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IPWireless's Stuck Record

Light Reading
LR Mobile News Analysis
Light Reading
4/23/2003

Alternative universal mobile telecommunications system (UMTS) equipment provider IPWireless Inc. is once again making brazen claims about its current market standing, asserting that its kit is currently in trials with ten of the top 20 mobile carriers worldwide.

But yet again, the startup can’t name the suspects, nor provide any clear indication of when any of these customers will be announced. Marketing director Mark Pittick nevertheless assures Unstrung that the list includes "all the major carriers in Europe – the tier one guys."

IPWireless has been touting deals with unnamed European operators since last September but has yet to officially announce any of these top-tier contracts (see IPWireless Flies the TDD Flag, IPWireless Does Mobile 3-Step, IPWireless Fattens Its Wallet and Showtime for IPWireless ). So far, the company’s biggest success is with New Zealand's Walker Wireless, where high-speed data services are set to be provided in Christchurch, Wellington, and Auckland (see IPWireless Walks New Zealand).

All this talk has left some in the industry wondering exactly when IPWireless will make good on its words with actual contracts. "I have a hard time believing it's going to happen anytime soon," says Phil Marshall, program manager of mobile and wireless technologies at Yankee Group. "I think its going to be some time before they get going, and W-CDMA [3G UMTS rollout] has been slow to take off in Europe anyway." Branding itself as an alternative wireless data infrastructure vendor, IPWireless is attempting to court carriers with its high-speed time-division duplex (TDD) data system, which conforms to UMTS standards but – unlike standard cellular systems – uses unpaired spectrum, sending and receiving data on one channel rather than two. Most European 3G license holders were allocated a tranche of TDD spectrum when they bought the standard license.

IPWireless reckons that carriers can deploy its hardware and software for one-sixth the cost of building out a full frequency-division duplex (FDD) 3G network (the standard offering from the likes of LM Ericsson [Nasdaq: ERICY], Nortel Networks Corp. [NYSE/Toronto: NT], Alcatel SA [NYSE: ALA; Paris: CGEP:PA], Nokia Corp. [NYSE: NOK] and Siemens AG [NYSE: SI; Frankfurt: SIE]), and provide revenue-generating data access services across a wide area at speeds up to 4.5 Mbit/s.

Such boasts, however, could be setting the company up for a fall – especially if it fails to turn up any real contract wins. According to Andy Fuertes, senior analyst at Visant Strategies, concern remains over the ability of carriers worldwide to stump up the initial capital for the infrastructure. On the other hand, he is impressed with the startup's progress. “The ten major operators testing their products suggest that there is dissatisfaction with the existing solutions provided by the more traditional vendors.”

IPWireless's Pittick claims to have closed the company’s first European deal already, and he expects to announce that customer’s identity in “the next month.” Surprisingly, though, it won’t be a wireless carrier: “It is a player that required 2.5GHz spectrum rolled out across its whole country,” says Pittick. “It is in one of the top European markets.” In light of the company’s recent OEM deal with Alcatel, France seems a likely possibility (see IPWireless Gets French Kiss).

The company is also banking on the arrival of notorious ex-Global Crossing Holdings Ltd. CEO Jack Scanlon as a springboard to success. While not directly involved with the well-publicized debacle at the carrier – for those who have been hibernating, the company filed for Chapter 11 bankruptcy protection in January 2002 after amassing $12.4 billion in debt (see Global Crossing Falls Overboard) – Scanlon's placement on the board of directors is sure to raise a few eyebrows among industry watchers. Scanlon himself has high hopes for the business, claiming that he expects IPWireless to become a "household name" in the future.

Better make good on those leads, then.

— Justin Springham, Senior Editor, Europe, Unstrung

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