TOKYO -- A Singapore government arm has invested in Transcelestial, a local startup developing low-cost networking equipment, as the race for 5G rollout intensifies across Asia.
Founded in 2016, Transcelestial is developing devices that use laser technology to send data to each other, rather than fiber optic cables. The company says the devices, which are about the size of a shoe box and mounted on poles or cell towers, are easier to set up and more affordable than laying fiber in a city.
The cost of rolling out 5G telecom infrastructure is considered a major challenge for network operators. 5G requires a dense network of base stations because it uses radio waves that do not travel as far as 4G. Rohit Jha, Transcelestial co-founder and CEO, said its product could make it up to 90% cheaper per kilometer for telecoms operators to deploy fiber in the 5G network.
Transcelestial has conducted trials with South Korea's SK Telecom as well as carriers in Southeast Asia. Bad weather conditions have been a key bottleneck in the adoption of laser technology, but the company said its devices work under heavy rain and thick haze.
The $9.6 million funding was led by Singapore's EDBI, the investment arm of the government's Economic Development Board, and venture capital firm Wavemaker Partners. Airbus Ventures, the venture capital arm of European aircraft maker Airbus, also participated, along with other new and existing investors. Transcelestial said it will use the proceeds to ramp up production of its devices.
The deal signals Singapore's ambitions to nurture homegrown telecommunications technology at a time when political concerns over Huawei Technologies, the leading Chinese telecom equipment maker embroiled in the U.S.-China trade war, are growing.
The Japanese government recently committed about 70 billion yen ($650 million) to local equipment makers, including NEC and Fujitsu, to develop 5G and post 5G technology.