Voyant 's Aviation Broadband...Cleared For Takeoff
The airline connectivity sector has come back to life with a roar.
Several companies are filling the void left by the collapse of Connexion by Boeing nearly two years ago.
While Row 44, AirCell, AeroMobile and OnAir are early into the game, it's Voyant that boasts by far the most bandwidth and lowest cost per bit.
As a follow-up to our interview with Voyant CEO Dana Waldman after the company's annual meeting, we thought it would be timely to get some answers to more questions that we have specific to their Aviation Broadband business.
Interview with Dana Waldman CEO of Voyant International Corporation concerning Voyant’s Aviation Broadband business unit.
In this interview, Voyant makes forward-looking statements about its future expectations, plans, and prospects. There is a risk that the actual results it achieves will differ from those forward-looking statements. To better understand these risks and the reasons that its results may differ from its statements, please read the “Forward Looking Statements Note” on the Investor page of Voyant’s website and its filings with the Securities Exchange Commission, especially Forms 10KSB and 10QSB.
Can you explain how Voyant’s Aviation Broadband solution works?
Sure. Voyant is using an air-to-ground approach to provide high-speed connectivity to and from planes. We will use a network of antennas on the ground to communicate with the airplanes as they fly overhead. Within the plane itself, there will be the airborne equivalent of a Wi-Fi hotspot. In regions where it’s permitted, like Europe, the plane will also have mini-cells for mobile phones and PDAs. We’ll leverage the same commercial technologies in use in businesses and offices today, just modified to be flight-qualified.
The result will be somewhere between 10 and 35 Mb/s to each airplane, which is the sort of high-bandwidth connectivity that people demand for a real broadband experience. That’s 10 times the capacity of other terrestrial-based solutions at a similar cost. It’s also about 10 – 100 times cheaper on a per-bit basis than satellite-based systems.
Why aren’t you using satellites to connect to the airplane? That seems easier.
Satellites are effective, but far too expensive to be practical to provide truly broadband connectivity. This was why Connexion by Boeing failed two years ago. They had a good service, but it was far too expensive to be commercially viable.
Remember that everyone on the plane is sharing the Wi-Fi and cellular network connection to the ground. If there is only one user, you don’t need a big connection. But just like any other hotspot, a plane will have several users sharing the connection simultaneously. And these users will be using very bandwidth-hungry applications: sending and receiving rich media (like videos), connecting to corporate VPNs, using Web 2.0 applications, voice calls, and lots of other things that are just now emerging.
For a satellite-based system to handle all that, you would need to dedicate an enormous amount of transponder capacity to each plane, and that’s just not economically feasible.
Also, remember that we’re not just talking about connectivity to a single airplane. We’re talking about entire fleets of aircraft.
Can you explain what is needed for this system? What type of equipment will you be deploying on the plane? Are you building your own network of cell towers on the ground?
Each plane will be equipped with wireless networking equipment, kind of like a hotspot in the air.
In regions where the law allows, the plane will also have a GSM “picocell” for cell phone and PDA connections. All of those signals are collected sent to one of our special radios on-board the plane. It’s this radio that has much of the magic in it.
Our radios are software-programmable and frequency-agile, which means that we can transmit very advanced, proprietary signals that are compatible with regionally specific spectral regulations in different parts of the world. That’s one of the reasons our solution can be used, not just in the U.S., but also in regions like Europe and elsewhere.
Our friends at Harris originally designed this software-defined radio for government communications, funded through government R&D. We are able to use that platform and embed Voyant’s own modem algorithms, which were developed first at Lockheed Martin, enhanced at Centerpoint, and then acquired by Voyant.
Our radio sends this signal out through an antenna that’s mounted on the belly of the plane, which points down to the ground. This is a relatively simple antenna, not nearly as complicated as a satellite antenna. The fact that it’s on the belly of the plane, instead of the roof, means it’s also much easier and cheaper to service than a satellite antenna.
On the ground, on the top of existing cell towers and on rooftops, we place another antenna and another of our special radios. We are definitely not planning on building our own cell towers. We’ll simply rent space on existing towers, just like the cell phone companies do. From these towers, we then transmit the signals that came from the airplane to the Internet and to our control centers.
That sounds like a big ground infrastructure, which seems very expensive.
Remember that we’re pointing up to the sky, and we have very advanced wireless signals at our disposal. We can launch our service over a region about the size of the U.S. or Europe with only about 100 cell sites. Ultimately, we plan on growing this network to about 300 sites for full coverage.
Also, we’re not talking about physically building towers or running new connections on the ground – all of this happens through today’s existing infrastructure. So we’re just talking about deploying a few hundred of our own antennas and radios.
What about over the ocean, where there are no cell towers?
Our architecture is clearly focused on intra-continental flights. For flights over oceans, airlines will need to use satellite-based systems, which will be more expensive. The airlines we’ve talked to all understand this. Most airlines have separate fleets anyway, with different configurations for intra- and inter-continental flights, so having separate connectivity equipment is no problem, especially when our system is so much less expensive.
