Thursday, August 9, 2012

Why would JP Morgan, GE Capital or Blackstone be interested in the Public Safety Broadband Network?

In exploring the concept of a Public Private Partnership, and its ability to fund the Nations First Responder Network, or Public Safety Broadband Network (PSBN), one of the most critical factors will be its “private” component. One must remember that the term “private” is not limited to just the commercial carriers and in most cases won't even include them. When I think private I think Blackstone, GE Capital, Softbank, JP Morgan and even the Warren Buffet types. This is where the real money is; and where there’s money there’s a desire to make more of it.

Why, as an investor, would I be interested in the Public Safety Broadband Network? From the standpoint of a major private investor I see long-term recurring revenue coming out of a State initiative Pubic Private Partnership for a States Public safety Broadband Plan. What I see is a long-term 20-30 year SLA contracts from a multitude (roughly 30-80 entities per State) of State entities that require the private broadband access available on the PSBN. I see those SLA contracts being paid between $5-$20 (if not more) Million annually. I see a solid foundation of these entities as being stalwart in their own business objectives. At the center of this broadband network I see a single entity, or private company, whose mission in life is just to run the broadband network for those State agencies and entities forming a focused business objective. I see the backing of the Federal Government. I see the further expansion of selling the available and underutilized bandwidth to the carriers so that they can reach their broadband rural access customers. I see a host of M2M device manufacturers designing and manufacturing a host of new devices covering every aspect of the 700 MHz spectrum further institutionalizing the entire wireless business solution for all the foreseeable future. I also see that I am not the only winner; the State entities themselves, all of the Public Safety concerns, a States needs and adherence to Federal rules…. are all winners.

That makes for a pretty good investment. You won’t find that kind of solid return anymore in any market.

If I were a major financial institution I would be very interested in how this network develops.

Just some guy and a blog….

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