Ovzon CEO Details How Ovzon 3 Launch Will Boost its Satcom-as-Service Offering

Ovzon CEO Per Norén spoke with Via Satellite about how the Ovzon 3 satellite will “revolutionize” the company’s Satcom-as-a-Service offering. Photo: Ovzon

Ovzon, a mobile satellite communications solutions company, is preparing for the launch of its Ovzon 3 satellite, a major milestone for the company. Ovzon CEO Per Norén spoke with Via Satellite about how the satellite will “revolutionize” its Satcom-as-a-Service offering, an end-to-end managed service that combines satellite capacity with its mobile terminals.

In this interview, Norén shares the company’s plans to build revenues, deepen its relationships with customers like the U.S. government, and grow its Satcom-as-a-Service offering.

VIA SATELLITE: 2022 is set to be a big year for Ovzon with the launch of its Ovzon 3 satellite. Can you give us an update about the launch and what the significance of this will be for the company?

Norén: 2022 will be a phenomenal year. Ovzon 3 is truly a unique capability that has never been more relevant than today. We are looking forward to welcoming what we believe is a very disruptive capability into our core service and solutions. We are working closely with our production partner, Maxar, and making progress in finalizing the satellite and getting ready to launch sometime toward the end of the year. 

You might wonder why a company like Ovzon, which is already delivering high-quality Satcom-as-a-Service, would build and launch its own satellites? The answer comes from our mission to revolutionize mobile broadband by delivering the highest data rates to the smallest mobile terminals. While our service today certainly sets that standard, there are no other satellites in orbit or in production that can truly revolutionize the industry and provide the performance, agility, and resiliency that Ovzon 3 brings to the market. Ovzon 3 will also enable new generations of even smaller satellite terminals, providing even greater levels of mobility.

Ovzon 3 will be an entirely new class of communications satellite with five powerful steerable spot beams that provide unmatched RF [radio frequency] performance. This means much greater efficiencies: more bits per hertz, more mobile satellite terminals per network, and, just as importantly, a lower RF signature. Finally, one of the key components of Ovzon 3 is the Ovzon On-Board Processor, which is a proprietary software-enabled communications platform integrated on the satellite and providing a space-based mesh network. 

Rendering of the Ovzon 3 satellite. Photo: Ovzon

VIA SATELLITE: What is your expectation in terms of revenue growth this year and next year once the Ovzon 3 satellite is fully operational?

Norén: 2021 was a very strong year for Ovzon. We almost doubled our order backlog and expanded our business and customer base significantly. We expanded outside of our core customer base, defense customers, by offering Ovzon Satcom-as-a-Service on a dedicated, fully steerable beam to the Italian Fire and Rescue service. We are now strongly positioned in two very important customer segments. That, coupled with our other customer service agreements, means that our service revenue is going steadily up. We concluded a record first quarter 2022 when it comes to revenue. We had almost 100 million SEK (Swedish krona) ($10 million) in Q1, compared to 191 million SEK ($19 million) in revenue for all of 2021. We are clearly on the right track to profitability. 

We made a strategic investment two years ago to secure satellite capacity for some very capable steerable spot beams; roughly one third of that capacity remains unsold, which is what has kept us from profitability in Q1. We will continue to grow and manage the business and stay true to our high quality core service, Ovzon Satcom-as-a-Service. It will deliver profitability.

VIA SATELLITE: Do you think the Russian invasion of Ukraine will lead to more heavy investment from governments in military capability? How do you think Ovzon will be impacted by current geopolitical events?

Norén: What is happening in Ukraine is appalling. The world is holding its breath in hopes of a quick end to the violence but also watching the bravery and determination of the Ukrainian people in awe. I believe the Russian invasion of Ukraine will significantly impact defense spending in most European countries and countries around the world. If you look at the most recent reports, there is a new security order in the Western world, and we believe this will increase the demand for Ovzon’s Satcom-as-a-Service in the coming quarters and years. We are involved in strategic discussions around this. 

