After a long, successful career in the technology industry, Swedish-American entrepreneur Carl-Johan Torarp is bringing reliable wireless broadband to small towns and farmsteads in southwestern Minnesota and beyond. His firm, Minneapolis-based LocaLoop
, is “an economically viable 4G business solution for operators providing fixed and mobile broadband Internet service and web applications for consumer, business, and government users,” according to its website. Put another way, it’s a “complete 4G business-in-a-box.”
As a (primarily) B2B firm that markets to smaller communication service providers—rural telephone companies, communications/electric cooperatives, local public utilities, and entrepreneurs who see a money-making opportunity in bringing fast, reliable mobile and fixed Internet service to previously underserved areas—LocaLoop doesn’t deal directly with individual subscribers.
It does, however, offer a complementary, consumer-facing brand called synKro, which is enabled by LocaLoop’s four-patent cloud technology. SynKro allows operators to immediately deploy this “brand-in-a-box” and leverage LocaLoop’s existing marketing infrastructure, salesforce, and client-facing services.
On top of the cachet of an increasingly recognizable brand, synKro offers benefits like on-demand support, automatic payment collection and mobile compatibility—“data roaming,” as LocaLoop describes it—with other synKro-enabled providers across the country. Subscribers who want to use their mobile devices outside their regular provider’s service area can be confident that they’ll enjoy access to consistent, high-quality broadband Internet.
If this sounds novel, it should. According to Torarp, LocaLoop’s solution is a superior—and innovatively disruptive—alternative to the three main categories of service providers that currently operate in LocaLoop’s target markets. These are larger telecom firms with huge “legacy” investments in fixed (aka landline) broadband systems that require government subsidies to remain profitable; smaller firms that rely on wireless LANs or early-generation (and thus uncompetitive) broadband technology; and wireless carriers (AT&T, Verizon, and others) whose 4G coverage is designed for high-density markets and isn’t profitable or consistent in rural areas, if it’s available at all.
Each type of provider has its own shortcomings. The legacy operators “don’t know of any other way [to profitability] than relying on subsidies,” says Torarp, and the LAN/first-generation wireless broadband operators can’t afford to scale or maintain the technology at sufficient densities. It’s possible that mobile carriers could one day build out profitable, tower-based 4G networks in rural areas, but that’s still a decade away, at best.
By then, a new technology may have usurped 4G broadband anyway—a problem that LocaLoop’s continuously updated Software-as-a-Service/Infrastructure-as-a-Service (SaaS/IaaS) avoids by adapting its “cloud service platform” to newer generations of wireless broadband hardware as they emerge.
In fact, LocaLoop’s technology is the first rural wireless broadband service that offers a speedy path to profitability for operators. According to Torarp, a new client with access to an existing tower and 180 subscribers needs less than $30,000—or $1,000 per month, if its equipment is leased—to get started.
All things being equal, the technology’s break-even point is around 100 subscribers per tower location, and an operator that adds 50 subscribers per month should recoup its investment in less than six months. When compared to the multimillion-dollar deployment costs of existing rural broadband technologies, LocaLoop’s solution looks like a steal.
Aside from local operators and entrepreneurs, LocaLoop serves vertically integrated customers like energy firms that maintain labor-intensive operations in remote areas. Its solutions are also cost-effective for prosperous farmers and ranchers who wish to set up their own towers and act as their own operators.
What’s next for LocaLoop? Growth—and plenty of it. “From a technology or business point of view, nothing prevents us from becoming a billion-dollar company [over the next decade],” says Torarp. “From now on, it’s about effective business plan execution and access to enough expansion capital.”
Sounds like a plan.
Source: Carl-Johan Torarp
Writer: Brian Martucci