Podcast interview Mikko Linnamäki about 5G vs 4G and the Future of Mobile Networks
“Episode #140: 5G vs 4G and the Future of Mobile Networks” is a podcast episode from The Bitcoin Podcast with Mikko Linnamäki, Co-Founder of DENT Wireless, as the guest.
This podcast was made right when the ICO pre-sale of DENT was finished, and does hold both fascinating and thought-provoking information.
Listen to this podcast… Below I added some of my own thoughts throughout the episode.
Episode 140: July 23, 2017 — 53 mins
Table of contents:
- Mikko’s story
- Dent Wireless begins
- Blockchain and dent
- Onboarding Telcos
- Onboarding users
- Disruption of the data market
- Internet of things
- The ICO
- An example of telco disruption
- Selling data
- Donating data
In the introduction, the hosts discuss different topics unrelated to DENT, but they come across the issue of many projects in the cryptosphere (then, like now) of not solving actual/real problems.
This problem-solving is what they look for in crypto projects. This is what they mention right before briefly introducing Mikko Linnamäki, because – they had already got to know DW’s vision beforehand, and – they knew that DW are solving a real problem. As the hosts say: “Disrupt the world’s telco market by creating the first mobile data exchange”.
The hosts explain DENT as being:
“… a universal currency for mobile data between the customer and telco providers. This means you are no longer subject to one telco provider. You pay as you go, and the best part: You only pay for what you use. So, you always pay the best price available. And this is directed by market supply and demand, and you never have to think about borders again.”
Here, Mikko starts off with talking about how the internet was like an infant in the mid 90’s, and how the internet from that point launched forward as being one of the most important factors for our lives and a great ‘platform’ for those seeking business endeavors.
He also compares this to the blockchain and cryptocurrency systems in place today and says that a lot of the future will work on the blockchain.
Mikko’s personal journey:
- Mikko founded one of the first content management companies in Europe in the mid-90’s. At that time, Germany had only 50 websites. They had very big customers both from, and outside of Germany. Example: CNN. They sold the company in 2001.
- Founded a travel booking company. At that time, people couldn’t book flights online. They had to call the agents to book. Mikko and his team created this travel gateway. Expedia was one of their first customers. Sold this company one year after founding it.
- Founded a mobile messaging company, which they pivoted to a mobile apps company. They disrupted the app business in multiple ways. At that time, radio stations had to develop their own apps for all the different phone operating systems. At that time, Nokia, Blackberry and others were popular too. Mikko and the team created a white label platform and sold it for $500 each, as an alternative for radio stations having to develop apps with costs being up to $100,000. This white label platform got very successful. They sold this company too.
- Mikko joined an IMAP service business, and got some equity there. They won over the big-time Telcos. Two years later they merged with another company, and that company currently has 240 employees and is doing well. They had big competitors: Microsoft and Google and others, but they still managed to grow their market share since the merge in 2014 to 2017 from 49% to 72% (2.5 billion people).
Now Mikko had experience from both the foundation of the Internet, Apps, the telco industry and more. In the end, Mikko wanted to start a new company and began looking for the next big industry to disrupt.
At this time, Mikko got interested in Blockchain – not because of the speculation aspect of cryptocurrencies – but because of the business opportunities that arises from the Blockchain technology, just like Internet gave opportunities when that first started.
DENT WIRELESS BEGINS
“Then we said: Why don’t we look at the telco space? Because there is so much wrong in that. And that’s how the idea for Dent Wireless came, that the Telcos are treating their users pretty badly.”
Mikko gives in this podcast a couple examples of why the telco industry needs disruption:
- At the end of the month, they cut you off from all the data you didn’t use – even though you already payed for it.
- Roaming fees (up to $25,000 per GB as in Co-Founder Andy’s example).
BLOCKCHAIN AND DENT
Question from the hosts: “How does Blockchain fit into this, why do you need Blockchain to solve this problem?”
– What needed to be solved, was that the Telcos shouldn’t act like they were monopolies anymore.
The 4-5 Telcos in each country act like they are monopolies, and we need something to pull them out of these silos. The only way that can be possible, is for a third party to make a marketplace for data. This system needs a currency. And with blockchain and cryptocurrencies, DENT Wireless now had the chance to create this data currency: DENT.
