Future vision – Kailas Rao

Industar’s Rao sees new wireless solutions for business
For a technological visionary, Kailas Rao reacts like anyone else when he gets an $80 phone bill for making an international phone call.
“When you travel abroad, you realize the importance of communications,” says Rao, who is on the verge of launching his own digital wireless phone service in Milwaukee.
“The phones don’t work, and when they do work, it’s very expensive,” Rao says.
If all goes according to plan, Rao intends to be at the forefront of a digital revolution that, among other things, will allow a business person to dial four digits to place a call to the office from anywhere in the world.
He predicts that in the not-so-distant future, he will be able to place that same call for $8. Additionally, wireless users will have a single phone device that performs multiple functions, and a single number that follows them wherever they go.
To Rao – a former UWM professor who made his mark by establishing the Computer Bay franchise – those are not far-off visions of the future, but rather are pending realities that he intends to capitalize on.
As he stands on the verge of launching his $160 million Milwaukee-based wireless phone service, Industar Digital PCS, Rao has an impressive list of investors behind him who believe in his ability to deliver on a complex technological vision.
Those investors include Hughes Network Services, a division of General Motors, which is contributing $5 million in cash and $60 million in infrastructure financing to Industar; not to mention Japanese super-bank Kanematsu and cordless phone maker Uniden Corp. – both of which are contributing $5 million to the effort.
Locally, the list of investors includes Fiserv CEO George Dalton, Super Steel Chairman Fred Luber, and baseball commissioner Allan “Bud” Selig.
They’re all banking on Rao’s proven ability to take a budding technology and bring it to the masses the way he did with Computer Bay, a franchise he founded here 18 years ago that sold personal computers to business customers. By the time he sold it in 1992, Computer Bay was a national network of 350 stores in 44 states and Canada. Annual sales for Milwaukee area operations alone were $100 million.
This time, the plan is to take digital wireless technology and create a model here in southeast Wisconsin that can be duplicated again and again.
Same vision, different technology.
“Kailas is a pretty tenacious person,” Dalton said in an earlier published report. “He dreams and see things – and then he makes them happen.”
A revolution is coming
In recent years, technology pundits have predicted the convergence of the Internet, cable television, personal computers and the telephone. Given the magnitude of this coming together of four major mediums, such a day would seem a long way off.
But when it does happen, Rao’s backers are betting that he will be at the forefront of this melding of technologies. That could take shape in the form of a wireless phone capable of performing multiple functions.
“What I’m talking about here with Industar is a killer application,” Rao says from his spartan office in downtown Milwaukee at the corner of Mason and Van Buren. “We’re going to merge the Internet and cable and telephones all into one. It’s going to change the way we do business – how productive and how creative we become. It’s going to be the greatest revolution since the introduction of the automobile.”
When the company begins operation sometime in the first quarter of this year, Industar will start as a digital wireless telephone company, providing the usual array of services one might expect, but with one important twist: Just as he did with Computer Bay, Rao will target business customers, which are a tougher, longer sell, but a very lucrative market once they become established customers.
“We understand business, and how they want to be serviced,” Rao says. “We don’t want to be like the other stores, where it’s just hard retail sales.”
Rao sees vast potential in developing wireless applications for business that improve productivity and translate to the bottom line. Instead of chasing after a market that is already saturated – that being the cellular/digital consumer – Industar is going after business customers by selling wireless as a productivity tool. Over time, this will evolve into more than voice phone service, but data applications, as well.
“Our initial focus will be the phone, but we are going to find vertical applications,” says Rao, a native of Hyderabad, India who came to Milwaukee in the 1970s to teach accounting and business information systems at UWM. “We are going to find a niche in the marketplace. The pie is so large that if you try to be everything to everybody, you are not going to succeed.”
Serving that niche might include giving utility companies the ability to replace their meter readers by placing an automatic device on a water or electric meter which can transmit data automatically. Rao estimates he can do that as cheaply as $5 per home.
On the voice side of the equation, Industar one day will be able to install a cell in the ceiling of an office, enabling callers to dial a four-digit number to reach the office from anywhere in the world.
Or, Rao says users will soon have the ability to type a letter on the computer and then send it via wireless phone.
Rao recalls a meeting he had with Steve Jobs back when Apple Computer was still in its early stages. He told Jobs that the business applications for his personal computer were enormous, demonstrating it by putting a spreadsheet program on the computer.
“I told him, ‘I can reduce your cost of operations by 10 percent before you blink your eyes,'” Rao recalls. “He said ‘Show me,’ and I did.”
It’s that same entrepreneurial spirit that is the brains behind Industar.
Getting it right
In 1996, Rao paid $60 million in an FCC auction for a 30 MHz license for the bandwith to launch his wireless service. Since then, the long and expensive process of establishing the network infrastructure has been ongoing. That means establishing 63 cell sites in the seven-county area of southeastern Wisconsin at a cost of $500,000 per site. Calls are routed downtown to Industar’s switch, which was purchased from Alcatel Communications of France for $15 million.
Rather than begin operations with a service that is not completely bug-free and ready to go, Rao has pushed back the launch of Industar several times – from the end of last summer, to sometime in fall – in order to ensure that the service is seamless once it begins.
Industar will use the digital technology of Time Division Multiple Access (TDMA) for its service platform – the same technology used by AT&T Wireless, with which Industar has a roaming agreement. (Industar customers will note the service has the look and feel of AT&T wireless).
TDMA has advantages over analog cellular technology, including: increased call capacity; higher quality voice transmissions with fewer dropped calls; longer battery life, secure voice transmissions; and, the ability to support enhanced features and more versatile product offerings.
When it comes to building its technical infrastructure, Industar is traveling first-class. Alcatel is the number one switch provider in the world, and Hughes is a leader in base stations. And, then there’s the roaming agreement with AT&T.
“We want to do this one more time,” Rao says of his stated intention to franchise Industar, “and I think we can.
“We have come a long way, and we are close to turning the system on,” he adds. “And, we have placed a big emphasis on putting the right people in the right place.”