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Ricochet Rides Again

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LR Mobile News Analysis
Light Reading
8/16/2002
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It lives! U.S.-based high-speed wireless data pioneer Ricochet Networks Inc. is back. The company has just launched in Denver (see Ricochet Relaunches in Denver) and plans to go back on the air in San Diego soon.

However, Ricochet is no longer styling itself as a wireless network for mobile professionals. "The users weren't mobile… you could own 1,000 percent of the mobile business market and still go bankrupt," snorts Ricochet's new president and CEO Mort Aaronson, talking about Metricom, the defunct previous owner of Ricochet, and its flawed plans to provide Internet on the move.

"We've retooled the business model," explains Aaronson. "We want to provide broadband where the other guys can't."

Starting in Denver, Ricochet will offer wireless Internet access at speeds of up to 176 kbit/s to the customers in the pockets (and they can be pretty big pockets) that aren't served by the major cable and DSL providers.

To go after this market, Aaronson has addressed some of the problems that led to Ricochet's downfall in the first place. The major problem being that the service was way too expensive. Metricom used to charge $375 for the modem and $70 a month for unlimited Internet access [ed. note: doesn't seem so bad now that some of the major carriers are charging $100 a month for a similar but slower service, does it?].

The Ricochet modem is now $100, and unlimited monthly access costs $45.

Aaronson says that Ricochet will also make it easier for people to actually get the service if they want to. This time out the gate, he says, the company will sell broadband services in partnerships with "large ISPs" and consumer electronics and wireless shops.

So what happens after Denver and San Diego? Ricochet is in negotiations with landlords and leaseholders in the 21 markets across the U.S. where Metricom installed its equipment; however, the new Ricochet is proceeding more cautiously than did its tarnished predecessor, which pulled in $500 million in funding but spent nearly $1 billion rolling out its service before shutting down the network in August 2001.

"We need every business to be cashflow positive," Aaronson says.

However, using wireless instead of DSL or cable isn't a new idea. Startups such as MeshNetworks Inc. and SkyPilot Network Inc. have been working on such technology for a couple of years now. Aaronson doesn't feel that shorter-range mesh networking technology using 802.11b and the like is a competitor, since Ricochet's equipment can blanket a city. Still, Ricochet is going after exactly the same market that Nokia RoofTop and some startups are targeting.

Ricochet's MCDN (Micro Cellular Data Network) is based on a digital packet-switched system that uses spread-spectrum radio frequency transmission, a mesh network architecture, and a 2.4GHz radio on the client device, the same type of radio used in 802.11b cards. Aaronson says the company will have some "interesting announcements" about combined Ricochet/WLAN products down the road -- as well as the 100,000 MCDN modems currently sitting in the warehouse.

Ricochet is a subsidiary of holding company Aerie Networks Inc.; it is backed by VantagePoint Venture Partners.

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com

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