|
Straight Path Communications Inc. |
|
|
|
|
August 24, 2015 Issue |
||
|
The Most Powerful Name In Corporate News and Information |
|||
|
Leading the Way in Spectrum for Mobile Service |
|||
|
CEO & President
Straight Path Communications Inc. (NYSE-MKT:STRP)
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – August 24, 2015
CEOCFO: Mr. Jonas, would you tell us the focus of Straight Path Communications? Mr. Jonas: The prime focus of Straight Path Communications is to build value in our spectrum assets by creating more dynamic opportunities to use the spectrum. We are pushing to allow for use of our spectrum for mobile services, which is a greater use case than fixed wireless and therefore creates substantially greater value in the assets.
CEOCFO: How does this work? Mr. Jonas: There are three to four different things that need to happen. The regulatory environment, particularly the Federal Communications Commission would need to recognize mobility as a proper use for 39 gigahertz spectrum--to propose and then adopt rules to govern mobility at 39 gigahertz. Secondly, the standard setting bodies such as 3GPP would need to set standards that take into account higher frequencies such as 39 gigahertz. Third, the technology being developed by the OEM’s such as Samsung, Ericsson and others, would be compatible with our 39 gigahertz band. Fourth, once all the above boxes are checked off, it would actually be creating deployment scenarios where it would make sense for carriers to deploy next generation 5G systems running on our spectrum in their mobile networks.
CEOCFO: What are some of the challenges along the way, which you have a plan to conquer? Mr. Jonas: Technology development for one; then there’s the regulatory process and the standard setting—both are conversations that will likely take years, a lot of deal brokering, negotiating, and trying to satisfy the desires of important stake holders. The best way for us to meet the challenges ahead is to make sure that we create opportunities for other stakeholders to recognize the value created by pushing the ball forward.
CEOCFO: What is happening at Straight Path today? Mr. Jonas: In terms of short-term horizons, we are focused on greater revenue bearing usage of the spectrum that is already permitted based on fixed wireless rules that govern our spectrum, namely moving from point-to-point systems to point-to-multi point systems where there is better cost for customers and better revenue models for us. We are working on small cells and small cell backhaul, which can work in a point-to-point, or point-to-multi point environment. We are confident that point-to-multi point is a better solution for small cells and that we can play a part in helping to grow and catalyze that industry.
CEOCFO: Would you explain what point-to-point means? Mr. Jonas: Point-to-point is where you have dedicated technology at whatever site you are transmitting from and dedicated technology at the receiving site. With every additional customer a service provider using point-to-point has to keep putting up additional radios at both ends of the link. Point-to-multi point is where you have one hub radio that sits on a critical location that would cover a big economic or population area. You could cover thirty degrees or ninety degrees and maybe go out a mile or three miles depending on the quality of service you are looking to achieve. In that sector of thirty or ninety degrees or more, you could put multiple customers from that one radio. Instead of six radios for three customers, you could have four radios for three customers because the one sector would serve those three customers. If you had six customers in a point-to-point environment, you would be talking twelve radios and the costs keep ramping up where as in a point-to-multi point environment you are only talking about seven radios. As you scale, you get better return on investment for the network. For us it is a better opportunity because we can only charge a small fee for a point-to-point, whereas for a sector where we are leasing a wider area, we charge a premium--probably charge five to seven times what we would charge off one point-to-point link. Any customer who is using point-to-multi point is automatically six to seven times more valuable than someone who is ordering a point-to-point.
CEOCFO: Why would someone not want point-to-multipoint if it is better? Mr. Jonas: There are situations where point-to-point is more effective. If for instance you need to send a very large amount of data, a more focused link with one endpoint can achieve greater throughput.
CEOCFO: Are you concerned about new upcoming technology to supplant what you have or is this the only way? Mr. Jonas: The theoretical possibility of some technology that would supplant our spectrum and use case and business case is a speculative cause of concern. Due to the glacial pace of the industry transformative technology cannot be adopted overnight. If such a technology were coming, it would take years or decades until it would be recognized.
