LightSquared CEO: Demand for data will outweight spectrum capacity soon

SAN FRANCISCO -- We are in the midst of the next great evolution of the mobile industry, according to Sanjiv Ahuja, chairman and CEO of LightSquared. But that evolution is also tied to a major disparity between demand for data and the amount of available spectrum.

"We have too many devices and too few airwaves," said Ahuja while speaking at the Open Mobile Summit on Wednesday. "The result is we're on track to run out of network capacity over the next two to three years."

It's not just about providing more spectrum but also bringing mobile broadband to more people, Ahuja asserted. Additionally, he argued that the United States is "not ready to deal with this coming gap in demand and supply," leaving major current problems like job creation at stake.

"We don't know where this will lead us, but we know it will change consumer behavior," Ahuja said.

Information, entertainment, communications, and business have been totally transformed, Ahuja said, but it has taken consumers awhile to notice this until the last few years.

Looking back on how the mobile industry has evolved, espeically from the consumer point of view, Ahuja posited that "it won't be long before consumers look at today's iPads and Kindles" with the same sense of amusement that we look at giant cell phones from the early 1990s.

"It wasn't really until we saw the Amazons, Facebooks and Googles come along and consumers saw how the technology could really be used," Ahuja asserted.

Take Twitter, for example. Ahuja remarked that a couple years ago, people dismissed it as a way to update where you're eating for lunch. But he argued its unexpected influence and power considering Twitter has actually helped to enable people to topple over decade-long dictatorships.

What consumers are looking for in terms of communications is now coming to and impacting the mobile world, Ahuja said, adding that tablets in particular are responding to some needs, but the market for it isn't entirely understood yet.

"We still don't know what consumers and businesses will do with mobile broadband," Ahuja said, asking if younger mobile users even use their phones for talking anymore.

Today half of tablets are sold in North America, Ahuja said. But he doesn't think that will be the case in 2012.

But as sales for smartphones and tablets are expected to skyrocket in the immediate future, and the recurring prediction that we will see between 25 billion and 50 billion Internet connected devices by 2020, this problem between the amount of data spectrum available and the demand for it is going to hit us harder and faster than most people would expect.

So what is LightSquared's plan? It's business model is focused on providing network access on a wholesale basis. The core expenses go to building an open LTE network, deploying it, and then selling it to network partners that will resell the spectrum themsleves.

Essentially, that means that LightSquared will never compete with its cusotmers -- retail distribuition partners like Sprint, BestBuy and others.

Touching on an initiative by President Obama seeking to bring mobile broadband access to at least 98 percent of Americans, Ahuja said concordantly that broadband can and must serve as a foundation for infrastructure investment and enduring job creation.

Ahuja concluded, "They don't just impact us in the mobile industry but also the economic future of the United States, and even the world."