CNBC Business | Declan Ganley

Declan Ganley

Declan Ganley’s astonishing rise shows a flair for locating the next big idea and then creating the market conditions for take-off. By Richard Lofthouse

Having made friends in Latvia, the trans-shipment hub for the metal, Ganley supported the campaign for Latvian independence. He was rewarded when it duly came in 1991 with the post of foreign economic affairs adviser, “which I had no qualifications for”. Initially charged with generating foreign currency revenue through oil export, Ganley instead looked at Latvia’s vast forestry resources, and from there, with government backing, he built the largest privately held forestry company in the former Soviet Union, with over 6,000 employees. That was between 1991 and 1997, when Ganley sold his interests, called Kipelova Forestry Enterprises, to Renaissance Capital and a consortium of investors for a sum that he won’t reveal. It was his first big win and gave him deep pockets for subsequent ventures.

That was when Ganley returned to his long-term interest in telecommunications. He gathered a new management team around him in 1994 in order to bid for the second GSM licence in Ireland, which was finally awarded to a different consortium in very controversial circumstances, still the subject of an ongoing government investigation. It went for £5m (€7.3m) and was subsequently sold for £2.2bn to British Telecom a few years later, and would have made Ganley his first billion. Undeterred, he held on to consortium partner Comcast and started buying up radio spectrums in order to wirelessly deliver broadband content over “the last mile” in cities all over Europe.

This company he called Broadnet. At a time when many telco experts still thought “the last mile” would be covered by underground cables, Ganley believed that it could be done wirelessly. As in previous situations, he was ahead of the learning curve, except that this time he had Comcast behind him and Comcast had deep pockets. They proceeded to snap up bargain radio spectrums across 10 European countries and most of the leading European cities. The spending spree didn’t end up with a massive broadband subscriber base and massive income, as Ganley had no doubt hoped. Instead, Comcast bought him out for €50m and he took the cash, hungry for a new opportunity.

His next move was to go further east in search of another telco killing, looked hard and saw the potential for the consolidation of cable operators in Bulgaria, a business he built between 1998 and 2002 and sold for approximately €18m.

Rivada Networks were called in to help emergency services communicate in the wake of Hurricane Katrina A portrait emerges of a man almost constantly scanning the horizon for the next big idea, or for undeveloped markets where a proven idea might fly but for “seemingly insurmountable shortand medium-term challenges”, as he puts it. His most significant “other enterprise” is currently Capital Route, a major attempt to create a pan-European executive drive/chauffeur drive enterprise, consolidating a €40bn a year industry in Europe alone, and one in which recognised, cross-border operators are virtually non-existent and standards atrociously low.

That leaves Rivada, which looks like the successful sequel to Ganley’s brush with the US military back in 1988. The Rivada case study can be summarised in two lessons for would-be entrepreneurs: first, that to get the really big guys to sit up and take notice, by which we mean President Bush and his security advisers, make yourself utterly relevant to the biggest question of the day. Just as Ganley turned to metal importing as the Soviet Union cracked up, this time he turned to security in the immediate aftermath of 9/11.

The second lesson is the “how to” of “making yourself utterly relevant”, which in this case meant getting giant people on your board. Think John Kelly, recently retired President of Bell Textron, the global defence powerhouse, and Admiral James Loy, former head of the US Coast Guard and Acting Secretary for Homeland Security, plus three-star Marine General Dennis McCarthy, Former Head of all US Marine Forces in the continental US.

Ganley adds, in case of doubt: “Now these guys aren’t decorative board members. They’re roll-up-your-sleeves, get-stuck-in; they’re as executive as any non-exec ever got. They’re very, very good, fantastic, hands-on men.” That’s partly how he was awarded his first big Rivada contract in 2004, to design, deploy and operate a communications system for US Naval Command.

Not content with that, Ganley surveyed the US for weaknesses in the face of terrorism and generated a disaster scenario document that focused on the vulnerability of the New Orleans levee to terrorist attack. In an exact facsimile of the SOVMAT90 exhibition he had held 15 years before, Ganley then organised a high-powered conference, the Forum on Public Safety in Europe and North America, which he co-hosted with the University of Limerick.

Ganley’s timing was breathtaking. The conference took place two weeks after the July 2005 terrorist bombings in London and just over a month before Hurricane Katrina hit the US Gulf Coast. Whereas elements of an emergency communications system were timetabled for US Gulf State implementation in 2006, the disaster Ganley had prophetically mooted hit suddenly and without the helping hand of terrorists. This was when Senator Landrieu summoned Ganley, and how he ended up eating MRE rations in a Baton Rouge trailer while handing out thousands of handsets to emergency personnel.

Ganley presented his business case to all 15 core EU states in 2005 and envisages an interoperable, cross-border system linking all services together. So far, his main prospect is the Irish government. Behind Ganley’s vision, a simple lesson he learned amid the Irish Troubles of his teenage years, that “the single best resource that a terrorist has is not his weapon, or a mobile phone: it’s a border… Borders are to terrorists what the fog bank was to 18th-century naval warfare: you want to get in that fog bank and disappear.” Secure wireless networks that transcend national borders are his solution to that problem.

Last month, Rivada was on the verge of major new contracts with the US Department of Defense, worth potentially hundreds of millions of dollars, and Rivada was estimated to be worth €180m–€250m as a going concern. Ganley could be entering the lists of billionaires before his 40th birthday – yet he laughs it all off, in thrall to ideas more than he is to money, which let’s face it, is only as interesting as the work it is put to.

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