Altaeros takes cell service to new heights
You’ll usually see blimps hovering over stadiums. But a Somerville startup called Altaeros wants to float them over isolated rural areas, as a quick, cheap way to build out the world’s wireless voice and data networks.
Altaeros makes the SuperTower, a helium-filled airship equipped with a pod of cellular antennas and tethered by cables about 800 feet off the ground. The company says the radio signals from one SuperTower have a range of more than 35 miles over flat terrain, taking the place of 15 land-based cell towers. According to Altaeros, the SuperTower system would slash the cost of delivering wireless service by 60 percent.
Since its founding in 2010, Altaeros has raised $14.5 million in venture funding from serious backers, including the Japanese heavyweights SoftBank and Mitsubishi Heavy Industries.
Altaeros’s original business plan was to sell clean energy, not wireless communications; the 100-foot-long blimps were supposed to contain wind turbines that would convert high-altitude winds into electricity and transmit the power to the electrical grid.
Chief executive and cofounder Ben Glass, who holds a master’s degree in aeronautical engineering from the Massachusetts Institute of Technology, said the turbine idea made sense as long as the price of fossil fuels stayed high. But fuel prices plummeted, and the flying wind farm concept fell to earth.
So Glass went to Plan B. While demand for wireless data was surging, the high cost of delivering service to rural areas was keeping millions of people offline. Building cell towers was a major expense, especially since so many would be needed.
The higher elevation of a blimp-borne antenna “essentially allows the signal to propagate farther, gets above the buildings and trees and all the other clutter,” Glass said. That way, a single blimp could do the work of many land-based towers.
“It’s a much quicker and much less expensive approach to providing service to rural markets,” Glass said.
Altaeros isn’t the only lighter-than-air telecom venture. Alphabet Inc., the parent company of Google, has been working on a similar idea since 2008. Its Loon service uses untethered radio-equipped balloons, designed to ride as high as 60,000 feet up in the sky, and relay messages to each other and to the ground below, creating a low-cost worldwide digital network. Alphabet has signed a contract with the African phone company Telkom Kenya to deliver Loon service to inaccessible parts of Kenya, starting this year.
But unlike the Loon system, SuperTowers are tethered to the ground with cables that also deliver electric power and connect the antennas to telecom lines. The tethers are designed to withstand winds of up to 100 miles per hour. In some places, the weather gets even more extreme, such as in “Tornado Alley” in the Midwest. But Glass said the blimps can be winched to the ground during extreme weather and relaunched after a storm has passed. It all happens automatically, with no need for human supervision, further reducing operating costs.
Still, tethered blimps can’t always be trusted. A military surveillance airship designed by the Waltham defense contractor Raytheon became a national joke in 2015 when it broke loose from a Maryland military base during a test. The blimp drifted for 150 miles, winding up in Pennsylvania, where its dangling tether hit power lines and knocked out electrical power to 35,000 residents.
So far, Altaeros’s SuperTower has stayed put. The company recently completed a field test in New Hampshire and is now seeking customers. It plans to market SuperTower as a service, with Altaeros collecting fees for operating the blimps on behalf of the cellular carriers.
“We’ve seen really a tremendous amount of interest,” said Glass, whose company will be going up against firms that specialize in building and operating traditional cell towers, including American Tower, of Boston.
Clayton Funk, managing director at MVP Capital, an investment banking firm specializing in telecom companies, said Altaeros makes sense as a niche product. “I don’t see thousands of them,” Funk said. But, he added, “it is absolutely going to have a place in the ecosystem.”
Funk predicted that companies will use the blimps to deliver emergency communications services after a natural disaster has taken out cell towers or in rugged regions where constructing a tower would be unusually difficult.
Glass, though, argues that vast regions of the United States are underserved because low population density — say, around 100 people per square mile – makes it cost-prohibitive to build a network of cell towers. But just one SuperTower can cover up to 3,800 square miles. With that kind of coverage, cellular companies could make money in rural areas they’ve previously neglected.
”All of a sudden they’ll be quite interested,” Glass said. “If they can make a profit, they’ll be interested.”