Japanese Consortium Commits $100 Million to AALTO HAPS

Japanese Consortium Commits $100 Million to AALTO HAPS
by Riko Seibo
Tokyo, Japan (SPX) Jun 04, 2024

A consortium of Japanese businesses led by NTT DOCOMO, Inc. and Space Compass Corporation, with Mizuho Bank Limited and the Development Bank of Japan Inc., has committed to invest $100 million in AALTO HAPS Limited. The investment will be made through the Japanese Consortium's investment vehicle, HAPS JAPAN Corporation.

This investment marks the start of a strategic alliance to commercialize connectivity and earth observation services using HAPS in Japan and across Asia. It will also support the industrial and commercial roadmap for AALTO's services, targeting launch in Japan and a global entry-into-service in 2026.

Flying for months at a time in the stratosphere, Zephyr offers capabilities that will be transformative for mobile connectivity and earth observation. As a payload agnostic platform, Zephyr can provide low latency 5G direct-to-device mobile connectivity services. Leveraging Airbus's earth observation service, Strat-Observer, Zephyr can also be used for monitoring, tracking, sensing, and detection applications. AALTO is therefore positioned for various use cases, such as expanding mobile network operator coverage and providing high-capacity connectivity during Japan's response to natural disasters.

This investment deepens the collaboration between AALTO, NTT DOCOMO, and Space Compass, a joint venture between NTT and SKY Perfect JSAT focusing on establishing a Space Integrated Computing Network. The roadmap to commercialize HAPS began with an agreement to explore collaboration with AALTO signed in 2022. Alongside this investment, AALTO and Space Compass will also sign commercial agreements to deepen their engagement in Japan and Asia over the coming years.

Airbus Defence and Space will remain AALTO's majority shareholder. The investment is subject to closing conditions and regulatory approvals.

Takaaki Sato, Chief Technology Officer of NTT DOCOMO, said: "NTT DOCOMO continues to improve network quality and has been focused on establishing new technology frontiers that enhance access to connectivity services. Working with our partners Space Compass, AALTO, and Airbus, we are excited by the potential of HAPS-based NTN solutions. This technology brings together unique cutting-edge engineering with economics that are aligned to expand coverage to rural and remote areas, and support our collective response to natural disasters."

Shigehiro Hori, Co-Chief Executive Officer of Space Compass Corporation, commented: "Non-terrestrial networks have the potential to transform Japan's communications ecosystem, addressing access to connectivity in hard-to-reach areas while supporting our country's response to emergencies. Japan has many remote islands and mountainous areas, where there are uneconomic connectivity solutions. Our strategic relationship with AALTO, underpinned by technological innovation and the opportunity of the connectivity market, will help us build a new telecommunications infrastructure in these areas and during an era of population decline."

Koichiro Matsufuji, Co-Chief Executive Officer of Space Compass Corporation, added: "As the leading HAPS technology of its kind, Zephyr is a unique capability that we will leverage over the coming years. We want to create a successful use case in Japan and expand it to Asia."

Jean-Brice Dumont, Head of Air Power at Airbus Defence and Space and Chair of the AALTO Board of Directors, commented: "After a decade of stewardship by Airbus Defence and Space, Zephyr has established itself as a leading HAPS platform in the world. Zephyr plays a key role in the space and defence ecosystem, addressing commercial and government sectors from the stratosphere. With the creation of a dedicated HAPS Services Business in 2022, AALTO has been propelled to a global leadership position in the industry."

Samer Halawi, Chief Executive Officer of AALTO, said: "This is a landmark investment for AALTO. It is the natural next step in the roadmap of the Company's targeted entry-into-service in 2026, as we industrialize and commercialize our technology. With world leaders in aviation and connectivity as shareholders, AALTO now has the combination of technological expertise and global reach to capitalize on the growth opportunities in substantial total addressable markets across connectivity and earth observation.

"This investment comes as AALTO moves into its next phase of development. This includes launching several customer missions over the coming year, establishing launch and landing sites for Zephyr, and advancing our certification process. We are excited to forge a new frontier in sustainable connectivity and earth observation from the stratosphere, while generating significant value for all our stakeholders."