It’s important to note that intra-continental flights in the regions that we’re addressing make up over 80% of the world’s flights, so this is where most of the passengers are. Consequently, we see this as the largest and most attractive aviation connectivity market for us.
Can you give us an idea of how your team’s past work with Lockheed Martin and other government programs relates to this Aviation Broadband solution?
The Lockheed Martin technology was unique for its bandwidth efficiency.
The focus of the development was to operate as efficiently as possible from a satellite to the ground. Our problem here is somewhat analogous. We want to pack the maximum capacity into the available spectrum.
Here, instead of the harsh environment that satellites create and transmitting 23,000 miles up, we have a more straightforward problem of just transmitting 35,000 feet down to the ground.
To some extent, we are under-utilizing the full capabilities of the technology for this application.
You referred earlier to the Connexion by Boeing program, which Boeing dumped two years ago after investing over $600m Connexion project. One of Connexion’s early customers, Lufthansa, said last year they expect to re-introduce aviation broadband service in 2008. Can you comment on that?
The Connexion by Boeing approach was a satellite system aimed at trans-oceanic flights. At that time, the satellite antenna and associated electronics were quite heavy, and they were only able to outfit the wide-body planes (767, 777, 747, etc), and so their market was a fairly small niche.
We’ve already discussed the cost challenges associated with leasing expensive satellite transponder time, and they just weren’t able to make the economics work. Lufthansa was indeed a Connexion customer, as was Singapore Airlines.
Lufthansa is now in the process of restoring connectivity to its long-haul fleet, hopefully utilizing the Connexion equipment that is still there. At the same time, Lufthansa and many other carriers are looking for a solution to bring connectivity to their continental fleets, as well.
Have you discussed the Voyant ABS solution with many airlines?
Yes, we’ve been actively discussing Voyant with quite a few airlines, especially in Europe. In fact, our team just returned home from a tour of European airlines, and the response they received was quite positive.
You mentioned at your annual meeting that you were focusing heavily on Europe. In one of your CEO letters, you state “We caused quite a stir at a recent industry tradeshow in Germany.” Why the emphasis on Europe?
Europe isn’t the only market we’re pursuing, but it is a particularly attractive market for us right now. The airlines are somewhat healthier financially than their counterparts in the U.S., so they’re better able to concentrate on rolling out new services. Passenger demographics are also good for us, with a lot of business travelers who are hooked on high-bandwidth connectivity.
Europe is also ahead of the U.S. in permitting cell phone use on airplanes, which is an additional revenue driver for us. Finally, the geography of Europe is attractive, with a large land mass, a dense and well-developed ground infrastructure, and bodies of water that are small enough for us to cover from the shoreline.
We’re not just going after Europe, though. There are attractive markets for us in the U.S., Australia, and several parts of Asia.
What is the one thing the major airlines, providers, competitors were impressed with.
Our ability to provide such a high capacity solution without expensive satellite leases is getting the industry very excited. As we continue to execute and attract additional partners, we expect the momentum to continue to grow.
Your new website has an unusual domain name. What is the significance of the ".aero" designation?
Yes, we recently launched a website at www.voyant.aero dedicated to this business unit.
The .aero domains are restricted to legitimate companies in the aviation and aerospace business community, so that “domain squatters” can’t buy them all up. We chose to use voyant.aero because it assures airline customers who visit the site that we are a serious player in the industry. After all, the promise of up to 35 Mbps per aircraft is not something to take lightly!
Can you elaborate on what Harris has brought to the table and what else they could bring?
The first thing Harris brings to the table is their software-defined radio, which is a perfect platform for Voyant’s own modem technology. In addition, Harris brings tremendous communications systems experience and the clout of an $8B aerospace and communications company.
We have a very close working relationship with Harris, and that helps on day-to-day engineering interactions, as well with more strategic cooperation. Going forward, there are several additional roles that could play, such as running the actual network or providing ground connectivity, both of which are areas of expertise for Harris.
Aside from their immediate financial interest, does Harris have a strategic incentive for Voyant’s Aviation Broadband to succeed? If so, what is it?
Harris has a huge incentive for Voyant Aviation Broadband to succeed. Harris and other aerospace companies are always looking for ways into commercial markets where they can leverage technology funded by the government. In fact, I spent much of my aerospace career trying to do exactly that, so I know first hand how important it is.
In our interview dated 6/4/2008, you said “We received a call from a major player yesterday asking us to demonstrate our Aviation Broadband solution as soon as possible.” Are you at a point where you can elaborate on that?
Not just yet, I’m afraid, but suffice it to say that we are very excited.
It seems that a big program like Voyant Aviation Broadband will have significant capital requirements? Are you talking to any potential partners that would provide or reduce the need for capital?
