Gogo's CEO Oakleigh Thorne said Thursday the company will delay the launch of its planned 5G network from this year to 2022 due to problems stemming from the global chipset shortage.
The company declined to provide details, including which of its vendors might be impacted by the situation. Nonetheless, the development directly ties ongoing global chipset shortages directly to the 5G industry.
Optical networking company Infinera already has signaled that chipset shortages will cost it up to $10 million over the next three months. Infinera is one of the world's leading providers of silicon and technology for core telecom networking. The company's products generally sit inside the fiber networks that crisscross the world, carrying the bulk of the Internet's traffic.
In response to the issue, President Joe Biden signed an executive order last month meant to address the shortages. They have affected industries ranging from medical supplies to electric vehicles.
However, his order won't have an immediate impact as it instead calls for ways to bolster the supply of chipsets for US companies, including potentially increasing domestic production of chipsets.
In a related development, Samsung is now considering four sites in the US for a new $17 billion chipset manufacturing plant, according to new reports.
Gogo, for its part, announced in 2019 that it would construct a 5G network in order to supply in-flight Wi-Fi to airline passengers.
The company plans to upgrade its 250 cell towers to 5G using AirSpan's virtualized RAN basestation technology, a "proprietary modem," and massive MIMO antennas. Those will transmit in the unlicensed 2.4GHz band to plane-mounted antennas made by First RF. The radio access network will be supported by Cisco's software-defined core network.
Gogo says the price tag for all this will be about $100 million.
In its quarterly earnings report this week, Gogo said it expects to spend up to $30 million in capital expenses in 2021, mostly due to its 5G efforts.
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