Using his experience in bringing Internet access to Sri Lanka and the Philippines, Chamath Palihapitiya is considering the United States as his next venture capital playground.
Already a partner in the uncommon business Social Capital, Palihapitiya made a statement at the M1 Summit on Nov. 10, declaring that his company aims to compete directly with the oversized carriers from the American market.
The new carrier is called Rama and it already operates on the Internet market of Sri Lanka, where it owns 10 Megahertz worth of spectrum. Rama is also looking to enter the Philippine market by buying spectrum there.
LotusFlare, another company owned by Palihapitiya, will provide the software that will power the enterprise, while Rama will stick to being the carrier.
The Federal Communications Commission (FCC) declared that in the spring of 2016 it will auction off what experts call "beachfront property" of spectrum. Beachfront property refers to a specter of radio frequencies that plays well with mobile data, because it has the ability to pass through buildings and can reach significant distances. Big names such as Verizon and AT&T will probably bid as well, but Palihapitiya is confident that he can hold his own against the traditional carriers.
"There's a whole bunch of issues that carriers aren't trying to solve. All these things are now just totally broken," Palihapitiya said.
Palihapitiya's ambition is to make Rama an example of innovation. Rama's purposes are to impose flexibility and to offer quick access to its network. One way Palihapitiya plans to do that is by installing microcells in the client's houses, thus extending the network rapidly. Additional help for customers will come from software solutions offered by LotusFlare, namely apps that leave the customer's data plan intact.
The estimated budget for the new carrier runs between $4 billion and $10 billion. The venture capitalist underlined that he already has promises from premium investors. He further pointed out that Social Capital is in the cards for participation.
Even if there is little information about Rama, the future carrier has a chance to disrupt the established status quo of big U.S. carriers.
Palihapitiya acknowledges that things must be prioritized and said that he plans to win the auction first and then to raise the capital for the business.
