Interview by Elmon.cat. Find original article here
INTERVIEW with the CEO and co-founder of Sateliot, one of the companies behind the Enxaneta and designer of the Minairó, about the potential of the Internet of Things, the importance of the space economy, and Catalonia’s role in the sector.
Sateliot has made an exponential leap in just six years of existence. Created in 2018, it has become one of the central pillars of Catalonia’s space economy strategy, leading two of the region’s three satellite launches: the Enxaneta, in collaboration with Open Cosmos, and the Minairó.
The company’s significant technical and cultural impact of these first two missions in Catalonia may become a regional milestone if it achieves its short-term goals: they expect to generate 1 billion euros in revenue by 2030, offering real-time Internet of Things (IoT) connectivity. Jaume Sanpera, the CEO and co-founder of the Catalan company, reveals that the secret lies in experience: after a long career in telecommunications, he and the entire company’s governance saw an incredible opportunity for market scalability.
More than half a decade later, and waiting for Elon Musk, Space X, and the US Federal Aviation Administration to start the commercial period, Sateliot has secured the connection of eight million devices—twice that of the rest of its sector combined—and deals with mobile operators in 56 countries. From an office in Carrer Berlin, in the heart of the Sants neighborhood, they are setting the new connectivity standard and looking towards a future—not far off—of 6G, quantum encryption, or autonomous driving.
Sanpera received El Món Economia in his office to discuss space, Catalonia’s technological potential, and an industry that not only the country but also the state and Europe should consider strategic.
Sateliot started its activity in 2018 and expects to generate 1 billion euros by 2030. How can your business scale like this?
It’s a business model designed from scratch to scale very quickly. All the management committee members have extensive experience creating companies, and this has been one of our obsessions. In the last company we opened in 25 countries, we learned that starting to sell in another country costs a lot of money, and it takes a lot of work to scale in the telecommunications sector. So we opted for a B2B model: our client is the mobile operator, who already has the customers and the end devices. We are an extension of coverage so customers can connect in the middle of nowhere using the same device they already have. To do this, we have designed a unique satellite in the world—there is no other—that works under the 5G standard, the protocol all operators use. For that, we have designed a core connected to our satellites to enable roaming with the operators.
For example, when a client goes to France, their phone connects to a tower that has never seen before; the tower asks Movistar, or any other operator to grant your access. We do exactly the same: the satellites capture a device that asks for permission to connect; we ask its operator and give it access. For the end-user, it is transparent; for the operator, it is better service, a new source of sales…
Was there a technical gap in global connectivity when you entered the sector?
Yes. In 2018, we looked at the market and found the big satellite operators with 100% proprietary devices. If you want to connect to Iridium, you must buy an Iridium modem; it’s the same thing if you want to connect to Orcom or others. These devices range from 150 to 250 euros each because they cannot benefit from economies of scale.
Customers who have no choice but to connect—a dam in the middle of nowhere, a pipeline, or a container ship—spend 200 euros per device and 20 euros per month for the network. But, to do it massively, nothing is available. We have the privilege of living in a country where connectivity is widespread. In Catalonia—and in Spain, and Europe—there is a lot of coverage. But in the USA, if you go 20 minutes far from Washington, you are already out of coverage. Not to mention Latin America! In Brazil, which is one of our big markets, 70% of the arable land is not covered by mobile operators. Brazilian farmers want to be able to connect their devices everywhere, but there is no one to provide this service. Here comes our connection: the same device, with the same operator, will now offer coverage everywhere. When we say we will generate 1 billion euros, it is because we see it: before starting the commercial phase, we have already signed orders with end customers, and by 2030, this will be exponential.
Has the reception of the mobile operators been similar in all markets?
It depends on the needs. As I said, Brazil and the USA see it very clearly. Verizon needs it because they have pending demand. In Europe, there is less interest because there are few points without coverage. Mobile operators, however, want to avoid infrastructure investments. Their customers pressure them to have coverage in places where they know it is not profitable to put it. Our offer for them is very good: they keep the customer, can charge a bit more for the service, and do not have to invest in capex.
What does this new standard mean compared to the old satellite operators?
