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Tahoe Trials With Finns

Wireless router startup Tahoe Networks says its GPRS gateway support node (GGSN) product is in trials with five operators in Europe and North America -- and Unstrung can exclusively reveal that one of those operators is Finnish carrier Radiolinja Oy.

The Finnish trial is focused on the delivery of new services, which will probably involve enabling picture messaging services for prepaid users and the like. In an official release that will hit the wires Wednesday, Joni Soukola, technology director of subsidiary Radiolinja Origo, which focuses on "up-to-date capacities… to implement wireless communications services" for the operator, states that Tahoe's "ability to support personalized services with integrated management and billing" will allow the provision of customized services for GPRS and UMTS. Radiolinja plans to launch 3G services in 2003.

However, there is no detail about the products being used or their capabilities. "We want to make more announcements before going into details about the product," says Tahoe VP of EMEA sales, Herve Liboureau (see Tahoe Goes to Paris).

Tahoe has positioned itself as a player in both the GPRS/UMTS and CDMA2000 markets with hardware and software for what it calls the "mobile Internet edge" to provide routing and advanced service functionality. It is one of a number of startups challenging incumbent vendors in this market (see Having a Flutter on the GGSNs). The wireless router products for the CDMA world are known as packet data service nodes (PDSNs).

Liboureau tells Unstrung that the principle near-term opportunity for revenues lies with the CDMA2000 1xRTT carriers, which are desperate for products to handle increasing mobile data session loads. "CDMA operators are facing legacy issues and need to replace the generic broadband aggregation boxes that have had mobility software added," says Liboureau. "there's pent-up demand there -- real revenue opportunities." Tahoe has had its product in trial with a CDMA operator in Asia since August (see Tahoe Talks Shop).

The GPRS players are more focused on future service creation issues, as they do not have high levels of concurrent data users at present, but they are looking to have something for their next-generation packet gateways "that is as scaleable as an MSC [mobile switching center] in the voice market."

Liboureau says Tahoe's other GPRS trial operators are in Europe and the U.S., while the U.S. is also home to CDMA trials. He does not expect any contracts from GPRS operators until at least the second half of next year, though. "The operators have a clearer view now of the data loads their networks will be handling next year, and some believe they will be handling millions of picture messages per day by the end of 2003, for example. If that happens they'll need the infrastructure to cope with that." He says it is these types of mass market services that are determining the network buildout strategies of the carriers -- because, although enterprise users are early adopters (good for early revenues and the source of most GPRS traffic now and for the coming months), the volumes that will stretch network capabilities will come from the consumer customers.

"Some carriers even believe they may see between 30 percent and 40 percent of their messaging revenues from picture messaging by the end of 2003. This seems a little high to me," he says, but he adds that it shows the ambitions and focus of the operators. As well as further announcements involving carriers in 2003, the former Cisco Systems Inc. (Nasdaq: CSCO) man (seven years there) says Tahoe will be announcing partnerships with major systems integrators and incumbent telecom infrastructure vendors, though he declined to name names. However, this would not be the first time the company has claimed that such relationships are imminent (see Tahoe Confirms Cutbacks).

Liboureau also says the company is not in need of any additional funding at present, despite talk earlier in the year of an impending "financial event," by the now former Tahoe marketer Alan Cohen. "We are not seeking cash at the moment, though there could be some future further investment, though definitely not at any low valuations."

He was also keen to dismiss the other wireless router startups as no-hopers, either from a financial or technical standpoint. Perhaps a little dangerous until Tahoe has the ink drying on some customer contracts.

Customer revenues in any volume may be a ways off for Tahoe or any of the other startups, according to a recent Wireless Oracle report, "Wireless Routers - A Market Waiting to Happen?" (see What's the Wireless Router Market Worth?). — Ray Le Maistre, European Editor, Unstrung

Editor's Note: Light Reading is not affiliated with Oracle Corporation.
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