LightSquared Plays Up Public Policy Benefits of Planned Wireless, Satellite Network
SAN FRANCISCO -- LightSquared’s satellite coverage will reach residents of remote areas that aren’t economical to serve with terrestrial networks, solving one of the main problems that gave rise to the National Broadband Plan, CEO Sanjiv Ahuja said Monday. And the company’s wholesale-only business will provide an alternative to the wireless industry’s “vertically integrated model” of carriers that, according to a presentation slide, has meant “inflated prices” and a “poor user experience,” he said at the Open Mobile Summit.
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Ahuja acknowledged in Q&A the limitations of satellite connections. “I wouldn’t recommend you download attachments,” he said. “That could get expensive.” But satellite is fine for activities such as checking e-mail and making voice calls, Ahuja said. And the company will have 150,000-200,000 times as much terrestrial as satellite capacity, he said.
LightSquared will have “a flat cost structure that we believe will dramatically lower pricing,” Ahuja said. The company, “at its peak, will probably have less than 500 people” on the payroll, he said. Nokia Siemens, meanwhile, is “mobilizing 3,000 to 4,000” employees to create the network.
"We will never compete with our customers,” Ahuja stressed repeatedly. Answering a question about Clearwire, which has both wholesale and retail WiMAX businesses, he said, “Never will you see a LightSquared store.” Potential customers include cable and electronic gaming companies, in addition to wireless carriers looking to supplement their networks, Ahuja said. “We are several quarters ahead of where we expected to be in terms of customers stepping up and taking our capacity."
LightSquared and network vendor Nokia Siemens Networks will open a Silicon Valley development lab “in the next quarter,” said Hossein Moiin, the vendor’s chief technology officer. He offered little elaboration.
Anthony Melone, the chief technology officer of Verizon Wireless, said LightSquared may not change an already-competitive market much. He said it may mainly offer the current players a choice for adding capacity. CEO Bob Bowman of baseball’s MLB.com said his company doesn’t rule out direct distribution through “something that disintermediates,” like LightSquared, “but AT&T and Verizon have been doing a pretty good job.”
Verizon Wireless doesn’t sound eager to snap up the spectrum that Qualcomm is using for its MediaFLO mobile TV service. The “band looks like its may be available,” Melone said. He called the spectrum “limited.” A carrier needs to be “thoughtful” about its “spectrum portfolio,” Melone said.
Latency of “30 milliseconds or less” will be at least as important a benefit of the carrier’s LTE service, promised this year to parts of 38 U.S. markets with 100 million people and by 2013 to more than 285 million Americans, as the carrier’s “seeing speeds in the 5-12 megabit” per second “range that our customers can expect,” Melone said. The latency is well below the 50 milliseconds “that feels instantaneous” to users, he said.
The low latency will promote long-distance “doctor-patient video interaction” and “real-time video feeds to first responders as they're on their way to emergencies,” Melone said. And gamers “will have a field day” with the short-lag service, he said.
Verizon Wireless is working with vendors “to incorporate a broadcast capability” in LTE, Melone said. It would require dedicated spectrum, but “we do think that will be a solution” to “deal with live content,” he said. Verizon Wireless won’t let current video-service offerings get in the way of any opportunity to offer over-the-top TV as an LTE product, Melone told us. He called the mobile V Cast service just a “value add” and noted that parent Verizon’s FiOS reaches only a small part of the country. “We're not going to let the tail wag the dog,” Melone said. “Video on a mobile device will happen,” Melone told the conference audience. “The wireless environment replaces the wired environment? That’s not going to happen. It’s definitely going to be … complementary."
The keys in LTE pricing will be using technologies that automatically allow savings, such as through “intelligent selection of Wi-Fi” connections where they're available, “without the consumer having to make conscious decisions” and letting customers understand that “what they're doing impacts what they're charged,” Melone said.