By Timothy Sanders

May 5th, 2005

Background
Jai Bhagat serves as the Executive Chairman of US Wireless Online the same position he held with Air2Lan which he founded and recently merged with US Wireless Online. Previously Mr. Bhagat was co-founder and CEO of SkyTel communications, Inc. which later merged with MCI. In short, his career has been long and storied. His perspective on the broadband wireless industry is seasoned and prudent. 

Tim Sanders: Please tell us about your recent merger---how it came about and your reasons for the fit making sense.

Jai Bhagat: We have known US Wireless Online for quite some time. In fact we tried to merge about two years ago. However we ultimately felt the time was not right---both companies wanted to build individual value. Late last year (2004) we revisited the idea and it felt right. We were complimentary companies. We felt it would allow us to build scale in both revenue and the economics of cost control and purchasing. We merged as equals We are publicly traded which makes it much easier to do future acquisitions.

Tim Sanders: You mentioned at the recent Broadband Wireless World show that you had acquired a couple of small firms since the merger. Could you tell us a bit about these companies? Also do you plan more acquisitions soon?

Jai Bhagat: Well one of the firms we acquired was Verge Wireless Networks based in Baton Rouge, LA. They have a lot of experience in broadband deployment and have specialized somewhat in homeland security products such as video security products in New Orleans. They are focused on municipal Wi-Fi. They just completed a downtown L.A. Wi-Fi Project. They are a Tropos mesh technology partner.

We also purchased a firm called VoIP Works LLC. We have just installed our soft switch  and rolled out our first VoIP product. There have been a couple of other small companies also. We are looking at several more acquisitions that could happen this year.
 
Tim Sanders: Tell us please what your thoughts are on the economic value of WiMax to a company positioned like yourselves as a largely regional carrier?

Jai Bhagat: Well we believe we are no longer a regional carrier. With service in 11 states we have grown past being a South East regional carrier. We think WiMax will bring manageable CPE cost to the industry. If laptop based WiMax CPE becomes the standard truck rolls should reduce significantly. We anticipate this to be true even for lower power unlicensed band equipment. Ultimately we believe mesh and WiMax and Wi-Fi will be complimentary technologies. 
 
Tim Sanders: Will it significantly change your business strategy to be able to use WiMax gear?

Jai Bhagat: Time will tell. One scenario that could play out is similar to the advent of cellular in the early 1980's when each home had one wireline number and one account. Today cellular has created a multi-account consumer market where basically each member has its own account. The revenue has multiplied as have services. WiMax can do the same in data markets.  As a primarily business-to-business carrier it could allow us to shift toward the consumer market with better cost factors. Currently DSL and cable are fixed technologies---WiMax could leverage a breakout from this competitive constraint much like cellular did with voice.

Tim Sanders: When do you expect to see WiMax gear in the market and how quickly would you begin to adopt WiMax Systems? Would you re-fixture existing markets quickly, for example or update incrementally?

Jai Bhagat: We expect to see WiMax products we could use in late 2005 or early 2006. We don't see replacing existing systems that work well. We would add new markets with WiMax radios and possibly add WiMax radios incrementally in existing cities especially if we get more spectrum. What is important is that we have the supporting infrastructure in place for any changes. In Jackson, MS alone we have 22 towers. We have a network operations center (NOC), relationships with broadband providers, plus a billing system and  back office in place.
 
Tim Sanders: How will WiMax products affect your service on a technical level? What enhancements will it offer to your model from the technical standpoint?

Jai Bhagat: We think it will bring down installation cost by reducing truck rolls (but not eliminating them). If laptops equipped with WiMax radios become commonplace our net CPE cost could fall to nearly nothing. Worst case scenario is having to mount an outside antenna and cable into the house for longer range or unlicensed band circumstances.

The Increased spectrum efficiency of WiMax will offer more bandwidth for less cost which will support the products we believe are key to enhancing average revenue per customer (ARPU). A lot of technology now is not well suited to VoIP or quality of service (QOS) needs. WiMax, we hope, will improve this.
 
Tim Sanders: In your estimation what will be the impact of WiMax on the Broadband Wireless Industry and how quickly will it happen? How important is this emerging standard to the future of the Industry?

Jai Bhagat: WiMax is likely the biggest breakthrough in telecommunications since the advent of cellular in 1982. The overall impact relative to cable, DSL and telco landline data services will compare to that of cellular and landline voice. It could happen very quickly.

Tim Sanders: What if anything will be the biggest holdup to rapid adoption of WiMax gear in the US? Do you think that carrier's reluctance to replace existing networks will slow adoption the most?

Jai Bhagat: The biggest holdup is spectrum. I want to emphasize how important it is that we as an industry work with the FCC to bring more to the table especially the world standard in 3.5 GHz. We need to be part of the global standard in spectrum and with WiMax technology standards. I can't emphasize this enough.

Tim Sanders is founder of TheFinalMile, Inc., a fixed wireless consulting group. His experience came from running a multistate Wireless ISP. He can be reached at tim@thefinalmile.net  or 828-253-0702.