Declan Ganley isn’t the international man of mystery that some people would have you believe. He opens the door of his 18th Century Moyne Park stately home with a smile, as Benji the dog bounces around. There aren’t armed heavies or people in uniforms. It’s just a family home. A big one. With a fountain and a Rolls Royce out the front.
It’s all the fruits of some daredevil coups in Russia and the Baltics countries during his 20s. And if his terrifically clever Rivada Networks business realises its potential, it’ll be his biggest coup ever.
Wearing a natty blue suit and matching tie, Ganley is much taller than he seems to be on television. For a man whose family has lived in the Glenamaddy-Dunmore-Tuam area for thousands of years, he’s got a strong Watford lilt. Ganley was born in London but moved back to the west in 1980. “I never lost the accent for whatever reason,” he says.
He grabs a big, fat cigar from a box in the billiards room before scooping up some San Pelligrino lemonade and going into the wood-panelled study, past one of the biggest televisions on the planet. The painting above the study fireplace is of the Mayfair restaurant when he first met his wife Delia. He’s a bit of a romantic. Albeit one who works deep in the US military industrial complex. The books range from the Dangerous Book for Boys (four kids aged from 12 to 19) to the Who’s Who and a history of Italian artist Correggio. He’s an inveterate reader.
Ganley’s business and his background has been the subject of some colourful rumour and speculation. He wants to put the record straight. It’s quite a story.
“I worked in a meat factory in Ballyhaunis one summer. I was a vegetarian that summer. I wouldn’t even eat butter at the end of it,” he laughs. It’s a boomer of a laugh.
But there were also early signs of entrepreneurial flair. He set up a stall at Dunmore selling turf when still a teenager. “I got there at oh-dark-thirty to get the best pitch,” he says, as he sparke up his cigar with a match.
After school, he emigrated to London and got a job on a building site. Answering an ad in the Evening Standard saw him become a “tea boy” at a shipping insurance broker Furness Houlder.
Making tea was obviously quite secondary, as Ganley started to pitch innovative ideas to the partners including one to insure western satellites being launched into space on Russian rockets. He was asked to flesh out the idea and spent the next day going through the phone book looking for Soviet trade contacts. It didn’t fly but he was asked to organise a trade delegation to Moscow in January 1988. This led to the creation of a metals and ceramics exhibition in London in June 1990, which he hosted in the Institute of Metals.
Through his new contacts in Russia, Ganley arranged for small export shipments of aluminium out through Latvia.
“I got to know the guys on the Latvian side of the equation. They were all in the Latvian Popular front,” he adds. When Latvia became independent in 1991, they suddenly found themselves in power.
“These were my mates. We’d all made a few quid together,” he says. Ganley had also arranged for political posters and pamphlets to be printed up in Sweden and smuggled back into Latvia. That gave him real credibility with the new rulers.
The new government appointed him as a foreign economic affairs adviser.
“It was real seat-of-the-pants stuff. How do you set up a new country? Nobody had any idea how to do this. We were all so young.”
It was pretty clear that Latvia needed foreign currency though. Ganley helped set up a scheme to export timber to the UK.
“The first effort wasn’t very successful because we didn’t know what we were doing.” It was undocumented and untreated wood and ended up being destroyed.
However, a large UK timber broker told him that if they could properly document and treat the timber, he’d buy as much as they could deliver.
“We were just the middlemen. I wanted to move into the ownership side,” he said. “So we ended up moving into north west Russia and doing the privatisation of 28 saw mills and wood processing plants,” he says, before searching for matches to relight his cigar.
Ganley’s new base of operations was in the Volgoda Oblast, primarily because it was close to the Baltic ports and timber could be transported out of Russia easily. Ganley is evasive on the details of the buyout in the early Nineties.
“It was cheap,” he admits of the price of the assets. “Yeah, tens of millions over the course of a few years.” He flew to New York and raised money from seasoned emerging markets investors including George Soros, Croesus Capital and Rothschild. “They were very interested and they backed me,” he says.
Bazillions of Russian assets were being sold off on the cheap as the new breed of oligarchs was created in Russia. It was a risky but exhilarating time. The business took off and soon after, he received a number of approaches from potential buyers.
“George Soros’s team approached me and we ended up doing a deal with them.” It was a lucrative exit – but not one he’ll go into details about. “It was enough to be able to do other things.” He was just about 29 years old at the time.
