With New Advisors, Loon Tries to Get Serious

Loon, the Alphabet subsidiary that rose from Google's X moonshot division with a plan to use balloons to provide LTE-based Internet services, is working to appear a little less, er, loony. At least, that may be the message behind the appointment of three high-profile telecommunications executives to Loon's new advisory board.

Loon CEO Alastair Westgarth announced that Craig McCaw, Ian Small and Marni Walden will act as advisors to Loon as it transitions from a Google (Nasdaq: GOOG) research project into a commercial business within Alphabet's "other bets" division.

"We're adding some serious expertise to our ranks," Westgarth wrote. And he's right: McCaw, in particular, is a legendary executive in the wireless industry, because he essentially cobbled together the nation's first cellular network before selling McCaw Cellular to AT&T Inc. (NYSE: T). McCaw then had a hand in the development of Nextel and Clearwire before those companies were subsumed by Sprint Corp. (NYSE: S). McCaw today is CEO of Eagle River, a private investment firm focused on the communications industry.

"I'm incredibly impressed by Loon's progress," McCaw said in a statement. "I look forward to working with Alastair and the team [at Loon] to help realize the mission of connecting people in places that for too long have been left behind."

As for Small and Walden, they too have extensive experience in telecommunications. Small is currently CEO of note-taking app Evernote and previously held positions at Telefónica , while Walden held a variety of roles at Verizon Communications Inc. (NYSE: VZ) before leaving the company last year.

"With their collective expertise and wisdom, Craig, Ian, and Marni will help guide and advise us as we work to partner with MNOs around the world and advance our mission of connecting people everywhere," Westgarth wrote.

Challenges ahead and above
Loon and its new advisors face an uphill battle. The Alphabet subsidiary's balloon-based business model has often served as the butt of jokes among telecom execs ("full of hot air," for example). Further, Loon's goal of connecting the unconnected is also being chased by a wide range of other players. For example, Facebook , Verizon and others have tested Internet services delivered by drones, while a bevy of companies -- ranging from OneWeb to SpaceX -- are hoping to use thousands of low-orbit satellites to bring Internet services to remote areas. (See FCC OKs SpaceX to Launch 7,518 More Broadband Satellites.)

But those at Loon continue to promise commercial, balloon-based LTE services by next year. Perhaps more importantly, Loon boasts the pedigree of being created as a "project" within Google in during the company's anything-goes heyday of 2013. In the intervening years, "Project Loon" refined its balloon technology to the point where it "graduated" last year from X, the "moonshot" research and development effort within Alphabet Inc. , the parent company of Google.

And now, complete with its new, high-powered advisory board, Loon is attempting to sell its technology to mobile network operators that want to quickly and cheaply deploy LTE connections into as-yet-unreached areas.

And the company's technology is certainly something else: Loon literally sends LTE base stations into the stratosphere hanging from really big balloons. The company built a custom balloon-launching machine to get its custom-made balloons off the ground. The balloons carry special LTE antennas that can receive signals from ground-based transmitters 12 miles away. Once enough balloons are in the air, they can then bounce that signal among themselves for hundreds of miles, thereby connecting someone underneath a balloon to the Internet via what is essentially a floating mesh backhaul network. Each balloon can cover 3,000 square miles with an LTE signal.

Loon has provided some answers to the obvious logistical challenges this scheme raises: For example, the balloons can stay afloat for up to 100 days, and can navigate to specific destinations by rising or lowering to wind currents headed the right direction. Balloons that need to come down can deploy a parachute to float back to Earth (local air traffic controllers would be notified) where they would be retrieved by a ground crew. But other questions haven't been addressed, such as what kind of speeds, latency and reliability a Loon network would provide to users (the company said Loon network performance would be "consistent" with what the company's mobile network operator partners would provide).

Nonetheless, Loon has sought to prove out its technology, most notably by partnering with AT&T and T-Mobile to connect more than 250,000 unique users in Puerto Rico in the aftermath of Hurricane Maria. And in July of 2018, Loon said it inked a commercial deal with Telkom Kenya to provide balloon-powered Internet to regions of central Kenya starting sometime this year. (See also T-Mobile Quietly Confirms 5G Network in 30 Cities.)

Will other mobile network operators be willing to try out Loon's balloons? With advisors like McCaw and Walden, Loon may well have a better chance of getting the right people on the phone. Whether a Loon system can generate revenues sufficient for the investment remains to be seen, however.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano 1/16/2019 | 10:08:30 AM
Re: Will Loon will target rural North America next? Yeah I wondered about that too. These advisors seem particularly focused on North America, whereas it seems like the opportunity for Loon is much more global.
Gabriel Brown 1/16/2019 | 3:34:22 AM
Will Loon will target rural North America next? These are A-grade executives but if your mission is "connecting people in places that for too long have been left behind" you need people that have experience and knowledge of that world. What these new advisors add in that direction isn't at all clear. Unless Loon will target rural North America next?

Current activity is focused on Kenya, according to reports.
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