Standards are unstoppable. More than 5 billion devices are already connected under these standards. When we started in 2018, we decided to take advantage of this connection. From a hardware point of view, the devices did not need modifications, but from a software point of view, they did. We could have offered additional software for those who wanted to connect with us. But, once again, obsessed with scalability, we sought a way that nothing had to be changed: joining 3GPP, the global organization that defines the mobile connectivity standard. In 2022, version 17 was approved, and Sateliot is the world’s top contributor from the space sector, allowing the same device to access both terrestrial and non-terrestrial networks.
Has the market adapted since 2022 to the new reality?
We have a three-year advantage. We think there will eventually be two or three IoT constellations in the world. There cannot be more, nor does it make sense to have fewer. In each country, there are three or four major mobile operators. It is possible that in Spain, we have Telefónica; MásMóvil signs with another, and Vodafone with a third. We believe it will be a trillion-dollar sector because it is, by definition, global, and the business must be exploited globally.
How is the integration with the terrestrial network? More so in your case, with Cellnex being part of Sateliot’s capital.
The technologies complement each other very well. Elon Musk has Starlink, which is a fantastic broadband solution for rural areas, but no Starlink satellite can connect Movistar’s customers in Barcelona. Terrestrial infrastructures are ideal for dense areas. For less dense areas, a telephone antenna makes no sense. One has density and capacity; the other has coverage.
As Sateliot works with the operator, how do you detect IoT penetration in the end customer?
It always happens the same way: the first waves are from large companies that have a clearer vision of the technology. Smaller users usually enter later. But they will end up joining, even without knowing it. The end-user does not need to know if they are connected to a satellite or a base station. There will come a time when we will have coverage everywhere for IoT and mobile phones. Soon, operators will leave behind the colored coverage maps and reach everywhere. The small user will join through the mobile operator—we alone could never get the long tail. A farmer will have some cows connected by satellite and others to a base station. Having a device with an app that automatically tells you the health status of the five—or five million—animals you have will be very easily integrable.
You plan to reach the commercial phase this summer. At what point in the journey to 1 billion euros is Sateliot?
We have already launched two initial satellites, which were not commercial but to demonstrate the technology. Now we have built four more, the first commercial ones. They are in pre-launch: we have them already integrated into a Space X Falcon 9 in Vandenberg, California, from where transport missions are launched. The launch could be at any time: two weeks ago, there was an incident with Space X, with the explosion of a rocket. Then, the FAA, the US agency that regulates launches, stopped all of them. We are in line, waiting for the investigation to finish—which won’t take long because many people are waiting.
What does reaching this commercialization phase mean for the market—investors and customers?
We have been investing and developing the technology for almost six years. We started signing contracts with end customers a year and a half ago. This somewhat goes against the B2B philosophy, but we wanted to facilitate rapid deployment of services for operators. To avoid waiting for the company to start expanding, we are already providing the first customers. Worldwide, all satellite operators together have four million connected objects. We have binding agreements for eight million devices, twice the current sector. This is because there was a lot of interest and a market that had been underestimated.
Will it be challenging for telecommunications companies to start moving in this direction?
It always is. It is never immediate or easy for all parties. Our experience is that the move will be slow: we think it will take a year. That is why we are accelerating it as much as we can. In the USA, we already have one million lines signed, this will raise some eyebrows at Verizon.
Are conversations with operators already happening?
Yes. We have agreements in 56 countries to extend the lines of the respective operators.
What is the critical milestone that you mark as the starting point?
We have done it very Catalan-style. If we had been Americans, we would have sought 200 million euros to deploy the entire constellation and start operating in real-time. But we have seen that there are a series of use cases that do not need real-time, where the delay is not an issue. Smart meters, for example, need to send a message a day from the middle of nowhere. Others require a message every hour: logistics, maritime… With the four satellites we will launch, we can already offer several messages a day worldwide. The eight million contracts with end customers we have signed require a minimum of two messages a day, and we can already provide service to them with the next launch. Next year, we will have a message every hour, and the following will be less than five minutes per connection. These are our three phases, each with its associated sales.
What is the funding process like for a solution like Sateliot?