CEOCFO: The tagline on your site is Connecting People with Integrity. Where does the integrity come in? Mr. Jonas: One is I wanted our company to stand for transparency and to be a source of integrity in the public market. I want our investors to feel confident and comfortable with the direction and management of Straight Path. That was part of the mission--to connect people with integrity by being persons of integrity ourselves. Our team is a tremendous example of integrity in the professional sphere. In terms of our spectrum, we wanted to make sure that we are developing technology that will connect people with integrity and what we meant by integrity there was high quality.
CEOCFO: What did you learn about what to do and not to do at IDT, that has been the most helpful as you are running Straight Path? Mr. Jonas: At IDT I learned quite a bit. I was born and raised in the halls of IDT. My father was the founder and has served as the Chairman over the last twenty to thirty years. It impacted me growing up around it. Certainly the message of integrity in the work space and integrity in the personal space and trying to blend those two together is something that I learned at home and in the halls of IDT. IDT is also a fiscally conservative environment and appreciation for not squandering money and not recklessly spending and making sure that we give ourselves the greatest likelihood of success by even being careful about the small things because it will teach us to be careful about the bigger things. IDT is a very creative place. The story of IDT is the story of evolution and continually finding new opportunities, new ways to use what they have and to find new horizons to explore. My father started out in brochures and somehow ended up in long distance telecom and then phone cards and then mobile top-up and somehow they ended up in the energy business along the way and developed the largest ESCO on the east coast, which was spun off as part of Genie Energy. Oil exploration, patent litigation, wireless spectrum…the list goes on. Constant creativity and evolutionary entrepreneurship is something we strive for at Straight Path and we were heavily influenced by being part of IDT and we are thankful for that.
CEOCFO: Why pay attention to Straight Path Communications today? Mr. Jonas: Straight Path is the future of wireless spectrum. Straight Path is relatively unknown, and therefore undervalued by orders of magnitude. Spectrum is generally valued by what is called a megahertz-pop calculation. We look at the number of people that are covered by the spectrum and how many megahertz of frequency you have to cover that given population. Our megahertz POP is the single largest of any company in the entire USA. We cover about 250 billion megahertz POP, which is equivalent to essentially all current mobile spectrum combined. Granted all spectrums are not created equal. Value correlates with utility. If spectrum can be used for mobility, the value of that spectrum is orders of magnitude greater than spectrum that can only be used for fixed services, because the addressable market is orders of magnitude greater. Right now our spectrum is valued at about 10% of one penny per megahertz-pop. The spectrum that most recently sold at the FCC AWS-3 auction went for an average of $2.71 per megahertz-pop. That is about a 2700x differential. Even with many appropriate discount factors, our company is terribly undervalued. There has only been positive movement in terms of our story and the strides that we are making to improve our chances of enhancing the value for our spectrum, realizing the true value for our shareholders. |
“There has only been positive movement in terms of our story and the strides that we are making to improve our chances of enhancing the value for our spectrum, realizing the true value for our shareholders.” - Davidi Jonas
Straight Path Communications Inc. (NYSE-MKT:STRP)
Yonatan Cantor 804-433-1523 Yonatan.cantor@straightpath.com
|
||
|
|
|||
|
|
|||
|
Wireless Spectrum, Straight Path Communications Inc., Technology Companies, CEO Interviews 2015, Davidi Jonas, Leading the Way in Spectrum for Mobile Service, megahertz-pop calculation, 39 gigahertz band for mobile carriers, deploy next generation 5G systems running on spectrum for mobile networks, Recent CEO Interviews, spectrum that works in small cells and small cell backhaul, point-to-point, or point-to-multi point environment, single largest megahertz POP in the United States, wireless spectrum company that covers 250 billion megahertz POP, equivalent to all current mobile spectrum combined, Straight Path Communications Inc. Press Releases, News, Tech Stock, Companies looking for venture capital, Angel Investors, private companies looking for investors, technology companies seeking investors, wireless spectrum companies needing investment capital |
|||
|
|
|||
Davidi
Jonas