Federated Wireless Hopes to Create a New Platform Business

Federated Wireless now provides an example of how a “pipeline” provider business model can lead to a “platform” business model, without abandonment of the original business. 

A platform business model essentially involves becoming an exchange or marketplace. Instead of operating as a direct supplier of some essential input in the value chain, owning assets and creating products, the platform functions as a matchmaker, bringing buyers and sellers together. 

Pipeline business models are the way most businesses always have worked: an innovator identifies a customer need; sources all the materials required to create a solution; creates distribution channels and fulfills delivery of the product.  

A pipeline business creates and owns the products it sells. Exchanges or marketplaces most often do not own the products bought and sold on their exchanges. 

As always, there are exceptions in the real world. Amazon does actually source, brand and sell some of the products sold on its website. 

The Federated Wireless Spectrum Exchange allows third party use of Citizens Broadband Radio Service (CBRS) Priority Access Licenses by third parties.

Participant sellers can publish their assets, seek buyers and receive instant payment. 

“Organizations seeking assured, PAL-grade connectivity throughout the 3.5 GHz CBRS band will simply visit the Spectrum Exchange, browse through the lists of providers, spectrum availability, time periods and locations, and place an order online,” the company says. “Spectrum is allocated almost instantly for the period requested through the Federated Wireless Spectrum Access System.”

Another firm attempting to create a platform business, in addition to its own “pipeline” business, is PCCW Global. Though PCCW Global owns and creates its own network services, it also is working to create a platform business allowing customers to sell and buy capacity and  data center services using an automated exchange. 

source: PCCW Global, MEF 

In essence, the platform would create a new platform business where some of the revenue comes from sale of its own network products, but hopefully much of the revenue comes from transactions. 

For Federated Wireless, the new shift moves it from providing the spectrum controller function (allowing shared use of spectrum while avoiding interference) to providing a spectrum exchange.