
Chamath Palihapitya Launches Rama Corp to compete with AT&T and Verizon - prostoalex
http://www.businessinsider.com/chamath-palihipitya-launches-verizon-competitor-rama-corporation-2015-11?op=1
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salimmadjd
I can fly to Riga, Latvia or many other places. Pay $5 for a SIM card (with
some amount of base call/data credit) and use it when I want or need it. But
in US you are charged if you use or don't use your service. Basically it's
like your electric or water meter running even if you use electricity or not.
I hope Chamath will be able to solve that. Have a network like other places in
the world. Where I buy a SIM card and fill it up when I need it and if I don't
use my phone for a week, I won't be charged when not using it.

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stanleydrew
We should talk. I'm working on a product that pretty much exactly matches what
you described. And I've used the infinitely-running electric meter analogy in
the past to point out how the current market offerings don't make sense.

Would love to have you try it out when it's ready. Send me an email if
interested (in my profile).

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salimmadjd
@stanleydrew email sent!

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jamiek88
I really hope this isn't just a 'plausible enough' cover for someone to take
advantage of the absence of the big two in an auction, sit on it for 5 years
and then sell on in a hopefully (to them) different regulatory environment
stating that they really need the investment and weight of an existing player
to use the spectrum properly.

They aren't perfect by any means but I'd much rather see DISH or t-mobile get
this for reasonable pricing with the proviso that roll out happens in x amount
of time.

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paragpatelone
I am sure he may have something up his sleeve. But how exactly is Rama going
to compete, are they going to acquire real infrastructure or build cell sites?
It will be pretty costly to build something from the ground up or to acquire
customers from Verizon or AT&T, just ask T-mobile and Sprint.

Unless they have some game changing wireless technology than I don't see it
happening and investors may as well put their money down a black hole.

BI says "Part of his plan involves installing microcells in customer's homes
to blanket the nation, but also making it as easy as buying a cellphone to
sign up for it. Another key to the plan is a portfolio of zero-rated apps that
won't cut into your data, Palihapitiya said."

^That does not sound like a very good plan. Carriers like AT&T and T-mobile
already have microcell options, and most people won't opt for it especially if
other people get use the microcell at the cost of the person's personal
bandwidth with their ISP.

What is Zero-rated apps? Isn't it similar to what T-mobile is already doing
with their video and audio streaming; whitelisting Apps that will not count
against data. Most carriers also have WIFI calling.

That auction that he wants to participate in, isn't that for low band spectrum
like 600Mhz. That is good of extending coverage but will not increase your
download speeds. Carriers like to have both low band and high band.

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maxsilver
> What is Zero-rated apps? Isn't it similar to what T-mobile is already doing
> with their video and audio streaming; whitelisting Apps that will not count
> against data.