“But I’m not a billionaire or anything like it,” he says. “Money isn’t what makes me tick. It isn’t my focus. It’s the challenge. It’s a hunger and it’s a genuine pursuit for nobility of purpose – and that may sound corny – but that’s it.”
There were no mad punts on property during the boom. He paid for his house in cash back in 1995. The most he’s ever gambled on a horse is €20. And he felt bad about it.
“There’s no football club or yacht in my future. There are some things that I’d never do… no matter what.”
There could have been multiple billions though. “I had a chance very early on to privatise Severstal. I had that chance but I was a 20something-year-old idiot.”
Severstal is now Russia’s biggest steel company, with sales of $14bn per year. Owner Alexei Mordashov has a fortune of $18bn.
“The collapse of the Soviet Union was the most formative moment of my life – outside family – because you knew that after this, anything was possible, politically, economically, in business or anything. All of the rules had changed.”
This has been one of the key principles of the entrepreneurial engine that drives Ganley. Anything is possible. Everything changes.
Later as we hurtle down back roads in his 1972 reconditioned Irish Army Land Rover – he without seatbelt and me gripping on to the side of my seat with both hands – he describes his role in the company as being an innovator. He’s an ideas guy. Maybe his physics aren’t always right but his team – some of the smartest people in the room, according to a New York financier who talked to me later – are able to put manners and order on his thoughts. That is one of his great skills, according to one financier. “He’s put together a team of really incredible people and they all want to work with him.”
Outside timber, Ganley was also moving into telecoms, broadband and television. He’d always been interested in communications ever since spending summers in rainy Achill with a radio enthusiast uncle.
He set up a business providing staff to the fledgling mobile phone operators including the tiny Newbury-based Racal Vodafone (which would become the €90bn Vodafone). Again, the entrepreneur realised that he needed to be an owner to make money. He hooked up with US telecoms giant Comcast in an unsuccessful bid for Ireland’s second mobile phone licence – which was won by Denis O’Brien’s Esat.
“Although we hadn’t been successful, we had put together a team that really knew their stuff, so went went to look at other opportunities,” he says.
Ganley narrowed down his options to focus on the niche fixed wireless space.
Comcast backed him in creating a new enterprise called Broadnet which hoovered up licences across Europe, winning licences for 42 big cities in Germany, as well as France, Spain, Switzerland, the Czech Republic and five other European countries. Comcast invested close to $400m in helping roll out these broadband networks across Europe, before buying Ganley out in three tranches in 1998, 1999 and 2000.
“I had around 40 per cent. They made it worth my while.”
He was also elbows-deep in a cable television business in Bulgaria, which mopped up smaller stations and created a giant fibre optic ring.
There was even a wheeze to privatise a new voucher scheme that the Government was planning as part of a strategy to sell off State assets. It didn’t happen. Another play saw him try to buy a mobile licence in Iraq. But the country was way too corrupt.
And then 9/11 changed everything.
Ganley’s wife Delia’s family had a business in the World Trade Centre. Other family members were in the New York Fire service. They made it out all right. But it was close.
The staggering revelations that the fire fighters hadn’t been able to talk to the police or to the ambulance services because of useless communications equipment stuck with Ganley.
“My brother-in-law told me about the systems failing. I was really shocked and angry and wanted to look into it to see if there was a way to make a positive difference to public safety communications,” he says, flicking ash off his trouser leg.
He leaps out of his seat to take out a well-read copy of the 9/11 Commission report. It highlighted the failings of emergency services radios and other communications equipment.
“I knew the potential for communications with broadband. The inspiration for Rivada came out of 9/11.”
Getting the police or Federal Emergency Management Agency or the ambulance services to be able to talk to each other took him into the sphere of the US military.
US North Com (North Command) was established following 9/11, and quickly saw the need to communicate with disparate public safety agencies across the country. Public safety communications needs a certain chunk of bandwidth or radio spectrum in times of emergency. Like when Godzilla wakes and wreaks havoc. That bandwidth is unused for the rest of the time. As commercial radio waves reach saturation point, this public safety bandwidth could be used for everyday business.
This is where Ganley comes in.
Rivada developed a secure communications system that was bulletproof in times of crisis. When Hurricane Katrina smashed into New Orleans in August 2005 Ganley was ready to roll. He borrowed a private jet, ripped out the seating and flew into New Orleans and worked around the clock setting up the Rivada networks. Two days after the hurricane hit, the emergency services were using his technology to talk to each other.
Weeks later, when Hurricane Rita hit, the emergency services were ready. They were tooled up with Rivada kit and communications was never an issue.
