In pivoting to space, Rivada continues to court controversy

Declan Ganley, of Rivada Networks, is no stranger to controversy. The latest: Chinese investors who claim that Rivada's LEO plans are built on top of assets the company doesn't actually own.

Mike Dano, Editorial Director, 5G & Mobile Strategies

April 27, 2022

4 Min Read
In pivoting to space, Rivada continues to court controversy

Rivada Networks unveiled plans last month to launch up to 600 low Earth orbit (LEO) satellites. The company intends to provide global Internet services at speeds "similar or better" than those provided by fiber networks on the ground.

But new reports indicate that Rivada's plans have been complicated by a group of Chinese investors who claim that Rivada's LEO plans are built on top of assets that the company doesn't actually own.

Rivada's founder, Irish businessman Declan Ganley, remains unfazed. He has argued that Rivada can pursue its LEO ambitions despite the legal attack.

Ganley is no stranger to controversy. For example, he recently sued Ireland's health ministry over coronavirus regulations that prevented him from attending church services. Shortly before that, he backed a lobbying campaign in the US designed to convince former President Trump to use Rivada's technology to release more spectrum for 5G. That campaign culminated in a meeting between Rivada lobbyist and investor Karl Rove, a longtime Republican operative, and Trump in the White House's Oval Office. The effort was not successful. "Our nation can do much better," Trump said later of Rivada's proposal.

Facing challenges

Rivada's newest project to launch LEO satellites challenging providers like OneWeb, Starlink, Amazon and others is the company's latest strategic pivot. Rivada was founded almost two decades ago and rose to prominence in the US with a bid to build FirstNet's nationwide broadband network for public-safety workers. However, Rivada was ultimately barred from the FirstNet contract process due to a "substantial number of significant weaknesses and deficiencies" in its proposal, according to the Department of Interior. AT&T ended up winning the FirstNet contract.

But Rivada's telecom ambitions aren't restricted to the US and space. The company has reportedly pursued a role in wholesale wireless network operations in countries ranging from Iraq to Mexico, Chile and Jamaica.

According to Rivada spokesperson Brian Carney, the company has not been successful in any of those efforts so far and has not managed any commercial wireless networks during its corporate history. However, he argued that the company's management team includes several experienced networking executives who could do so. They include former Sprint executives Peter Campbell, Keith Cowan and Doug Lynn, as well as Joe Titlebaum, who previously helped launch Sirius XM.

"We have long argued that most spectrum-allocation processes are tilted in favor of the large incumbents, who often enjoy disproportionate influence when the rules are set for how spectrum is made available for commercial use," Carney wrote in response to questions from Light Reading. "I'd say that the challenges we've faced acquiring spectrum to bring our technology to market serves to confirm the truth of that."

Nonetheless, Rivada's Ganley told the Irish Times that part of the reason the company managed to secure an entry into the LEO industry is because of Rivada's "ability to execute." Ganley explained that Rivada's LEO efforts stem in part from the company's new deal with a Liechtenstein investor named Michael Frommelt. Rivada acquired Frommelt's 85% stake in Trion Space, which Rivada said owns the international rights to conduct satellite operations across 4GHz of the Ka spectrum band.

Investors vs. investors

However, according to a lengthy SpaceNews article, those spectrum ownership rights are at the center of a legal dispute between the European and Chinese investors of a German satellite startup called Kleo Connect.

Figure 1: (Source: NASA) (Source: NASA)

According to the publication, Rivada purchased EightyLEO, a European investment vehicle with a minority stake in Kleo Connect. Ganley told SpaceNews that Rivada managed to take the Ka spectrum rights away from Kleo's majority Chinese shareholders by buying Frommelt's share in Trion Space.

Although Ganley has made a purchase offer to Kleo's Chinese shareholders, he does not expect that they will let Rivada buy them out. He anticipates "a whirlpool of litigation for years," but said "it is amputated from the rest of" the company's constellation plans.

"From an investor standpoint, from our shareholders' standpoint, the focus is on execution and getting the Rivada Space Networks operational and constellation operating, and that amputated situation is not going to affect that … it can't," he told SpaceNews.

Ganley, who founded Internet provider Broadnet in the 1990s, continues to believe that Rivada will be able to raise the billions of dollars necessary to launch hundreds of satellites into space. In addition to Rove, Peter Thiel is another notable Rivada investor. Thiel is an entrepreneur, political activist and early investor in Meta (formerly Facebook).

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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