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Startups Rescue Hotspots

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LR Mobile News Analysis
Light Reading
10/28/2004

The failure of public access wireless LAN to become a serious revenue generator has spawned a whole school of startups attempting to salvage the wobbly 802.11 hotspot business, according to the latest edition of Unstrung Insider.

The report -- "Metro-Zone 802.11 Wireless" -- claims that a number of companies are helping breathe life into the ailing hotspot market by extending the coverage of today’s isolated and widely distributed hotspots to provide more pervasive and broadly available services.



Author Gabriel Brown identifies two main approaches being adopted in the deployment of metro-zone 802.11 projects: point-to-multipoint systems and mesh-based systems.

Small fry such as Colubris Networks Inc., Radionet Oy, Vivato Inc., and 5G Wireless Communications Inc. (OTC: FGWC) are battling incumbents Cisco Systems Inc. (Nasdaq: CSCO) and Proxim Corp. (Nasdaq: PROX) in the point-to-multipoint system market -- products that operate with wired backhaul in traditional point-to-mulitpoint mode and use high-gain, directional antennae to increase coverage.

Another approach to extending the range of 802.11 is to deploy access points in a mesh configuration, where each device acts as a network node and sometimes as an access point, usually with auto-discovery and self-healing software built in.

The biggest of these startups are BelAir Networks and Strix Systems Inc., while Firetide Inc., Tropos Networks, and a number of other even smaller vendors are growing fast.

“Combined with industry trends such as wireless VOIP, bundled WiFi services, mixed-use public and private networks, and the emergence of specialist roaming brokers, this new breed of equipment could take the hotspot sector to a whole new level,” argues Brown.

The table below summarizes information about the key public-access infrastructure startups:

Table 1: Public Access & Metro-Area 802.11 Startup Funding

Vendor Founded; Location Funding to Date Value & Date of Last Round
BelAir Networks 2001; Kanata, Ontario $24M $15M Series B, Dec. 2003
Colubris Networks 2000; Waltham, Mass. $21M $13M Series C, March 2004
Firetide 2003; Los Gatos, Calif. $18.8M $15.8M Series B, Aug. 2004
Radionet 2000; Espoo, Finland �6M ($7.65M) �3M Series B, Oct. 2002
Strix Systems 2000; Calabasas, Calif. $34M $15M, Oct. 2003
Tropos Networks 2000; Sunnyvale, Calif. $13.5M $8.3M Series C, Feb. 2003
Vivato 2000; San Mateo, Calif. $67M $44.5M Series C, June 2003
5G Wireless 2001; Marina Del Rey, Calif. Unclear (Auditor resigned in June 2004) $7.6M private placement, Sept. 2004

Source: Unstrung Insider


— Justin Springham, Senior Editor, Europe, Unstrung


Metro-Zone 802.11 Wireless is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,350. Individual reports are available for $900.
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