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Polar Power, Inc. and the International Telecom Market


The alphaDIRECT Insight

With more than 5.4 million telecom sites globally, the international telecom market offers a significant opportunity for Polar and the company has been taking steps to accelerate the commercialization of these markets. In our view Polar has some distinct technology advantages over incumbent AC technologies and existing DC suppliers. These include the ability to manage multiple technologies, such as renewables, energy conversion, digital control systems and system integration.  The company has invested heavily in developing this market over the past couple of years and we believe the initiatives could have a positive impact in 2020 and beyond as current product demonstrations are converted into commercial deals. Another feature of the international market is the opportunity to expand revenue per site as Polar offers peripheral services and products to become a more comprehensive supplier to international telecoms. Furthermore, we believe the opportunity isn’t limited to telecom as new product offerings around LPG could help expand Polar into new markets such as residential and commercial.

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Shawn Severson: Thank you, Arthur, for taking the time today to speak with us in our ongoing alphaDIRECT Management Series. The last time that we spoke, we discussed the investments you have made in the business and today we will discuss Polar’s opportunities and strategy in the international telecom markets. Can you begin by helping us understand the size of the international market and what makes Polar competitive in these markets?

Arthur Sams: Thank you, Shawn. The size of the International telecom market for power systems is so large that it is difficult to quantify it in a single measure. For us, small percentages of market share translate in significant revenues. There are more than 5.4 Million cell sites internationally of which 3.7 Million are in Asia and Africa alone. Infrastructure spending for the telecom industry overseas is expected to cross 2 trillion USD over the next 5 years. A significant portion of this cost goes to power / energy infrastructure and network hardening, which in my view, provides superior technology to the incumbent solutions.  Needless to say, the market opportunity for us is very large.

In regard to the competitive environment, Polar Power has the ability to manage multiple technologies including energy conversion, digital control systems, cooling systems, system integration and manufacturing. Most of our competitors are limited to managing one or two technologies in their power solutions. And most of our competitors do not have a full-time staff of R&D engineers; because they do not provide tailored solutions to their customers. Instead, these companies rely on the customer to put together their own tailored systems. I would also note that most customers in telecom are not willing to cover the cost of customizing products so there is limited financial support for R&D. Additionally, managing an R&D group can be expensive and not yield profitable results for inexperienced companies. At Polar, we are unique and have an advantage because our military, industrial and special project work covers a good portion of our R&D costs and enables us to innovate and perfect our technology platform for larger commercial applications including telecom.

Another advantage I believe we have is that we are vertically integrated in our manufacturing process. In my experience there is the tendency of most clean tech and high-tech companies to subcontract their production, leading to them performing light or no assembly. We believe our strategy enables us to reduce production delivery time and product cost.

To summarize, the international market is extremely large, which is why it is important to our future. Furthermore, I believe we possess some distinct advantages over our competition in international markets and we have been working hard to position ourselves to attack this market and leverage our capabilities.