David Gelerman CEO, Chairman, Advantech Wireless Broadband

David Gelerman did not set out to serve the satellite sector when he founded Advantech in 1988, but more than 20 years later, he has positioned the Canadian company as one of the leading suppliers of communications network components and solutions for broadband connectivity, broadcast solutions and backhaul requirements.

Gelerman emigrated from the Soviet Union to Canada in 1981 and spent seven years at Nortel Networks before striking out on his own. “I was manager of product development at Nortel, and at the time, an executive told me, ‘Don’t bring us any opportunity unless they are worth $100 million.’ I knew there was a lot of business below $100 million, and this is what I started doing. I didn’t know what I would be doing, but I knew how to design and build microwave components and had the knowledge and expertise that could be applied to satellite technology.”

Gelerman did not launch the business with a target market in mind, but using his experience in microwave products and solid state amplifiers, he developed product lines for the satellite sector. “This was a time when the satellite industry decided to embrace solid state technology, and little-by-little we were drawn into satellite sector by our potential customers.”

Gelerman discusses the evolution of Advantech’s business and product lines and where the satellite sector is leading him next.

Via Satellite: How has Advantech’s product line evolved?

Gelerman: We have moved from simply having a microwave specialty to a total solutions company. We provide everything from transceivers to antenna tracking controls to antennas. We provide VSAT networks, high capacity throughput in TDMA. We are a completely different company that is, in essence, a one stop-shop for most of our customers. A lot of our customers still associate us with microwave components, but six months ago we changed our image and branded ourselves as Advantech Wireless. We want customers to think not just about microwave components but total solutions.

Via Satellite: What drove this change?

Gelerman: Most of the ideas come from the customers. They have a problem such as they need more throughput, more efficiency, less consumption. We try to leverage our knowledge and see what we need to change with our products or develop new products. We just launched a line of block-up converters for use in flyaway and manpack applications because we are continuously improving our technology and our own processes.

Via Satellite: What impact have acquisitions had on Advantech’s business?

Gelerman: We acquired nine companies in the last eight years in the United States, Canada and Europe. It is faster to acquire than to develop technology from scratch, especially if you have a vision for market direction and where it is going to reach at a certain point in time. Sometimes we buy opportunistically, but sometimes we target companies that complement us. In 2005, we acquired SpaceBridge Semiconductor Corp. They were producing VSAT terminals and at the time were the largest producers of DVB-RCS terminals. The problem was they were making the terminals and somebody else was making the rest of the chain, and they were at the bottom of the chain. If you are not controlling both ends of the stick, then you are at the short end. We started to understand where we were going and what to do to prosper. We started development and put a plan in place and budgeted $6 million and two-and-a-half to three years to finish development. Then in 2006, EMS said they would sell their Satellite Networks division, and we saw it as great opportunity.

Via Satellite: Do you plan more acquisitions or do you have enough in-house capability to focus on organic growth?

Gelerman: You need to have both to grow, and that’s what we did with Satellite Networks (EMS). Once you have acquired companies, a year later, in most cases, we got increased sales. I would say 50 percent came from organic growth and 50 percent from acquisitions. But to acquire companies is not easy. There are different cultures, and quite often, people will look at you like invaders. That is a normal feeling. You have to work hard to combine and make everyone feel like one company and one product for customers.

Acquisitions are always an opportunity, and if there are ones that make sense, we will continue to be a consolidator, but we need to find good opportunities. But I also believe we possess all the necessary technologies in house to develop products.

Via Satellite: How has the economic slowdown impacted your business?

Gelerman: The slowdown has been noticed and a shift in priorities is already on course. Our main concerns remain customer satisfaction and our ability to continue to bring them cutting edge and cost effective products. This prompted us to carefully review our internal processes, which resulted in a series of improvements that also provide additional benefits for our clients.

Via Satellite: What regions are driving growth in the VSAT market?

Gelerman: VSAT technology continues to evolve, becoming more and more sophisticated, powerful enough to compete with traditional satellite solutions and in many cases with terrestrial infrastructure, particularly broadcast applications. Being an international company, we leverage our presence abroad as market fluctuations arise. Presently; demand from BRIC (Brazil, Russia, India and China) countries continues to rise.

Via Satellite: How is the advent of hybrid communications affecting your business?

Gelerman: We are well positioned for hybrid satellites such as Amazonas 2, and our solutions include successful and simultaneous operation on both traditional bentpipe transponders and on-board-processing payloads for mesh applications through satellite due to compatibility of our VSAT terminals and hubs equipment with both.

Via Satellite: How is the growth of IP-based communications affecting you?

Gelerman: Our company determined that future developments will move towards the IP domain, therefore, we developed a series of integrated solutions, based on powerful routers, supporting quality of service, MPLS, OSPF, additional applications, encapsulators and performance enhancements proxies applications. We combine all existing interfaces like serial RS-530, V.35 PDH (T1/E1, T3/E3), SDH/SONET (OC-1, STS-3), ASI MPEG TS HSSI and can transmit them simultaneously encapsulated in IP. We call it “Everything-over-IP.” Also, with built in quality of service adaptive coding and modulation (ACM) is ideally suited for IP application.

Via Satellite: What products are most in demand today?

Gelerman: The highest demand is presently coming from high-end, standard-based (DVB-RCS) VSAT products and related RF equipment.

Via Satellite: What applications will drive your business in the future?

Gelerman: IP-based and video applications for the military and broadcast, while our incremental business will be driven by ISPs. In regards to improving instant bandwidth utilization, we rely on our TDMA/FDMA combined solution which provides superior efficiency. Increased integration of micro-hubs, improved IP-related product features and incorporation of encryption will allow us to target new market segments. Improvements of return satellite access schemes and ACM capability in the return links will bring the SCPC and TDMA markets together, enabling our customers to address both market segments with a single Hub platform.