Clearly, there will be a greater need for performance driven, highly mobile satellite communications solutions.

Perhaps most important is to acknowledge that the ‘contested environment’ against a capable threat that western military strategists and environmental analysts have anticipated for so many years is now upon us. We have evidence of this in the recent cyber-attacks on deployed tactical satcom systems in Ukraine and other parts of Europe. Fortunately, the Ovzon 3 satellite’s On-Board-Processor brings exactly the capabilities needed to continue operations in a highly contested environment. It was specifically designed for resiliency in such environments, and it will have a very significant impact for NATO and allied security operations. 

Ovzon 3’s On-Board Processor acts as a mesh network in space, allowing remote satellite terminals to continue to operate independently of a teleport. It connects remote terminals directly to each other and provides a level of resiliency that does not exist today. Ovzon 3’s RF performance is so high that any mobile satellite terminal will have the capacity to act as a temporary gateway, we refer to this as a ‘hasty teleport,’ to provide continued access to the internet and services when traditional teleport services are interrupted or unavailable. 

VIA SATELLITE: Outside of the United Kingdom’s Ministry of Defence and United States Department of Defense, what do you expect the deal flow to be like for government business over the next 12 to 18 months?

Norén: In terms of deal flow, the game changer for us was winning a major expansion in our support to the Italian Fire and Rescue Service. It started with a smaller installation that they used during the floods in Europe one and a half years ago. That led to a decision to grow the Ovzon network into their enterprise solution, with a great expansion in the size of the network that we are proud to say is supporting their vital life-saving mission today. The new network consists of a full steerable spot beam, mobile satellite terminals, and a 24/7 service and support for all of their regions. It opens a whole new market of emergency service and public safety and rescue for us. 

We will of course continue to work very closely with the U.S. DoD and we believe we have an opportunity to expand our service to other organizations than those we serve today. We are also serving the U.K. MoD. We believe there is an opportunity to continue to grow with other MoDs within Europe as well. I think if you look at Europe with the Ukraine situation, both from a NATO perspective, as well as individual countries, I believe there are business opportunities based on our strong and relevant solutions and our reference customers.

We have also had some success in working with the United Nations, such as the humanitarian missions we are currently supporting in Colombia. We provided a critical solution and helped out in areas where infrastructure was not available. The Colombian government has now bought Ovzon Satcom-as-a-Service to support their upcoming presidential election. 

VIA SATELLITE: What does your Satcom-as-a-Service concept mean to customers? How will you expand on this concept over the coming years?

Norén: We control the technical design, development, and performance of the mobile satellite terminals. We acquire high-powered leased steerable satellite capacity today, and we integrated this capability into a managed network for global reach. On top of that, we will add our own superstar satellite, Ovzon 3. The third leg of our stool is to manage this integrated solution with 24/7 global support and services. Managing an end-to-end Satcom-as-a-Service solution is very critical to us.

Competitors provide something similar, but if you look at that, they are either mobile satellite terminal providers or satellite operators that sell capacity. That is different from being an integrated customer-focused service provider, with an end-to-end service specifically designed for performance, agility and resiliency. This is what makes us unique and what our customers have come to expect from us today and in the future.

You will see continued innovation from Ovzon based on focused customer requirements and technology push for the smallest mobile satellite terminals, high transmit data rates, and continued operations in an increasingly hostile cyber environment. We will continue to push the envelope and lead the industry in innovation. 

The Ovzon T6 terminal. Photo: Ovzon

VIA SATELLITE: Could you tell us about the benefits of your Ovzon T6 terminal? What are your plans to develop new terminals?

Norén: Historically, Ovzon’s foundation was on the basis of designing, developing, and delivering an end-to-end solution based on industry’s smallest and best-performing mobile satellite terminals. The main benefit of the Ovzon T6 terminal is that it can transmit and receive significantly higher data rates than any competing solution. It is smaller and lighter, it is more rugged and easier to use. It is truly mobile.

