Satellite networking equipment provider Gilat Satellite Networks is looking past the current U.S. government budget turmoil to the day when the U.S. and other militaries are broadband-equipped just about down to the last pair of field binoculars.

On the commercial side, Petah Tikva, Israel-based Gilat is among the principal bidders when governments seek to connect rural communities to the information grid, or provide broadband to those outside terrestrial coverage.

At the same time, the Nasdaq- and Tel Aviv Stock Exchange-traded company is coping with the occasional shift in its shareholder mix. Gilat’s new chief executive, Erez Antebi, discussed the company’s strategy with Space News staff writer Peter B. de Selding.

FIMI, a private-equity investment company based in Israel, recently purchased 11 percent of Gilat. Does that change anything for you?

They are a very well-regarded equity fund. Our board hasn’t changed, management hasn’t changed and the strategy hasn’t changed.

For many private-equity investors, 11 percent is the appetizer, not the full meal.

It could very well be that they will increase their investment. If they do then perhaps something will change. But at this point, we’re not changing anything. The management believes in the direction of the company and we will continue with it. To my mind the investment is a vote of confidence in the company’s direction.

The U.S. Defense Department is a big customer for you. Are you navigating in the dark given the budget uncertainties today?

It is very much an unknown in the short term. In that sense it is tough. But look in the general direction in which this is going — not just in the U.S. but in other nations too. You see a very definite trend in the way command and control is done. There is a clear ambition that you must connect everything through a broadband IP [Internet Protocol] pipe so you can handle logistics and infrastructure much better.

It’s a bit like putting an ERP [enterprise resource planning] system into the military. Military organizations realize they are going to have to start connecting mobile and stationary assets. One way or another, you need them all connected.

The last major change in the way military command and control was conducted on the field of battle was with the invention of wireless radio — the first time commanders could talk, and ask where you are, what do you see. That’s roughly 80 or 100 years ago. Not much has changed since then.

Now, you connect everybody to an IP network. You can know where turrets are placed, where they are pointed and how much ammunition they have. Voice is no longer the main avenue of communications. That is a huge shift, and much, much more efficient.

And this is where Gilat comes in?

It means militaries are going to need IP bandwidth at an unprecedented level, down to the last tactical unit.

Combine that with the fact that most of these units are mobile, and that most deployments are in places where you cannot build terrestrial infrastructure before you come, and you understand there is no real alternative long term to a massive deployment of satellite communications. It starts, and already has started, with special forces, and with UAVs [unmanned aerial vehicles]. But over the next 10, 20 years it is going to disseminate down to the lowest tactical level. That’s a massive deployment. The U.S. Army is going there, and others are going there.

Is Gilat where it needs to be, in terms of assets, to capture that market?

The two major acquisitions that we have made, RaySat and Wavestream, give us technology that is focused on a solution for these issues. Along with that we have the leading technologies in this field at this point in time. The flat antennas that RaySat manufacturers are way ahead of the competition in terms of performance, maturity and their ability to be deployed. We’ve deployed thousands of antennas in the field by now. The unique Wavestream technology means we can build a high-power, solid-state unit in a form factor that is smaller than anybody else can build today. Both of these are major building blocks in our effort to conquer this market.

The U.S. Defense Department’s Wideband Global Satcom (WGS) Ka-band network is going to be 10 satellites. Do you see Ka-band as a big deal for the U.S. military in the short term for the commercial satellite sector?

WGS is a decision they have made and with those satellites there will be the corresponding infrastructure on the ground. Will they use commercial satellites to supplement that or to fill in coverage gaps? My assumption is yes, but Gilat is comfortable working in all these frequencies. The U.S. and other governments will decide what they want to use for a whole variety of reasons that are not necessarily technical. It’s ownership of the satellite versus using commercial capacity; it’s the capacity available over areas they are interested in, and these areas will shift over time. Our job is to be ready with technical solutions in X-band, Ku-band and Ka-band.

Is there a cost difference between building Ka- versus Ku- or X-band?

Once the volume is there they are pretty much the same. If somebody is looking for the first Ka-band terminal to do something, then the cost is going to be higher. But essentially if they say a few hundred or a few thousand terminals in Ku-, Ka-, or X-band, it will end up being a very similar price.

