Dan Hodges does not mince words: he hopes to obtain funding from the United States government to position his new company, COMSovereign, as an alternative based in the United States to suppliers of 5G equipment such as Nokia, Ericsson and Huawei.
“Why does a foreign company profit so much from the United States when we have such advanced technology?” Hodges asked during a discussion of COMSovereign’s business with Light Reading. “We can do this at a fraction of the cost that Ericsson, Nokia and Huawei can achieve for these networks. We can do them from far away, much cheaper, because most aspects can be virtualized and have been virtualized, and actually offer a more efficient way with much less failure than these guys. ”
Hodges said COMSovereign presents a “nightmare scenario” for companies like Nokia and Ericsson who are looking for 5G activities from American operators.
And Hodges also has specific words for Huawei in China: “With network virtualization, we are far beyond what Huawei has done. So whoever says that the United States is far behind, technically, smokes crack “They have no idea. We are so much beyond them right now.”
Hodges’ COMSovereign strategy has gone public in recent months. He and his partner John Howell have combined a wide range of wireless companies via stock exchange transactions primarily to create a full service 5G equipment supplier based in the United States. The goal, explained Hodges, is to wean American companies from foreign suppliers like Nokia or Ericsson and provide a bulwark against Chinese Huawei, who has been accused of creating a conduit for Chinese espionage with its 5G equipment. Huawei denies this accusation.
More specifically, COMSovereign boasts of being able to “provide operators with the critical technology for the transition from latent networks to 5G” by proposing a technological package including its recent acquisitions:
- DragonWave-X (wireless link)
- Aviation Holding Drone (drones for airborne LTE)
- InduraPower (smart batteries and backup power)
- Lextrum (full duplex wireless technologies)
- Virtual network communications (basic and basic LTE equipment)
- Sovereign Plastics (manufacture of materials and components)
- Silver Bullet Technology (hardware and software design and development)
- Veo (silicon photonic technologies)
The company reports that its combined addressable market through purchases exceeds $ 1 trillion.
It’s also worth noting that Hodges is also seizing short-term opportunities: COMSovereign announced last month that its new Sovereign Plastics manufacturing facility in Colorado Springs, Colorado would produce Personal Protective Equipment (PPE) for a supplier Unnamed supporting the fight against COVID-19. .
Made in america
When asked if COMSovereign would benefit from US government funding for local 5G equipment, Hodges said, “We’d be stupid not to do it.”
COMSovereign is not alone. Parallel Wireless, Mavenir, and other U.S. companies have also started touting American good faith in an effort to woo American regulators and legislators keen to create American jobs – and to beat China in the “5G race”. .
The idea of a 5G race between the U.S. and China has sparked a number of innovative proposals, ranging from a $ 1 billion fund for open RAN technology provided by the U.S. to l purchase by the US government of Ericsson or Nokia from a 5G federally-built network to a program to tear off Huawei’s equipment on American networks and replace it with “trusted” equipment. For suppliers watching such procedures, it should be noted that the price paid for this Huawei “rip and replace” program has doubled to $ 2 billion in less than a year.
In its quest to confront Nokia and Ericsson, Hodges has recognized that COMSovereign is not the same weight and the same weight as its main competitors. But he argued that COMSovereign is small and agile and can partner with suppliers such as CommScope for antennas and Xilinx, Altera and Intel for basic chipsets if necessary. It should be noted that all of these companies are also based in the United States.
“We are just starting the ramp,” said Hodges, arguing that “official” 5G will not be available until the 3GPP standards organization releases its “Release 17” package of 5G specifications, which is currently slated to do so in 2021. This schedule, Hodges explained, should give COMSovereign the ability to unify its offerings and enter the market with a full portfolio of 5G products ranging from a virtualized core to transmitters high power duplex. He said the company would do so by leveraging the customers of the companies it acquired – DragonWave-X, for example, already has a range of high-level wireless operators as customers.
A large order
Industry analysts say the odds are against COMSovereign.
