How are you looking to build this business over the next couple of years? 

Halawi: We are moving away from the incubator phase under Airbus to become a significant business on its own. Now, we have a proven aircraft that is near final design stage. It is the only one that has flown overnight in the stratosphere and has done so for 64 days straight. My objective over the next two years is to industrialize the aircraft. We need to industrialize it and roll out operations. We will build a handful of hubs around the world, from where we launch and land the aircraft. We will roll these out in the next two years, that is one of our key priorities. Building the telecoms business around the aircraft is important as well. The aircraft is like the bus for a satellite, and then you have the payload and everything that goes with it. So, rolling out the telecoms business and deploying the limited supply we have to our first customers will be a key objective for the next two years. We aim to enter into service at the end of 2024. We also need to recruit highly skilled talent, because we need people that are driven by this desire to do good for humanity, but at the same time, do good for the planet.

VIA SATELLITE: Finding a HAPs business model that works has proved far from easy for many trying to enter this space. Why do you think Aalto HAPS can succeed where others have failed?

Halawi: What you need is the technology and the business model, and both need to align. Technologically, with HAPs, we can go directly to the device, but not just in emergency mode, SMS mode, or short data mode. We can go in full 5G with very low latency. It is very similar to a terrestrial tower. Each of these elements on its own very important. You don’t need a dish. You don’t need a tower on the ground. You can cater to all of the services like cloud and teleconferencing, and very importantly, the technology seamlessly integrates with the telecoms operators’ networks. It is not a separate service to the consumer. It is an infrastructure play to the MNO, the customer. They use it to expand their coverage. Commercially, the total cost of ownership is appealing and unbeatable by either satellite or terrestrial. I am talking about the focus on rural and remote areas, not urban areas.

It is scalable, it allows the MNOs to expand the coverage of the network in a profitable way. At the moment, they don’t invest to expand the network beyond a certain point, because they can’t justify the costs of expanding terrestrial infrastructure. What we do is we allow them to cover those areas, not only in a way that is cheaper than terrestrial towers but do it in a way that is profitable to them.

There are other examples. Google Loon started a project and they got good traction from the market very quickly, but what happened is because they needed a lot more balloons to cover a certain area and you can’t control the balloons precisely in where they go. So, what ended up happening is you had a technology that worked, but the cost of that technology was high because you had to use so many balloons. In our case, the technology and the use case align perfectly.

VIA SATELLITE: Are you still on track to launch commercial services by the end of 2024? What will this look like?

Halawi: We are looking to launch commercial services by the end of next year. We will start small. We will build a number of aircraft, then expand as we go. Having said that, we are a revenue generating business. We are generating revenues from proofs of concepts. A lot of customers are so interested in these capabilities that we have, and being a dual use technology, we have customers that are testing our aircraft and payloads. By the end of next year, we will start ramping up in terms of customers. We are talking to a few today, and have them lined up to be the first customers.

VIA SATELLITE: When will Aalto HAPS become profitable?

Halawi: We are a private company, so we won’t share financials. We are focused on launching commercial services by the end of next year. We need to build the business and serving customers. We are benefitting from the fact we are generating revenues. We are not just burning cash to develop the business. We are generating revenues today.

VIA SATELLITE: Are the telcos the main customers for Aalto HAPS? How soon will you have commercial partnerships with them?

Halawi: The technology is really fascinating with HAPs, because you attach different payloads, and it can look very different for different types of customers. Our core business will be mobile connectivity where we have a 5G antenna that will serve mobile operators. We see mobile operators being our core customer group, and the tower companies as well. What we give them (tower companies) is an extension of their product portfolio. Now, they can have sky-based towers for the MNOs. So, they can serve their MNO customers a bit differently. But, there are also things like Earth observation (EO). These services could be used by civil and government customers, to do things like forest fire management, water protection, precision agriculture. This is a whole set of potential customers we could have. In addition to this, HAPs can act like a GEO satellite, with a much lower altitude. It operates in Q- and V-band, it has ample bandwidth, and can do things that are really interesting for service providers that want to bring in HAPs as part of their multi-orbit strategy. So, you can offer services to cruise ships, regular ships, planes, trains, anything that moves on the ground, we can serve with capacity, but not just with capacity, but with capacity that moves with it. Imagine a cruise ship moving around with a plane overhead and it is serving it as well. We could have the cruise operators as customers or the service providers serving them.

VIA SATELLITE: You mentioned cruise lines. SES has performed strongly here, and now Starlink is starting to gain traction. Do you think it is feasible that Aalto HAPS can make an impact here?

Halawi: What we have is that is really interesting is that we have the capability to follow a cruise ship and deliver the capacity overhead, whereas with satellite, they are providing coverage, and depending on where the cruise ship is, the bandwidth availability is different. So, we can do that, not in our first version. Our first version, but in our next version, which will have two payloads, one could serve the cruise ship, while the other acts as a backhaul. As we develop the platform a bit better, we can provide ample bandwidth to cruise ships exactly where they need it, and it is symmetrical. They don’t have to worry about different ratios. Cruise ships now want more and more symmetrical capability because there is a lot more upload compared to download. So, I think we have a very interesting value proposition for the cruise market over the next few years.

VIA SATELLITE: Could you tell us about your plans to develop a number of ports over the next few years? When is the first one likely to be in operation?

Halawi: We will fly from a handful of locations around the world. The reason for this is we want to have complementarity in weather patterns because we want access to the stratosphere all year long. The plane is a small plane and weighs only 75 kilograms. It has the wingspan of an Airbus 320. What you don’t want to do is fly it through storms and bad weather to get it up to the stratosphere. So, we are looking for a handful of locations around the world that in totality will give us access to the stratosphere all year long. Today, we are finalizing our preferred locations in countries, both where the weather is good, and where it is advantageous to establish a hub. Those countries could be sharing and supporting our vision, helping us with this quest, and providing subsidies. We are looking at four to five hubs around the world, and we are just finalizing where they will be.

VIA SATELLITE: What are the benefits of having Airbus as a major shareholder for such an operation/business plan? You also are an independent business? Why do you think the structure of the business will help you be successful?

Halawi: Having Airbus is an incredibly amazing competitive advantage. This whole business is based on an aircraft and Airbus is the best aircraft designer and builder in the world. It has done a great job building this plane. It is not the work of a couple of years. This has been in development for 18 years. Airbus has put a lot into it. They are committed to this project and to providing support on the engineering side, and in other ways as well. It is incredibly important to have a company like Airbus behind it.

Why is it an independent business? We are turning an aircraft into a full service business. Because of that, bringing in the right partners that will add value to this project is something that is key, to make it more successful.

VIA SATELLITE: How would you compare the challenge of this role compared to other roles you have had?

Halawi: This is the most interesting and fascinating challenge of my career. Firstly, we are setting up a whole new industry, rather than joining an industry that has existed for awhile. It is an industry based on incredibly new and fascinating technology. Secondly, it touches on so many elements that are important in the world, and increasingly important in the world, those are direct-to-device, 5G, sustainability, autonomous flight operations, solar power, battery technologies, etc. All of these are trending upwards and these are core to our project. I would say this is a project where we can do good for humanity, while being great for the planet. It has either been one or the other before for me. This one is both. It is quite rewarding from that point of view.