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Betting on Platform Shifts
And why communications infrastructure is at the precipice of an explosion of innovation
American Tower Company is one of the biggest communications companies you've never heard of. $75B Market Cap, founded less than 30 years ago. Without them, Verizon, AT&T, and T-Mobile don't exist. After acquiring an initial network of microwave telephone relay towers, the company made a large bet on the future of communications moving to mobile, and began retrofitting their tower network to support the exploding cell phone coverage demand. Turns out they were VERY right, and today they own and operate over 225,000 cell towers, by far the largest network in the world.
What’s the moral of the story? Being right with new technology-enabled infrastructure at the inflection point of a major platform shift can bring HUGE returns.
One of the potential platform shifts we see is the move from cell towers to satellite communications. Astranis recently released a great video on how satellite communications have the potential to be cheaper than cell tower communications. I think they might be right. We’re seeing an explosion of innovation in satellite communications, with SpaceX’s Starlink leading the way, and recently announcing new innovations like direct to cell. There are novel sub-systems that will enable this—things like Mynaric’s laser communication hardware, AnySignal’s RF platform, or Kymeta’s user terminals. Innovations in this area are going to be significant in the next five years, and our view is there will be multiple winners.
For consumers, this shift means a few things:
Always-on connectivity, available anywhere you can set up a user terminal (the dream DirecTV had years ago, but finally realized!).
Autonomous cars finally becoming a reality, with high speed satellite internet solving automakers’ latency issues.
No more cell towers in the woods of your kid’s favorite playground :)
We’re excited for the next decade of innovation to come on the back of this, and are excited to back more founders building in this space!