When Mikko talked about Telcos acting like they are monopolies, he also mentioned that there has to be a third party that can get the Telcos out of their silos.
This is an important aspect when it comes to DENT Wireless and its competition. There are no businesses anywhere, blockchain space or not, aiming to disrupt the telco space like DENT Wireless is doing, as far as I know. The closest that can be found when it comes to competition in terms of the aims for disruption, are the few examples of collaborations between Telcos.
Fact is, DENT Wireless has its place as the one and only global disruptor for the future.
Why doesn’t a big Telco create the ecosystem necessary for this kind of disruption themselves? After all, they will have a much easier job of onboarding other Telcos than DENT Wireless as a startup has.
The reason for this is, the big Telcos want the industry to be as it is today, as long as they can.
But if Telcos don’t want the disruption, how can DENT Wireless manage to get Telcos to join their platforms at all?
This is very interesting and will be mentioned later in the interview.
Let’s now head back to the interview with Mikko, and see what he tells us when the Interviewer asks:
“I see how the aspect of a worldwide currency backed by Ethereum fits into an ideal model of how this will work for the end user, but I feel like there is going to be a pushback from these giant telco companies, because they are still earning a lot of money. How do you onboard them?”
Mikko answers with saying that there are a few very interesting developments coming in the telco space.
“First, eSIM. Apple has been at the forefront when it comes to eSIM, and they received a massive pushback from the Telcos, like you say. But now, the Telcos realize that locking people in with force isn’t such a great business model after all.”
Secondly, Google Fi challenges Telcos by introducing Wifi calls and messages.
What DENT Wireless wants, is for this market to be liberated, because there is such a demand and need for the Telcos to work in a different way.
“Sure, the Telcos will push back as hard as they can, but as we see already when we talk to the Telcos, there are some that see this [the DENT ecosystem and liberation of data] as a competitive advantage against the others.”
The smaller Telcos want the power to go away from the big guys, so onboarding the smaller ones won’t be a big hurdle.
Mikko also compares having fought against Microsoft and Google in previous endeavors to this challenge with the Telcos, and says: “This is no different.”
Mikko shortly explain the main telco benefit: “When the telco liberates the data to be traded just like any other commodity, they will benefit from a bigger market.”
Here are also some telco benefits that Mikko mentioned in Telegram 2017 during the ICO-sale too:
- They will get new customers, as other carrier’s customers buy their data.
- They will be able to create new data services and have a direct distribution without “hardware” SIM cards.
- Telcos will get revenue also from “user-to-user” data transfers, as the DENT marketplace gives the telco part of the revenue for enabling the transfer.
- Telcos can sell “night data” and other non-peak hour data, products which are not available today.
- IOT devices need to have a marketplace to automatically buy data, nobody will run around with SIM cards anymore and change those
The interviewer mentions a word: “Coopetition, where the companies can work together and still cooperate in a differentiating way”, an interesting term that can be used about the Telcos working together while using DENT Wireless’ services.
“The path for how we want to bring this service to their [the Telcos] attention is quite interesting. What do you think the most valuable asset the Telcos has? It is the user.”
The one thing Telcos don’t want, is that their users are leaving for someone else.
“2 million users have a buying power of 920 million dollars”.
Therefore, DENT Wireless needs to go to the consumers first. As when the consumers come onboard, Telcos will want to partake and take a share of the revenue from these users.
“Once we have all these [users], then we can start negotiating with them [Telcos]. … [Saying to the Telcos:] We have here a group of people with great interest for you to improve. They want to be able to give the data package to another person if they want, they want to be able to sell it because they have already payed for it.
And if the operator doesn’t listen, then I’m sure their competitor will be happy to get that many new users.”
DISRUPTION OF THE DATA MARKET
Mikko proceeds talking about other startups that are liberating their markets, like AirBnB and Uber. “People thought they were crazy too. But in the end, the old monoliths have to either adapt, or die.”
Mikko is from Finland and provides an example of a stubborn business management: Nokia accounted for 25% of Finland’s GDP. Nokia were laughing at iPhone, “We have 53 models, Apple has only 1. Nobody can beat us.”