Yes. And here's Susan Crawford explaining why Zero Rating is bad -
[https://medium.com/backchannel/less-than-
zero-199bcb05a868](https://medium.com/backchannel/less-than-zero-199bcb05a868)

~~~
paragpatelone
Yea so Chamath is not doing anything that is innovative. Carriers are already
doing it.

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mdasen
The article is light on the details, but it seems to refer to the opportunity
presented by the auction of 600MHz spectrum in 2016. The FCC has set aside
30MHz of spectrum for smaller carriers that don't have so much sub-1GHz
spectrum. This is important because low-frequency spectrum travels farther and
allows carriers to create broad, reliable coverage. In most markets, this will
mean that Verizon, AT&T, or both will be excluded from bidding on that 30MHz.

But it would hardly help him "overtake" AT&T and Verizon with no network and
probably only 10-20MHz of spectrum, possibly missing large markets like New
York and San Francisco entirely due to the high price licenses in those
markets fetch.

The auction is generally seen as most beneficial to T-Mobile who has a
network, but lacks low-frequency spectrum in a lot of markets.

There have been many companies that have dreamed of entering the US wireless
business. Many have bought spectrum only to let it languish for years and then
sell it to an incumbent carrier. Looking at 700MHz-A licenses, a lot of them
are owned by companies such as "C700-Salt Lake City-A LLC",
"C700-Jacksonville-A LLC", "Cavalier Louisville, LLC", and "Cavalier Albany
NY, LLC". Part of the issue is that it is expensive to build out a wireless
carrier requiring lots of money and consumers demand a high level of
perfection when it comes to their wireless carriers. The American market isn't
one that tolerates even small carrier issues.

Some of it will depend on what licenses go for. I think most people are
expecting licenses to run T-Mobile in the range of a couple billion given the
30MHz set aside, but T-Mobile is planning for up to $10B. Verizon just paid
around $10B for around 10MHz of AWS-3 spectrum and the 600MHz licenses are a
lot more valuable. But 30MHz is set aside with less competition from the big
two.

Given that the licenses will likely cost $2B+ and cap-ex can often run $3-8B
per year for carriers, $4-10B seems a little low to launch a compelling
service. Part of the issue with the US is that it's such an expansive place
and people don't want to be told "this service is only available in Maryland,
DC, and Northern Virginia".

I guess the question is: what does he think he can do better. If it's cost, I
can get 2-5GB of data with unlimited talk and text from Boost for $30/mo,
taxes and fees included, on Sprint's nationwide network. His network will be
worse than Sprint's so how much of a discount can he offer off $30 to make a
much worse, completely new network compelling? He won't have loads of spectrum
to offer really high data caps. And if he starts offering 100GB for $25, that
will have to come down fast as people start actually using it and the network
becomes capacity constrained. And customers are very used to being
grandfathered into plans in wireless. If he were just competing against AT&T
and Verizon, he might have an opening. But even AT&T has their Cricket brand
where I can get 2.5GB for $35, taxes and fees included, on AT&T's network.

The question is: what does his entry bring to the scene? It seems unlikely
that he can greatly undercut prices. It seems unlikely that microcells in
people's homes will "blanket the nation". With so little spectrum compared to
competitors, he won't be able to offer the speed and capacity they're
offering. Without a reliable network, customers will want a steep discount to
move to his service. So, how much below $30/mo can he go to grab customers? Is
there something else compelling? T-Mobile already offers microcells for your
home and zero-rates music and now video streaming.

I'm all for increasing competition. It just seems unlikely that this will
increase competition. It seems way more likely that Dish will buy some 600MHz
licenses and start rolling out a network. They already have substantial
spectrum holdings and the low-frequency licenses would allow them to get broad
coverage without spending too much while using their higher-frequency spectrum
to supplement capacity where needed. Dish also seems to think that wireless
data is going to be their salvation. As we inch closer to 5G, it's likely that
fixed mobile broadband from an antenna in your home could serve as competition
to wired internet services. That would allow Dish to offer on-demand services
and home broadband plus mobile services in an era when more people are
forgoing pay-TV services.

To me, that seems like something with a strong chance of happening. The
company already has a huge spectrum investment and they need wireless for
their future. Rama would be competing with way less spectrum and starting from
scratch. Seems like a much easier way to be profitable would be to bid on the
spectrum that AT&T and Verizon can't bid on, use the big FCC discounts for new
players, hold it for 4-5 years, and then re-sell it for a profit.

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paragpatelone
Great comment.

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yohann305
Good luck on the undertaking, it's going to be a tough bumpy road, but at the
end of the day, US consumers will surely benefit from it. cheers!

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logfromblammo
Given my frothing antipathy toward AT&T, and my lesser dislike of Verizon, I
am very eager to see new competitors entering the mobile telephony market,
especially one that is not a reassembled collection of Baby Bells.

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occam65
I've got a lot of respect for Chamath and his straight forward no bullshit
approach. With that said, this seems like a huge challenge, and I couldn't be
more excited that he's taking the lead on this.

Best of luck, Chamath.

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applecore
_“Fuck it! Let’s come back to the US and try to fuck this country up.”_

What a time to be alive.

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mikeash
Hell yes, fuck my country up! His words, not mine! I'd subscribe just because
of that phrasing.

