K4 Mobility’s Highly Disruptive New Business Model

Serving the maritime VSAT market has always been expensive and challenging. Locked in by inflexible long-term contracts with satellite operators and facing huge CAPEX and operating costs, maritime VSAT integrators are struggling to survive in a market rife with over-capacity and cut throat pricing. Here, duplication of assets and personnel costs is squeezing margins, and there is talk of integrator consolidation and vertical integration with satellite operators. In the midst of this economic chaos, K4 Mobility, an innovative, new entrepreneurial company, is seizing on an opportunity to disrupt the traditional maritime VSAT Value Chain Started in August of 2018 by former Gogo CEO, Michael Small, and CTO, Anand Chari, the company has raised $5 Million and now has 15 employees. In less than one year, K4 has developed the first all-digital, multi-net work platform and is already deploying it in the maritime VSAT market , starting with yachts. Leveraging the recent availability of operator managed services platforms that sell megabits and adding SD-WAN-like intelligence, K4 Mobility has created a service devoid of the capital and operating costs of teleport and NOC infrastructure.

In doing so, it has also avoided the long-term transponder leases characteristic of the existing business model. While existing integrators have considered buying megabits via the managed service model, for the most part , they resisted and continue to purchase megahertz. This approach enabled them to secure more megabits per/ MHz and thereby increase margins and also customize their service offerings. Of course, the downside of this model is the cost of CAPEX for teleport and NOC infrastructure, as well as the ongoing expense of manpower needed to manage the infrastructure. The K4 model, in comparison, relies on the purchase of megabits of capacity on the spot market , and deploying capacity when and where needed, allowing for services to be delivered at the lowest possible price – assuming, of course, that HTS prices continue their downward spiral. Using a Smartphone application, the K4 Mobility platform users adjust service parameters to their liking, and proprietary SD-WAN-like algorithms automatically select the best available network. Through proprietary optimization software, not only can the network intelligently switch between different providers, it also provides owners with secure, fine-grained control over all data usage on their vessel. For the first time, a complete picture of data usage, cost, and performance can be seen from a smart phone – all without the user picking up the phone to call the service provider. In addition, real-time and proactive notifications will alert users when new devices have connected to the network or are using too much data. Further enhancing the offering is a secure messaging platform that enables IoT applications and person to person communications

The Initial target for the service is the yacht industry, vessels 80 feet in length and larger. The platform is complete, and the company already has its first customer, a yacht using a combination of VSAT and LTE. To jump-start sales, K4 has hired two very experienced salespeople from the yacht industry, and in the future, plans to sell through a network of distributors as well. While the yacht market is an ideal testing ground, it’s easy to see that the applicability of the business model is much wider, given its inescapable economic advantages and ease of use. Once proven, it could disrupt significant segments of other VSAT mobility markets and deliver services at price points and at levels of convenience far superior to current offerings. Given these unique advantages, K4 Mobility is definitely a company to be watched.

K4 Mobility whose mission is to build and operate a secure digital platform to harness the power of the internet for maritime, with an inspiring, clear, and convenient technology path for cutting-edge performance now and in the future has hired two industry veterans to join the K4 team. Darryl Matfin and Mark Theissen have joined K4 as Directors of Sales, to serve customers in the Miami and Ft. Lauderdale area.

A seasoned business development professional, Darryl has held leadership roles in top organizations and has demonstrated continuous sales growth in the marine industry. Using his extensive knowledge and understanding of consumer behavior, Darryl’s vast network of connections as well as his successful track record have made him an authority in the marine industry. As such, Darryl brings a unique 360-degree perspective to developing new marine business opportunities for K4 Mobility.

Mark Theissen is a Massachusetts Maritime Academy graduate and has an international business & sailing background that he has been marrying with his passion for technology. Having lived in Germany, Croatia & USA, he loves bringing the world closer together whether in person, through industry efforts or technology. He has been an avid industry advocate holding board, committee and advisory positions with Marine Industry Association of South Florida and Young Professionals in Yachting (YPY). As director of K4 he is responsible for all aspects of growing the digital services and communication business units enabling our clients to harness the power of digitization through simple, reliable and powerful solutions. He is a proud father and loves spending his free time with family and friends on the water or in the mountains.

