In our most Q4 2021 shareholder letter, CEO Ken Peterman observed that there was a transformative convergence taking place in Comtech’s two areas of undisputed expertise: assured terrestrial and wireless network infrastructures, and satellite and space communications. “Historically,” wrote Ken, “these have been largely independent domains, with different infrastructures, devices, and frequency & bandwidth allocations. But today, as we look to where global communications markets are headed, we see the convergence – everywhere – of global terrestrial and satellite communications networks, and Comtech is well positioned to capitalize on this.” Recently, clear evidence of this convergence – and its importance not only to commerce, but to our fundamental human well-being – was provided by an arguably unexpected sector: agriculture.
Satellite technology has a use case that spans well beyond the realm of telecommunications, and John Deere is proving just that. The 185-year-old agricultural machinery manufacturer is looking to bring its customers an innovative, connected agriculture solution utilizing satellites as a part of their “Always On” line of farming machinery and solutions. Jahmy Hindman, John Deere’s CTO, has identified a market opportunity that would result in 5,000 new machines annually and 40,000 existing machines retrofitted for this first-of-its-kind satellite solution that will ultimately provide famers the extraordinary benefits of modern communications infrastructure.
Satellite Solutions For Rural Areas
John Deere precision farming equipment is presently equipped with 5G, which allows users to collect data in real-time, among other benefits. While 5G signal strength is great in urban and suburban areas, the rural areas where the majority of our farmland is located often lack reliable cellular connectivity for this innovative equipment to function as effectively as possible.
In fact, 5G in its present avatar limited with terrestrial access has never been considered an effective solution for broadband connectivity in rural areas. Experts say it currently lacks both the cost-effectiveness, density, and capacity to do so. Yet the U.S. is made up of 97% rural land, populated by over 60 million people. While that may only be one-in-five Americans, that’s still a staggering number of people that could benefit from “always on” satellite connectivity in lieu of adequate or reliable terrestrial access.
Benefits of Always-on Connectivity
John Deere’s latest innovation – looking to hybridize satellite and terrestrial communications – is just one of the many examples that reinforce the potentially limitless application of satellite technology and its convergence with terrestrial communications infrastructures. Further, always-on connectivity can be applied to a variety of industries, helping them improve their processes and productivity, and most importantly collect critical data – regardless of geography – with limited to no interruptions.
When John Deere first launched their precision agriculture machinery, they expected they were arming their farming customers with much-needed capabilities. And while this would have been true had the machinery operated in urban and suburban areas (or, anywhere with higher-density cellular coverage), it proved problematic in rural areas. More broadly, many modern-day tech innovations and solutions, from cell phones to telehealth services, require reliable cellular connection with good bandwidth to operate properly, yet 20% of the US population does not have the minimum level of connectivity required to make the most of these innovations.
From Comtech’s perspective, it’s not about terrestrial OR satellite. It’s about leveraging both, in tandem, to help keep people connected regardless of where they live. The convergence of this infrastructure has incredible implications, and it’s not theoretical anymore. John Deere is doing it – and we predict many others will follow suit.
As we wrote in our investor letter, “the number of connected devices at the edge is exploding.” Today, this includes not only mobile devices and autonomous vehicles, but the very machinery that feeds the planet. Our modern communications end-markets span well beyond military, police, and government applications. They can and will involve almost every industry, and every person, on the planet as we continue the processes of digitization worldwide, and depend on reliable, always-on connectivity.
It’s about keeping the farmers, who ensure there’s food on our tables, able to remotely operate their machines, able to gather real-time data, and optimize crop yields. It’s about truckers, a critical element of our beleaguered supply chain, being able to seamlessly deliver goods from point A to point B with assured, uninterrupted connectivity. And it’s about any business, good, or service that needs to be connected to partners, customers, employees, communities, and people that may be hundreds – if not thousands – of miles away. Connectivity is not just a convenience, it’s a necessity to everyone, everywhere.
Comtech intends to be at the very heart of this long-term migration toward vast, ubiquitous inter-connectivity: we have the right people, products, and most importantly, expertise, to meet the challenges it will create.