We hear a lot about commercial maritime markets for broadband. How do you see it in terms of Ku-band very small aperture terminals (VSATs) versus Ka-band?

There is a major change in everything having to do with mobility. People and businesses are accustomed to getting broadband everywhere. Yes, there is a lot of L-band still out there, but it simply cannot deliver broadband. Both Ku- and Ka-band can and will deliver broadband. The difference between Ku- and Ka-band to me boils down to the transmission costs.

If you design a satellite that will have similar transmission costs in Ku- and Ka-band because it will have multiple spot beams — for example, look at Intelsat’s recent Epic satellite announcement — then I would say you’re fine. The terminals on the ground could be either Ku- or Ka-band. It doesn’t really matter.

The importance of any commercial application is cost. How much does one megabit per second cost? The satellite provides a transmission. If you want a certain level of service, how much does it cost? Currently Ku-band pricing of geostationary satellites is roughly $3,000 per megahertz per month. If somebody comes along and offers $2,000 or $1,000 or $500, it creates an advantage. By putting up high-throughput satellites with significant capacity, in Ka-band, they lower the transmission costs and come up with that advantage.

Intelsat’s Epic is in Ku-band, at least for the first satellite.

Epic is a good example. But also look at Thaicom’s IPStar, also in Ku-band, and in operation since 2005. It is using Ku-band spot beams and providing very, very low transmission costs, similar to what you are seeing in Ka-band today. So it’s not really the frequency, it’s how you get the transmission costs low enough.

Not everyone has the orbital slots that Intelsat has at its disposal that are free of Ku-band congestion issues.

Yes, they are definitely using their advantages.

Where are you with O3b Networks, which is building a constellation of Ka-band satellites in an unusual equatorial orbit?

We signed an agreement whereby we will be providing Tier 2 terminals to them.

Is O3b a challenge with the tracking antennas that follow the satellites?

It’s just more engineering work. You give engineers a problem, they solve it, and it will work. We see no problems that cannot be overcome.

In Australia, you have a contract for interim terminals — up to 48,000 Ku-band terminals and a contract value of up to $120 million. What happens in 2015 once Australia’s Ka-band system is launched?

The interim project is going very well. We are a bit ahead of schedule and customers are happy. We think we’ll get to the full planned capacity and maybe even more. What will happen in 2015? There are all kinds of scenarios. I think there are going to be opportunities that we cannot see right now.

Your terminals are not compatible with the Ka-band network that’s coming. Changing them for Ka-band is more complicated than changing a light bulb, correct?

Correct, it’s basically a forklift change. Will they change them out? There are so many variables that it’s hard to know. But if we do our job well, then in 2015 we will have close to 50,000 happy customers using our terminals for their broadband service for their homes.

In what way are you are ahead of schedule in Australia — orders, deliveries, customer switch-ons?

The delivery schedule was based on an expectation of how many people would order this service. Australia’s NBN, which is overseeing the broadband deployment, is providing wholesale capacity and services to ISPs [Internet service providers] in Australia. The ISPs market the service to the end users. The plan was based on the expected order rate of consumers ordering through the ISPs. We deliver at the rate they are given orders. If there are more orders we will deliver faster, and right now the orders are exceeding the expectations. The consumer gets a terminal free of charge and pays a monthly service fee.

Rostelecom’s Ka-band network of Russia is not well-known. Is it moving forward?

To the best of my knowledge it is. It is a government program. The government has committed to launching the satellites. RTCom is working with satellite manufacturers. Certainly governments can change their minds but I have no indication of that.

Gilat revenue is now slightly less than half U.S.-based. Latin America is nearly a third, Asia is 15 percent, with Europe and Africa at 6 and 3 percent, respectively. Will this mix shift substantially in the medium term?

Once we get beyond the current budget issues, and given the communications on-the-move requirements and the current programs of record, the U.S. will provide a dominant push to our revenue. In Latin America, Asia, Russia and so on, we will be going after commercial Ka-band programs.

A Ka-band broadband system for Brazil and Latin America is often talked about. Is it coming?

Quite a few companies are looking at Ka-band satellites. The first coming up is Hispasat’s Amazonas 3 in the coming months. It has some Ka-band capacity. But I think there are going to be quite a few of them. We have seen nothing resembling a downturn in Latin America.

Peter B. de Selding was the Paris Bureau Chief for SpaceNews.