We welcome both Darryl and Mark to the K4 Mobility team and look forward to our expansion in the Florida region.

Highlighting Disruptive, New, Mobility-Focused Satellite Ventures and Technologies

How K4 Mobility Will Disrupt the Maritime VSAT Market

K4 Mobility: A Virtual Network Operator (VNO) with AI-driven, multi-network selection capability

Since 2018, K4 Mobility, a start-up founded by former Gogo CEO Michael Small and CTO Anand Chari, have built a company devoid of traditional infrastructure. Leveraging opera or managed services and Artificial Intelligence, they built a remarkable new maritime VSAT platform. Unburdened by the need to own and manage teleports and network operations centers, K4 can deliver optimal network performance at a cost significantly below traditional maritime VSAT integrators. Launched into the yacht market and already in use by over thirty vessels, their platform has the potential to disrupt the entire maritime VSAT market from yacht s to cargo to cruise vessels. To find out more about t his innovative new service, we met with K4 Mobility CEO and Founder, Michael Small, and co-Founder and President, Anand Chari.

SMW: We last wrote a brief article about K4 in November of 2019. Since we last spoke, can you update us on your progress? Have you secured additional funding, added employees, and customers?M Michael Small

(MS): A lot of changes have occurred since you last interviewed me in Nov of 2019. Despite the COVID epidemic, we added a chief technical officer and two R&D engineers and have grown the India development team by about 50%. Our customer base has also grown dramatically. We now have over thirty yacht s and our first commercial shipping customer. When we last spoke, we were still on software release 1.0. Now, we are on release 4.0. In terms of funding, in the spring, we raised an additional $2.5 million. In total, we have raised over $8 million, mostly from friends, family, and one VC fund, Hyde Park Venture Partners. Hyde Park participated in the original $5 million raise in 2019 and the raise t his year.

SMW: I understand that K4 is an AI-based all-digital, multi-network VNO. To help us better understand your business model and how the service functions, can you contrast it with a typical maritime satellite integrator such as Omni Access, e3, Marlink, etc.?

(MS): By way of analogy, I would describe us as Amazon and the competitors you mentioned as brick and mortar retailers. We don’t have long-term satellite contract s, and we don’t invest in data centers or teleports, and other physical infrastructure. We’re a Virtual Network Operator (VNO) with h AI-driven, multi-network selection capability. Our AI-driven automated network selection capability is the core feature of our solution. Unlike the simple map-based beam switching solutions incorporated into satellite modems, it takes cost and many other criteria into consideration. Our highly sophisticated set of algorithms select the most cost-efficient and highest quality network based on the customer’s requirement’s – in real-time, all managed by a user-friendly smartphone interface.Using an all-digital infrastructure, we manage customer acquisition, service sign-up, bill payment, and processing. That allows us to operate with minimal staff and gives us a lower cost st ruct ure t han compet it ors. Besides, we?re not burdened wit h long-t erm legacy sat ellit e capacity contracts – all advantages that make us very price competitive, around 20% less than our competitors.

SMW: From a User’s standpoint, how are you different?

MS: Let me give you some examples: The user doesn’t sign a long-term contract. They manage their service through a smartphone application (K4’s Katalyst App) and can monitor network performance. Here are a few functions they can perform:-Upgrade and downgrade bandwidth on the fly-Adjust network selection criteria to their specification -Configure individual networks and device settings usage parameters for the crew, guests, or other groups. Specify what net works each group can access, e.g. limit L-Band to business only usage In both yachting and commercial shipping, the ability to adjust bandwidth and manage access is highly prized as usage patterns vary depending on passenger load, crew size, or whether the owner is onboard. In commercial shipping, managing crew access is a critical concern. Wit h K4, the user is always in control.

SMW: What criteria do your algorithms consider in choosing the appropriate network? Can users modify the criteria on their own?

