Wednesday, November 2, 2011

LightSquared CEO: We want to be the DUMBEST wireless broadband pipe.

Sanjiv Ahuja, CEO of LightSquared

In a keynote address on the opening day of the Open Mobile Summit in San Francisco, Sanjiv Ahuja - CEO of LightSquared, made his case for how his company plans to disrupt the wireless industry with a satellite-terrestrial network and wholesale business model.

Ahuja started by recalling the very beginning of the mobile industry, describing Martin Cooper's first cellphone call in 1973 as a publicity stunt that was intended to convince the FCC to allocate spectrum to private industry. The irony of this assertion apparently went unnoticed by Ahuja, but was probably ill-considered coming at a time when LightSquared is also waiting for FCC approval for their plan to use spectrum in the L-Band, adjacent to GPS frequencies.

The LightSquared CEO went on to compare the current state of mobile broadband to the beginning of the internet, saying that it took Amazon, Facebook and Google to show people that the web was useful, and then eBay and Twitter to "topple decades old dictatorships".

Ahuja then referred to well-known statistics about the growth of mobile data traffic, saying that with smartphones consuming 25X more data and growing at a 50X rate, there are "too many devices and too little capacity", and we are "on track to run out of capacity over the next 2 to 3 years".

The solution, according to Ahuja, is that a  different business model is required, and that - he said - is what LightSquared is trying to do with its 59MHz of spectrum dedicated to terrestrial  and satellite services. 
We want to bring a pure utility, to commoditize it and drive down prices.
Ahuja claimed that his plan to provide network access on a wholesale basis was an advantage, because he would not be competing with his customers who bear the expense of vertical integration. While LightSquared's hybrid satellite and terrestrial network architecture may be different, this wholesale model for providing wireless network capacity is exactly the same as Clearwire, also a 4G provider to Sprint. Clearwire, however, has an advantage with an average of 150MHz of completely terrestrial-based spectrum.

Session moderator Mohan Gyani began the post-presentation Q&A by asking how LightSquared could be successful as a dumb pipe, when other wireless operators are struggling to avoid being relegated to the status of  basic utilities. In response, Ahuja empasized that he wanted to be very clear about this strategy, saying
“We want to be the DUMBEST wireless broadband pipe. I want NO intelligence in our network. None. Zero. I want the intelligence provided by our partners, people who create apps, services, and devices."

This, said Ahuja, is an opportunity to disrupt the model that has existed ,"to upset the incumbents". Since LightSquared partner Sprint would be considered one of those incumbents, and LightSquared has no plan to offer their service directly to consumers, this confrontational posturing versus the incumbents is questionable.

During a demonstration at the Verizon Application Innovation Center in San Francisco,
the wireless operator showed how new network APIs can be used by application developers
to access resources to optimize transmission of video.

While LightSquared may have no desire to build intelligence into their network, delivery to consumers requires that someone will. The LightSquared keynote address came just a day after Verizon Wireless put on a press tour of their new Application Innovation Center In San Francisco. In one of the demonstrations, Verizon showed how a new network API would enable an application developer to access network resources that could be used to optimize video transmission. By not building such intelligence into their network LightSquared may be able to keep their operating costs lower, but that just means that responsibility for assuring Quality of Service (QoS) will fall to their customers, with the cost passed on down the line to consumers.

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