Yes, putting together this type of system definitely requires a fair bit of capital. Going after a business this ambitious is no small undertaking. We understand that and are working a variety of financing strategies unique to this business.
So many airlines are struggling right now. With the high price of oil, isn’t this a difficult time to be entering the aviation business?
Actually, the challenging airline business is playing to our advantage at this moment.
Many airlines are losing money, so they’re trying to find new revenue streams. Some have resorting to charging for check-in bags, or even just for a soft drink. We are providing them with new revenue opportunities, and that’s attractive to them. An airline with the Voyant system will be able to make money, not just by providing Internet access, but also by marketing other goods, services, and entertainment to this captive audience. So at the end of the day, the return on investment for the airline is actually quite attractive.
Have you seen AirCell’s solution? Or do you understand how it works? How does Voyant’s solution compare to AirCell’s?
We know a little about AirCell. Their marketing department is going full-blast right now, generating a lot of buzz around their service launch. We think that’s good for the entire industry.
AirCell also uses an air-to-ground approach. However, in their case, they operate over a small amount of licensed spectrum here in the US. It limits the capacity they can provide, so it’s natural that they are focused on convincing the airlines and the consumer that they don’t need much capacity. It also means that they are limited to providing service in the U.S., since buying spectrum across a multi-nation environment like Europe would be very difficult.
With our scheme, we don’t suffer this limitation.
At the end of the day, we believe our system and service will scale better than anyone else’s, and we’ll scale while maintaining attractive price points. That is our focus. There are ground-based and satellite-based narrowband solutions that will be in the market before our system is finished, but based on our conversation with airlines so far, many of them believe that Voyant’s system will be worth the wait.
AirCell claims speeds of 2 Mbps, but you claim up to 35 Mbps. Why are American Airlines and Virgin America trialing AirCell if your solution offers much faster speeds?
Airlines want connectivity and many of them want it now…so it’s good to see that companies are able to provide initial capability. We expect to be able to provide a much more scalable solution at low cost. We believe that providing 10 times as much capacity is a huge discriminator.
What about Row 44? They are claiming 30 Mbps.
This is where we need to be careful about comparing apples with apples.
Satellite-based solution providers like Row 44 typically talk about the amount of bandwidth shared across and entire fleet.
So we have to compare 30 Mbps shared across hundreds of airplanes with Voyant’s 35 Mbps to each individual airplane. We’re providing hundreds of times more bandwidth!
How hard would it be to “retrofit” AirCell GoGo or Row44 planes?
That’s not a current focus for us.
Can your connection speeds ever increase? Is there a limit?
Our years of communications experience indicate that communications capacity is always increasing and limits are constantly being pushed. The team at Voyant has a 20-year legacy of helping to make that happen.
Wouldn’t major content players (TV networks, SONY, Apple, Netflix, etc.) benefit from being involved in this type of business?
Absolutely. We’re connecting all of these captive users to the outside world, and our goal is to monetize these connections. The types of companies you’re describing are all hungry for viewers, and together with the airlines, we’ll be in a position to deliver those viewers and purchasers, direct from 30,000 feet.
We intend to be the network owner/operator. That could include licensing opportunities, as well as advertising revenue.
Are there any estimates about the size of this upcoming market?
There have been a few industry-analyst reports published in the past few months. Based on these reports and our own knowledge of this market, we certainly believe that the market will exceed $1B within a few years.
Do you see your Aviation Broadband system being utilized by the military?
The military is an excellent potential market segment for us. We have a long legacy in that industry, but right now we’re focusing our resources on the commercial airlines market.
What other applications could this bandwidth-efficient modem technology be used for?
Well so far, I’ve personally been involved in using this technology for satellite to ground communications, ground-to-ground communications, cellular backhaul applications, alternative Internet access applications, long-haul fiber-optic communications, digital cable applications, and now airplane-to-ground communications.
I think it’s extremely versatile, and there are many more applications still ahead. This is what makes Voyant’s stable of intellectual property and know-how so valuable. Other exciting potential uses include medical imaging transfers, 4G and 5G cellular applications, and too many others to discuss here.
What is the biggest obstacle that the Voyant ABS solution faces?
Time-to-market and funding are our biggest challenges. This is a big venture-style play. As we discussed earlier, we’ll need a significant amount of working capital, and we’ll need to make sure we meet the market window. So far, we think we’re in good shape on both fronts.
What do you think we be the tipping point for Voyant’s Avitation Broadband business?
Once we have demonstrated a succession of airline trials, I think you’ll see this business really start to take off. We are coming to the airline industry with a very significant value proposition. Once one airline uses the Voyant system to provide their passengers with a true broadband experience, that airline’s customers will be forced to respond, or they’ll lose market share. That’s when this business starts taking on a life of its own and really starts to accelerate.
For a complete summary of Voyant, please see our initial recommendation titled Next Generation Internet Holding Company
Highlights in red indicate statements we found of interest.
Graphics reproduced by permission from www.voyant.aero |