“Two, three years after, Nokia’s phone business collapsed.”
The mobile data market worldwide is $32 billion per month. And it’s growing.
This shows the potential of DENT Wireless. Check it out yourself but these companies disrupting their industries didn’t do that in a blink of an eye. They needed many years for this to happen. But what matters is, the disruption did happen eventually.
INTERNET OF THINGS
Mikko explains that IoT will become bigger over time, and all these devices need data. The manufacturers can’t go around placing plastic SIM cards in these devices and buy data packages for the devices the usual way. The IoT-devices need eSIM and a smart way of automatically buying what they need – worldwide. This is one of the reasons why the DENT marketplace is vital for IoT adoption and data disruption.
The hosts ask: “Outside of being a currency, is there a utility to the token?”
Mikko: “… First of all, that [DENT token] is the currency to buy data. … And the second thing is, of course, once they own DENT, they can be part of the movement and create this change in the market. So, owning the currency of the future market where mobile data is traded is quite attractive.”
Mikko specifies the main use case of buying data, and also being part of the movement. This is for sure interesting, but what I (and I assume the interviewers too) miss to hear more about here, is in-depth discussion on the token use-case and systems in place made to reduce the token velocity.
I personally believe DENT Wireless generally haven’t focused much on token velocity and tokenomics overall. That being said, they have developed a system in place, that does in fact reduce the velocity: the Afterburner Loyalty Program.
Tip: read our post How can DENT Wireless decrease token velocity to boost the token price?
Mikko talks about his experience with the ICO, and says:
“Of course, everyone [the ICO investors] understands that this is one of the biggest projects of one of the biggest industries. But, that’s why we chose it, because it is a challenge. And once it gets successful, it gets very successful.”
AN EXAMPLE OF TELCO DISRUPTION
In India, DW’s earlier advisor, Rainer Deutschmann with his fellow leadership team, launched Reliance Jio. They acquired 100 million customers within six months. After they came to the Indian market, data prices went down 80%.
One of the ways this was made possible, was the data transferability in their apps. Their customers could send data to others. And although it wouldn’t go through blockchain, it would instead go through databases.
“But blockchain is much more intelligent. Because we can have data packages defined as smart contracts, we can have the activation of a data package as a smart contract. And the whole marketplace will work on smart contracts. So, it’s fully transparent.”
It is true that using blockchains gives the possibility of high transparency. But that is only the case if the blockchain is public. DENT Wireless currently uses a “private” sidechain on the Ethereum network, and although all buy and sell transactions are visible on the DENT marketplace, the mobile data and prepaid top-ups sold directly by DENT Wireless from inside the DENT Apps are invisible. Also, the individual activations are invisible (and only totals are reported).
Mikko also explains that selling used packages will be a game changer for the industry. Selling 5GB with only a week left of validity will be sold for a cheaper price than 5GB with longer duration of validity. “So, you’ll still feed the people that want to have that data. And maybe someone needs that package just for a week.”
DENT Wireless will make it possible for users to donate data to people in poorer countries, “… and since DENT is the “worldwide data currency”, it’s quite easy to donate either DENT or data directly.”
This can in turn give more customers and generate more revenue for the Telcos there, which should be of benefit to the local community.
It should also be noted that DENT Wireless will also use 1% (1 billion DENT) of the total supply of DENT tokens to support the United Nations SDG program for the purpose of enabling mobile data access in developing countries. (Page 12 and 13 Whitepaper)
THE END QUESTION
The interviewers ask Mikko to explain the concept of blockchain in 10 words or less.
And as talkative as Mikko is :), he took the time to describe the pros and cons of blockchain, in addition to explaining his opinions on how part of the future will depend on blockchain.
So, overall, although it has been recorded almost 3 years ago, it’s still very interesting to listen. Hopefully, Mikko can do a podcast like this again and give us new insights about the mobile data market and how DENT Wireless will positioning itself in this ever changing and challenging market.
But of course, we won’t hesitate to ask Mikko questions like the ones in this podcast during the AMA sessions with Mikko (often hold at the moment a new roadmap is presented).