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TowerStream's Seattle Speakeasy

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
1/30/2007

Enterprise-focused wireless broadband service provider Towerstream Corp. (Nasdaq: TWER) is expanding its service to Seattle by buying up the network assets of one-time rival Speakeasy Inc. for an undisclosed sum.

The move makes Middletown, R.I.-based TowerStream a unique player in the WiMax service provider market, since it is the only operator that currently offers T1-class wireless connectivity for business users in major markets such as New York City, San Francisco, Los Angeles, Chicago, Boston, Providence and Newport, Rhode Island, and now Seattle. Seattle, Wash.-based Speakeasy, which is a national small business-focused voice and data services provider, is one of a number of players offering similar wireless services to TowerStream's in a single marketplace. When it launched its Seattle network in May of 2005, Speakeasy said it would follow up with WiMax in eight to 10 of the largest metropolitan areas in the U.S. The company has now decided, however, to focus on its private fiber-optic national network services and resell wireless access through TowerStream to its business customers instead. (See Speakeasy Maxes in Seattle and Speakeasy Plots WiMax Move.)

TowerStream won't remain the only serious player in business WiMax connectivity in the U.S. for long, however. Sprint Corp. (NYSE: S) is planning to launch mobile WiMax services in Chicago and Washington D.C. late in 2007, with fuller nationwide connectivity planned in 2008. (See Sprint Picks Nokia for WiMax and How Is T1 Like a Pizza?) Enterprise offerings are likely to be a big part of Sprint's early WiMax push, since corporate users generally pay more for faster wireless data transfer and will get more use from initial PC card-based services for laptop computers. (See Motorola's WiMax Wait.)

Cash-rich startup Clearwire LLC (Nasdaq: CLWR) could also become more of a rival to TowerStream over the next year or two. Craig McCaw's latest wireless venture has so far focused on providing wireless cable-replacement type services to consumers in smaller markets in the U.S. The company is now, however, moving into larger markets such as Seattle and Portland and planning to offer mobile WiMax connectivity as suitable infrastructure becomes available. (See Clearwire Takes Another Cut at IPO.)

This Monday, TowerStream, which was founded in 2000, started publicly trading on the Nasdaq Over-The-Counter (OTC) Bulletin Board under the symbol "TWER." OTC stocks are not traded via an exchange but rather directly by traders using a computer or telephone. A successful company often uses OTC trading as a stepping-stone to a more formal listing.

— Dan Jones, Site Editor, Unstrung

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