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Sparkplug CEO Expects Further Consolidation in Fixed Wireless Broadband Space
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June 16, 2010

Sparkplug CEO Expects Further Consolidation in Fixed Wireless Broadband Space



By Paula Bernier, Executive Editor, IP Communications Magazines


Fixed wireless broadband offers businesses some nice benefits, including access to areas not reached by fiber, fast turn-up times, and connectivity that's diverse from wireline. However, today, wireless broadband outfits that do business in just a handful of markets are limited in the scope of their offerings to customers, as well as in their financial prospects related to the investment community. Sparkplug (News - Alert) CEO Michael Ruley expects that to change in the near future.


"Is there a place for this technology? I definitely think there is - with scale," Ruley told TMCnet yesterday during a meeting in Sparkplug's Scottsdale, Ariz., office.

"The industry needs to consolidate, simply put," Ruley said. "You have to have more of a physical reach through more markets to create the viability of the business. We think the business is viable; clearly it's viable. But in order for it to be a more competitively sustainable product in the marketplace, you have to have more footprint."

"You've got to have a company with $50-100 million top line revenue," he added.

Sparkplug, a late stage VC-backed company with less than $20 million in annual revenue, recently has been both selling off and buying assets. It recently sold to Towerstream its assets in Chicago and Nashville, which were the networks on which Sparkplug originally launched service about six years ago. That sale financed Sparkplug's purchase of MetroBridge Networks' (News - Alert) wireless broadband assets in the Phoenix area. 

In announcing the MetroBridge deal, which was publicly unveiled May 21 and is expected to close by the end of the second quarter, Ruley said: "You can expect to see similar momentum continue from Sparkplug in the future as we continue building market share."

The MetroBridge deal expands Sparkplug's footprint in its existing market of Phoenix.  Sparkplug also does business in the Des Moines, Iowa, and Las Vegas metropolitan areas. Ruley noted that Phoenix and Las Vegas are among the toughest markets in the country, given there have been a lot of business failures in these cities during the economic downturn. Nonetheless, he said, Sparkplug has seen double-digit growth during the worst of times.

"The key for us is owning the last mile," said Ruley, noting that many CLECs can't make that claim. "Not many companies own [their] own independent network. I don't touch other competitors' networks, nor do I need to rely on a competitor to offer service to my customer. [That] means that I can control my customer relationship. I can make sure that it's provisioned correctly. I can make sure the quality of service is there. I can make sure the bandwidth we commit is delivered. And I can monitor it myself."

Sparkplug's focus is on serving business customers (mostly medium and enterprise types with monthly spends of $500 or higher) and carriers, to which the company sells wireless backhaul links. Today Sparkplug has more than 4,000 customers. It sells SLA-guaranteed connectivity at 5mbps symmetrical and above, as well as hosted voice services based on the BroadSoft (News - Alert) platform. 

The Sparkplug network today employs equipment from Alvarion and Motorola for Ethernet-based metro access, and from DragonWave (News - Alert) for backhaul. The technology enables Sparkplug to turn up customer service within three to five days, whether that's for an application at a fixed customer location or for a one-time event at someplace like a convention center or fairgrounds.

"The technology works best not necessarily in a downtown urban environment, because you have fiber in a lot of these buildings, but it is more effective in the surrounding areas that are supported by a lot of low-rise buildings," says Ruley. "Whether it's a call center or a medical imaging, all kinds of applications are driving this demand for the last mile."

Speaking of technology, the initial concept for Sparkplug was for it to be a technology company as opposed to a services company. The idea was for the company to act as a pilot network to showcase Motorola's Canopy line of fixed broadband point-to-multipoint network gear. However, over time the strategy morphed into one focused instead on advancing services. With that change, new investor money was brought in, and Sparkplug was combined with Prairie Inet LLC of Des Moines and Telespectra (the former MCI wireless backhaul business) of Phoenix. 

Ruley, a telecom industry veteran, joined Sparkplug as CEO about two years ago. His last gig was as CEO of Hawaiian Telecom. He's also held the CEO post at NextiraOne (News - Alert), a North American voice and data solutions business with about 3,500 employees. And he's been a top executive in the past at competitive service providers Teleport Communications Group and XO Communications.



Edited by Michael Dinan


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