He vanishes off to another room and returns to show me a citation from the Louisiana National Guard. Rivada saved lives. Rivada was very definitely inside the tent now.
Operating in this space means that Rivada has had to cultivate close links with the US military – but more so with the emergency response and public safety sector. Its board includes Michael Jackson, the former deputy secretary of US Homeland Security, Lord Guthrie, the former British army chief of staff, General Richard B Myers, former chairman of the US joint chiefs of staff and Admiral Jim Loy, another former Homeland security high-ranker.
While Rivada was solving the problem of how to ensure working communications during major disasters, Ganley also realised that prioritising access on networks was incredibly important.
What would happen if a Kimye twitter storm or thousands of people downloading Game of Thrones was slowing up the bandwidth for the emergency services just as a meteor struck? What if there was a way of prioritising access to bandwidth? This was the game-changer.
“Rivada is the answer to how do you commoditise the world’s latest great natural resource shortage,” he says, getting up to open a window. The smoke is so thick, we can barely see each other.
“Rivada Networks’ technologies enable public safety agencies to retain absolute control over their own dedicated broadband networks, while enabling the generation of valuable revenues from unused capacity, when available,” according to the company blurb.
The technology, protected by a wall of patents, is called Dynamic Spectrum Arbitrage Tiered Priority Access or (DSATPA). A cooler name might be good. It’s head-exploding stuff but it enables radio spectrum owners – be they wireless operators, the US defence sector (one of the biggest hoarders of underused bandwidth in the United States), or television firms – to use the asset far more efficiently by renting it out whenever the Russians aren’t invading or a sea monster isn’t laying waste to the eastern seaboard.
And users pay for priority access, which is a huge potential money-spinner for the owner of the spectrum.
Rivada aims to incorporate its innovative bandwidth management tools into a vast public safety network across the United States. It may cost between $300m to $500m per state to build – but the players on Wall Street are already scratching each other’s eyes out to fund the project.
A legislative hurdle has been cleared and if financing and construction goes to plan, the first of these statewide networks could be up and running in two years’ time.
The revolutionary concept of trading big chunks of spectrum has got Wall Street very excited. The future potential of this platform is enormous and goes well beyond public safety spectrum to any 4G bandwidth – anywhere in the world.
While the plan is to roll out the technology in the US first, a global expansion is clearly on the cards. Assuming it gets adopted and takes off.
“Why wouldn’t anyone do it? Unless they were North Korea and are obviously insane.”
Ganley is a major shareholder in Rivada, with about half of the company. Camera-shy US and European institutional shareholders own the rest of the equity in the business. He has absolutely no plans to sell out – the business hasn’t even scratched its potential yet. However, an IPO is a possibility.
“You don’t rule anything out. We’re driven by the mission of getting it done. We’ll use whatever tools we need to access markets or whatever. We’ve had people knocking on our door, doing the Dance of the Seven Veils.”
Rivada has raised around $80m from investors including Ganley, who put in a “few million” at the beginning. It recently raised $7m in a fund-raising round.
One US hedgefund principal, which talked to the Sunday Independent on condition of anonymity, said that Rivada had racked up a valuation of $500m.
With hedgefund, institutional backers and other money managers falling over themselves trying to hose tech companies with cash, valuations have gone utterly mental.
Taxi rental firm Uber is the latest to attract an epic number, with a $17bn valuation.
“Is this bigger than dynamic taxi pricing like Uber? I think it is a bigger deal. I think bandwidth is in more demand than taxis.”
If he’s right, he may need to start thinking again about buying that football club.
‘There’s no sport more exhilarating’
My greatest indulgence is… “reading. I love it – it’s the only way I know that you can borrow somebody’s brain. I also do a bit of clay pigeon shooting out the back.” That’s out back of his Tuam estate.
My favourite bit of technology is… “my Blackberry. I just love them. This is the one with the keyboard.”
The last meal I really enjoyed was… “at home. Delia [his wife] knocks up the best southern Italian cuisine in the world.”
The recent holiday that I most enjoyed was… “in Italy. We’ve just gotten back from a wedding in Tuscany.”
The last music I downloaded was… “I love all kinds of music. Anything from jazz to classical music or traditional music.” He also plays the guitar a little.
The books on my bedside table are … “a book on Descartes and ‘European Spring’ by Philip Legrain.”
My favourite sport is… “business. There’s a real sport in business, a real contact sport. There’s no more exhilarating sport than this stuff.”