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Global connectivity

October 4, 2021

The fundamental and most important kind of digital communication is what the telegraph first introduced and what we still use to remind our partners to pick up milk: short text messages, delivered quickly, even if some latency means that conversations might be stretched out rather than having two-way immediacy. Lynk has demonstrated the capability of providing that world-wide by satellite, to ordinary cellphones.

MessageinabottleThat may not sound earth shattering. SpaceX, OneWeb, and Amazon are planning to deliver broadband worldwide. The difference is that those all require special transceivers designed to work with each company’s satellite cluster. For the consumer, that significantly raises the price of entry, requires setting up equipment, entails commitment to a service, and creates a barrier to  mobile use. Their business model is to replace your cable company. Which indeed would be a good thing. But it’s a large thing, both to deliver, and in switching consumers’ current practice. Lynk’s business model is to work with existing carriers to provide messaging where cell towers don’t reach:

According to Lynk’s research, the average mobile phone in use today on Earth is only connected to a terrestrial network about 85 percent of the time. So as many as 750 million people are experiencing disconnectivity at a given time. That’s the market Lynk intends to serve. So far the company has reached carrier agreements with Aliv in the Bahamas and Telecel Centrafrique in the Central African Republic.

To the customers whose carriers interconnect with Lynk, it merely means they get charged some small fee per SMS, when they text where cell towers aren’t visible. Would I pay a quarter per SMS, to send and receive text messages while on a boat delivery to the Caribbean? Or in some remote spot of south Texas outside cell range? Oh, hell yeah. I suspect that goes for most who have been disappointed on multiple occasions that they weren’t yet in range of a cell tower. And Lynk will provide that, with just a small fraction of their planned cluster launched. The growth in their cluster reduces latency. Until, eventually, they can provide full broadband. There’s something deliciously organic about that business model. 

AST, a Texas company with ticker ASTS, is planning direct satellite to cell device broadband, launching large satellites with phased array antennas. Their plan is running into some resistance from regulators. I suspect they will overcome that. Fewer, larger satellites seem to me no more a space pollution problem than more, smaller ones. Unlike Lynk, they are going to try the big leap to full 4G/5G connectivity. Which requires getting most of their cluster launched and working before delivering service to customers, some years down the road.

My investment vision usually proves wrong. With that caveat made, I suspect the companies that are going direct to cellphone will prevail over those requiring a specialized transceiver.  The way to eliminate the cable companies isn’t by replacing what they deliver to your home, and the current equipment in your home to handle that. Rather, it is to make your existing cellphone have all the connectivity you want wherever you happen to be. Your laptop then gets connected the same way it does now, by wifi. Just through your cellphone, rather than through your home router. Or, your laptop disappears, in favor of a screen and keyboard as extensions to your phone, when you want those. All those modems, wifi routers, satellite dishes, wifi extenders, and related cables in your house? They become obsolete. Like acoustic modems before them. And the sooner, the better. No one ever wanted any of that. They were just the burdens people accepted, to get connected.

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