Anand Chari (AC): Our AI-driven platform is much more sophisticated than the simple beam switching capabilities incorporated into most satellite modems. For example, a conventional modem would likely select the satellite with the best signal strength even though it is loaded to near capacity. In that case, our AI platform would choose a satellite with the second-best signal strength because it has a much lighter loading. Additionally, our platform examines historical data analytics and takes latency, jitter, network congestion, and blockages into account when making the network selection. It takes all of the relevant factors into consideration and chooses the right network instantly. Given the number of complex factors to consider when choosing a satellite network, it’s easier to see why an AI solution is preferable to human int invention. However, if you have unique network selection criteria, our web-based Connection Wizard offers advanced users the ability to tailor the switching criteria to their specific preferences.

SMW: A key element of your business is the use of multiple satellite networks. To enjoy the benefits of multiple network connectivity, don’t your customers need multiple modems and antennas onboard?

MS: We have designed a multi-SIM select or card that is independent of the LTE modems. Using software algorithms, our AI-enabled routing algorithms select the appropriate SIM at the right time, based on the location, cost, and network performance.

SMW: Both yachts and commercial cargo vessels have small numbers of passengers and crew. It’s easy to understand how your smartphone app and AI-driven network selection would be attractive in these environments. In cruise, however, we are dealing with a highly sophisticated and well-staffed IT infrastructure. Will your solution for the cruise market as well?M S: Of course, there is a significant difference in scale between yachting, commercial shipping, and cruise. While yacht s have a small crew and a few passengers, cargo ships have a t went y-five-man crew, and cruise ships have thousands of crew members and passengers. To serve a diversity of ships with different numbers of crew and passengers, we built our software to be scalable. It ?s virtualized and it’s modular, which means you can run it on any hardware. You could serve a few or a thousand users and run it on small or some very powerful servers and achieve high redundancy and load balancing capability. Initially, however, we are not targeting the cruise ship market, although we believe the software could automate satellite network management and reduce the number of IT crew required. In t he future, I think our real opportunity in the cruise industry will be with the coming of LEO and M EO constellations. In t hose environment s, we will give our customers a real choice in terms of network selection and make it easy for them to choose what satellite and terrestrial links to use. We will also enable channel bonding, which will enable the creation of high-speed, highly redundant services. Our channel bonding and traffic balancing capabilities are dynamic and intelligent and work with VSAT as well as terrestrial connections. As 5G get s rolled out, we will bring a lot more options to the cruise companies than what they have today.

SMW: Does the K4 platform support the use of pre-paid cards?

(AC) Not yet. However, our system has a payment gateway capability. Already, we have a system that can set quotas and control bandwidth availability. Soon, we will support multiple payment methods allowing the use of coupons, credit cards, scratch cards, and many other payment methods. All of these capabilities are on our roadmap. Although not a priority for our yacht market, we will be coming up with these features shortly, especially as we expand into the commercial shipping segment.

SMW: Will you provide access to the Cloud?

(AC): While our satellite operator partners have cloud connectivity, we also have a small data center presence with Cloud connectivity to t the U.S. Internet. Because customers want access to the U.S. version of Netflix no matter where they are global, we need to provide them access to the U.S. Internet backbone.

SMW: IoT is becoming an increasingly important component of connectivity services, especially in both commercial shipping and cruise. Supporting IoT functionality requires that sensor data be gathered onboard and transmitted to the Cloud. Traditional satellite integrators are already partnering with companies like Kongsberg, which offer onboard sensor data aggregation. Are such partnerships on your roadmap?

(AC): In our view, the IoT market consist s of four component s. First of all, you have to be able to talk to all of the sensors on the LAN side, authenticate them, gather the data and allow them to use the pipe to send data to the Cloud. So, you have to integrate the sensors, which can operate under different protocols. Next, the IoT data can be run across a sliver of a broadband pipe or a low-power IoT network known as an LP WAN. Thirdly, you need a Cloud-based platform that can securely store and organize data from all of the devices, and finally, the application that integrates the data for end-user or enterprise needs. Presently, we are looking at the wide-area network protocols that apply to the IoT space and IoT capabilities. Within the next 12 months, we are planning to incorporate an IoT solution into our K4 platform, giving the platform an even more comprehensive range of applications, especially in market s that are IoT data intensive.

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