AI and Satellite Broadband Seen as Top Areas for Wireless Investors

The current technology market is easy to characterize, Mark Bagley, managing director at Woodside Capital Partners, said during a Wireless Communications Association webinar Thursday. “What’s hot” is AI and generative AI “and what isn’t hot is whatever is not gen-AI -- that’s where we are at this stage.” The wireless sector is becoming more interesting for investors, partly because of SpaceX’s push to put more satellites into low earth orbit, offering satellite broadband with much lower latency than the two or three seconds users experienced in the past, he said. The latency and bandwidth from satellites means a service that offers more than just data, “which is what we thought it was going to be.” Venture capitalists are also interested in federal programs like BEAD and are investing, Bagley said. Carrier assumptions about 5G were wrong, he said: “They expected that everyone would be using continuously” 200 Mbps “or some ridiculous amount. That has not been the case.” Henry Huang, investment director at Micron Ventures, said he’s not very interested in investing in 5G. “If there’s anything related to wireless that’s interesting it’s going to be in the sky,” Huang said. “LEO is a big thing.” One big change for satellite is a tenfold reduction in launch costs, he noted. “You are able to launch a smaller satellite at a lower altitude and those satellites are much cheaper than the previous ones” and use “off-the-shelf components." SpaceX’s Starlink “is obviously the leader here, but there are a bunch of startups coming up.” The challenge will be trying to compete with the big players like Starlink and Amazon's Kuiper, but some smaller players will likely benefit from federal spending programs or may target the IoT rather than broadband consumers, he said. Huang mentioned he predicted three years ago that millimeter-wave frequencies would be increasingly important for U.S. carriers, but he was wrong. “If there is spectrum available at lower frequencies, then its propagation characteristics are just way better” and it doesn’t make sense to use mmW in satellite or terrestrial networks. High-band could still “take off” but that will take a long time because deployment costs are so high. There “could be opportunities in 5G, but it’s going to be in some large, emerging economies, for example, India.” Said Laura Swan, managing partner at Silicon Catalyst Ventures, five years ago investors got into 5G and that market remains slow. “How do we get data from the satellites?” For a country like India, the cost of fiber deployment is “too high” and fixed wireless access offers an alternative. “We have started to see" an opportunity in FWA, “but as we have seen with all 5G, is it actually going to take hold?” Lisa Oshima, managing consultant at Socialize Mobilize, said, the “really flashy stuff,” like launching satellites, is “always sexy and cool.” Getting data speeds on the ground “is really complicated.” Yet it seems "like some of the boring tech … is actually becoming important to the way the world is evolving.”