Avanti: Profitting from a giant leap in data use

 
Philip Salter
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ON THE wall in the meeting room of Avanti’s London offices – just off Shoreditch high street – hangs a piece of A4 paper in a simple frame. There, in plain text, Avanti’s mission is set out: “To be the world leader in Ka band satcoms, make lots of money and have some fun.”

Avanti Communications is a wholesale telecoms service provider. Perhaps this doesn’t sound as exciting as the Tech City start-ups that neighbour this Aim-listed company, but this presumption would be a mistake. While the timid kids of Silicon roundabout have their feet firmly on the ground, Avanti is boldly sending satellites up to space.

David Williams, alongside David Bestwick, founded Avanti Communications in 2002. Williams wanted to be a rock-and-roll star at university, but when these dreams died he found himself needing a job. From the back office of an investment bank he rose through the ranks until he was helping secure capital for telecoms and media companies. In the 1990s, there were plenty of other companies who were looking to do what Avanti are now doing, but Williams got frustrated trying to develop strategies to fund these businesses. The big corporations “chickened out” as they lacked the risk appetite. Williams thought: “I believe in this market, I’ll do it myself.”

“Bestwick is the real brains of this operation – he is the astrophysicist who came up with the technology. He had the foresight to know why we need to remain flexible and why we need to design the satellite the way we do,” says Williams. “He and I are diametrically opposed in our skill sets and our characteristics and our personalities. And we work perfectly together.”

Avanti’s international telecoms network currently consists of two satellites and four ground stations, providing very high-speed two-way data services in about 56 countries across Europe, the Middle East and Africa. Differentiating your company from the competition is key for any business. For Avanti, this comes through the frequency at which it deals with data. Williams explains that your iPhone runs on three gigahertz, while BSkyB is using around 17 gigahertz. Avanti’s satellites run on 30 gigahertz. When he set about trying to get funding for a Ka band satellite back in 2002 “people thought we were completely insane” for operating at this higher frequency band. “There was only one guy in the US doing it and they thought he was mad too.” He is one of one of Williams’s best friends and sold Hughes Communications last year for over $1bn.

Williams thinks “the world’s demand for data will keep rising by 25 per cent a year for the next 20 years”. But he doesn’t affect any pretence of knowledge beyond this. He says “we cannot accurately forecast what the data market will be doing in five years time, let alone 20 years time. And it takes four years to build a satellite and it then lasts 15 or 16 years.” He admits: “I did not predict the iPhone, the iPad, Twitter, YouTube – I didn’t predict any of those things and I was a technology investment banker for 10 years before I did this. So we cannot predict the direction and momentum of travel of data usage – all we know is at the moment about half of the world’s population has absolutely no access to high-speed data; and we also know that with every year that passes, those people that do have access to high-speed data experience an almost doubling of their throughput demand.”

Because Williams doesn’t know which regions will experience high growth and which type of devices will cause this high growth to come from, he needs to be as flexible as possible – so that wherever the business is to be found, he can respond to it. This is why he builds satellites where he has the power to “turn off all of our European beams and put all the capacity into Africa.” But when you put on components that offer bespoke services you have to take mass off. It typically means you get less capacity: “We choose to have more flexibility and the cost of less capacity and that’s because we think driving down the cost to the very lowest is not what makes your shareholders a better return. Time will tell.”

Williams credits his staff with Avant’s success. He is proud of the work environment he has built, and his key piece advice for those looking to start their own business is: “You shouldn’t think of being an entrepreneur as going it alone. If you do, you are making a mistake. An entrepreneur needs good advice, needs friends and needs partnerships.”

CV DAVID WILLIAMS
Company name: Avanti Communications

Founded: 2002

Company turnover: £17m

Number of staff: 175

Job title: Chief executive

Age: 43

Born: Cardiff

Lives: Sussex

Studied: Economics & Politics

Drinking: Anything with diet in the title (sadly)

Currently Reading: Slow Finance, Gervais Williams

Favourite business book: The Art of War

Motto: Always have a Plan B

Talents: Playing guitar

Heroes: Margaret Thatcher and Rupert Murdoch

First ambition: To go to the moon