“While barriers to entry for 5G virtual network providers are significantly lower than ever and level 1 operators are willing to take more risks, the barriers are still significant,” said analyst Roger. Entner, founder of Recon Analytics. “There is no standardized hardware for virtualized RAN equipment. Industry leader Rakuten had to build and design it specifically for them. Companies like Mavenir and Aliostar have software ready for many of these. functions and have built relationships. ”
Entner: “It will be very difficult, but not impossible, for a newcomer like COMSovereign to enter the market. It only took Samsung ten years to establish itself in the US equipment market and they have still failed to get a client for network infrastructure equipment. ”
Others have accepted. “It will take COMSovereign at least a decade to get closer to its stated goal of competing with Ericsson, Huawei or Nokia,” said analyst Daryl Schoolar, practice manager at Omdia, a market research company that, like Light Reading, is part of Informa Tech. “A more realistic goal would be to try to compete with Altiostar, Mavenir and Parallel Wireless. These three companies are more advanced than COMSovereign in gaining market share in mobile infrastructure and will also be competing for all of the available United States. Government funding. ”
Strengthen its funding
However, as COMSovereign prepares to enter the entire 5G equipment arena, Hodges said the company is working to “improve” its financial condition by entering a reputable Wall Street stock exchange like the Nasdaq or NYSE. .
“We think the game of equity is coming soon,” he said, noting that he and his partner had invested about $ 15 million in COMSovereign without taking any wages. He said COMSovereign currently has around 4,000 investors, but switching to a Wall Street stock exchange “makes financing much easier”.
This strategy makes sense given that the company’s latest quarterly financial report provides only financial details for Drone Aviation Holding and no other companies.
A colorful leader
COMSovereign seems to be one of Hodges’ many interests.
In one of the biographies of his company, he appears in the list of executives with “extensive multidisciplinary experience, including more than 20 years of experience in public markets as a subscriber for more than 200 listed entities. The majority of his time was spent on corporate structure, building SEC filings and mergers and acquisitions activities. ”
Another biography continues: “From 1995 to 2002, Mr. Hodges participated in the formation and / or public registration of several public companies as an investor. In private, Mr. Hodges was involved in real estate developments and residential developments in southern Arizona since 1993. ”
Hodges began his career in the energy industry, as CEO of oil, gas and coal companies, including Fidelis Energy. Indeed, he wrote a book on energy independence in the United States in 2007 entitled “FutureSpan”.
Hodges’ interests turned to technology and wireless communications soon after.
For example, Hodges said it “obtained patent applications for nuclear batteries from their inventor, completed initial research into the technology and prosecuted them for granting patents in 2009 with an initial estimated value of more than 25 million dollars. ”
Hodges also founded Medusa Scientific, a science and engineering research and development company that at one point worked on a “jockey cam” helmet to broadcast horse racing from the rider position. “When one of Medusa’s technologies proved to be commercially promising, he decided to try it out and formed TM Technologies, a” sister company, “to commercialize the proprietary modulation technology,” says the biography of Hodges.
One of Hodges’ two patents stems from his work with TM. The other is a “method and system for a basic intelligence program” which involves artificial intelligence and threat assessment.
In 2017, he formed Transform-X with $ 1.1 million in private funding to buy DragonWave out of bankruptcy, an action that roughly marks the debut of COMSovereign.
In addition to his commercial efforts, Hodges also served in the U.S. Army for 26 years, retiring in 2014 as an F-16 flight instructor in Tucson, Arizona. According to his LinkedIn page, he also founded the Artifact Foundation to “promote the study, significance and validation of manuscripts, manuscripts and historical codices of the ancient Scriptures, and exhibit them throughout the world”. This year, he is expected to complete a graduate degree in divinity at Liberty University, a private Evangelical Christian university founded by Jerry Falwell Sr. and now run by his son, Jerry Falwell Jr.
– Mike Dano, Editorial Director, 5G and Mobile Strategies, Light Reading | @mikeddano