It takes work. Seeking funding in pre-sales is always complicated. I always say the same thing: Barcelona could perfectly be a Silicon Valley. We have as much or more talent; we have the city’s appeal that makes everyone want to live here; we have a unique innovation capacity; we have, as Latins, the ability to improvise in a world that has completely fallen apart. All this means we have all the potential to be the Silicon Valley of Europe. What is missing? The capital market. In recent years, financing has improved tremendously. Now, for the initial phases—seed or pre-series A—it is feasible to find it. However, it remains complicated for scale-ups, where a larger amount of money is needed. Sateliot has invested 25 million euros, an astronomical amount for the country we are in, and now we will close series B, which we hope will be before the end of the year. Capital is one of the pending subjects we have as a country to enter the global world.
The new space economy has grown significantly in Catalonia, partly thanks to Sateliot. What is the state of the local ecosystem?
It is starting worldwide; it is a much less mature sector than video games or biotechnology. We have all the elements to be an essential player, but it is a very capital-intensive industry. The sector will move billions in a few years. The aerospace PERTE could have been more generous: much of the money goes to the ESA and other institutions with which Spain had commitments. All public investments made are welcome, but more are needed. We need a bold, risky step because we have everything to build the sector. We have very well-positioned companies globally, but they need to scale.
Given the strategic nature of many of the solutions in this industry, what role should public capital play?
We must rely on something other than Elon Musk for connectivity, as is happening in Ukraine; in times of crisis, Europe must have its own solutions and understand that it is a strategic sector that needs capital—just like Musk, who has received billions from the US public administration. Resources must be allocated here to have the capacity and influence worldwide.
Has the reception from administrations changed in any way?
It has been spectacular. The Generalitat’s commitment has been very visionary, long before many other institutions. We were lucky that the effect was immediately seen; also because, politically, launching a satellite is very visible. The administrations, first Catalan and then Spanish, had the sector on their radar, and the industry knew how to push the need. The pandemic taught us that we must have our solutions ready because allies will look after theirs before attending to ours.
Why does Catalonia need a space economy strategy?
Governments are major consumers of satellite services, both for telecommunications and Earth observation. In a drought, digitalizing agriculture can save 40% of water, and agriculture consumes between 70 and 80% of any region’s water. Climate change and biodiversity can be controlled much more efficiently from space. It is natural for the public administration to procure such services.
Will we see connection in more areas of the economy?
We see it with the bears of the Pyrenees. Right now, it is possible, but with costly devices with very short-lasting batteries. With the technology we are launching, it is perfectly feasible to monitor all the bears in the Pyrenees at all times. IoT will allow us to monitor everything that happens in the territory at all times.
With the push for the connected vehicle, coverage will be essential in the automotive industry. Are there conversations with OTAs?
We talk to car manufacturers, and they clearly see the need, but in a phase where we are closer to real-time. Conversations are advanced in this regard, but the same thing happens: in the USA, the need is vital because there are thousands of kilometers of roads without any coverage. There are several phases, such as maintenance, SOS, and real-time connected vehicles, which we will eventually reach.
What technological advances do you foresee for a company like Sateliot in the short-medium term?
We are working on two European quantum encryption projects, together with the Institute of Photonic Sciences. These are important projects because satellite security has so far been little observed but will be at the center of attention. In the medium term, we see connectivity not only for IoT but also for mobile telephony. We would all like to see Netflix in the middle of the mountains, but few are willing to pay for the necessary infrastructure. A narrowband solution will solve 90% of the needs of someone in the middle of nowhere. Undoubtedly, a company like ours has a constant investment in technology because, if not, in five years, we are out of the game.
We will end up launching between 100 and 150 satellites a year when we reach production mode; and each quarter, they must be slightly different from the previous ones. We are already at 3GPP, defining 6G, which will completely hybridize terrestrial and non-terrestrial connectivity. Now we do it with difficulties because the technology was not designed for this; but it will be even easier in the future.
How has the perception of Catalonia globally as a technological environment advanced?
Catalonia has made a spectacular evolution, partly thanks to its ability to integrate external talent. The region’s attractiveness makes people want to come here. All this makes Catalonia rich and allows it to export knowledge worldwide. We have world-renowned research centers, making Catalonia’s image highly esteemed, with Barcelona’s reputation being exceptionally strong.