Terminal design has a significant impact on the end-to-end service, so we continue to lead the development of small broadband satellite terminals. In 2021 we did a step-change in our industrialization efforts which has led to the ability to produce significantly more terminals today than ever before, and we can adjust and scale fast. If you look at other service providers, they have a line-up of up to five various terminals from five different providers. We control our destiny because we can guarantee quality in all parts of the service delivered and our value chain. 

VIA SATELLITE: How do you view the revenue mix between government and commercial customers for your services?

Norén: It will definitely change over time, and we are here to play the long game. I believe we are uniquely positioned for government and defense. We are also uniquely positioned for emergency and rescue and public safety, and this falls into the global government market as well. We are very selective and thoughtful in designing solutions for customers with demanding requirements and critical missions. That said, the mix will come, as there is a need for commercial applications of what we do as well. Whether that is within aviation, maritime, oil and gas, or media and broadcasting, we can apply the same technology and service. We will continue to build and grow our strength in our core markets and expand from there. We are not closing doors to other markets, but we have to take one step at a time. We are also developing a strategic portfolio of applications that requires small and light terminals and is in need of effective bandwidth. Digitization, content and user experience are driving the needs for this and we are actively pursuing that with customers and partners.

VIA SATELLITE: Will the company need further financing in the next 12 to 18 months?

Norén: Not for the moment. We have enough positive cash flow coming in from the current business. We are nearing the launch of Ovzon 3, which then means we have even more control of our own destiny. If we want to do a major expansion, we may have to consider it, but with our current way of driving profitable growth, selling, developing, delivering, and operating we don’t need a financial injection at this point in time. 

VIA SATELLITE: As the CEO, what do you see as the No. 1 challenge that Ovzon needs to overcome to be successful?

Norén: We are a strong premium service provider delivering a unique, high-end Satcom-as-a-Service solution. We are obviously smaller than mega satellite operators. I view that as an advantage for us because we can move faster, be more nimble and agile. The hurdle is really winning government and customers’ trust as a smaller company compared to the more traditional companies. I find that sometimes size is a safety blanket and size sometimes matters. On the other hand, we have not seen that as a barrier in the last few years. Rather the opposite — being able to deliver on the needs fast with the highest quality is what really matters to customers. This was also very apparent to me in discussions we had at SATELLITE 2022 in Washington. The big companies will likely continue to make strategic acquisitions, vertically and horizontally, but the fast-growing smaller companies that are more agile, and resilient are the ones delivering new technology innovations and progressive business models. We deliver our services on time with precision, and with new business models which are more in line with what the government, defense and commercial contracting entities need today.

I think there are more hurdles for some of the bigger companies to do so because it is not easy for them to suddenly be more agile in their approach. I got several positive comments that there are several smaller companies to watch as they are rocking the boat with new innovative technologies and business models. We are encouraged that we are tagged as being one of them. We really need to use our premium unique approach and value proposition to stay ahead and continue to win the customers’ and the market’s trust. 

VIA SATELLITE: Finally, what is your long-term vision for Ovzon? How would you like to position the company over the course of this decade?

Norén: We clearly have a platform on which to grow from where we are today. Our business models are geared toward the right ROI in today’s environment. I know we have the staff, competence, skills, and leadership in order to succeed. We have a very strong partner network. Last but not least, we are extraordinarily close with our customers, and we really understand their needs and deliver on them. We will never let go of that. We are in the right premium service provider segment in this industry. We are a trusted partner with our customers, and have a great core offering that we can continue to build upon. My vision for the company is that Ovzon becomes the de facto standard for Satcom-as-a-Service for organizations with critical missions and demanding requirements. I know we are, and we will continue to revolutionize mobile satellite communication with our Satcom-as-a-Service offering in any industry we choose to serve.