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Comms chips

Kineto Grabs $35M

Voice-over-wireless LAN (VOWLAN) startup Kineto Wireless Inc. has scored $35 million in a third round of venture funding as it attempts to get equipment vendors and carriers to adopt its technology.

Kineto has developed a VOIP system it calls "MOWLAN" that the company says will deliver voice over cellular, wireless LAN, and Bluetooth networks and allow operators to cut the cost of calls.

To do this, Kineto has created voice and data management boxes that sit in an operator’s core network and client software that allows phones equipped with cellular and local area wireless chips to smoothly hand off between the different networks (see Kineto: No QOS Required?). According to the firm’s CEO, John O'Connell, setting a standard for the implementation of the firm’s handset software is key for Kineto. The startup has been working with the 3rd Generation Partnership Project (3GPP) and other vendors to shape a standard.

"We have been working on a set of specifications with operators and vendors,” says O’Connell. “They will be finished in the next two months. We expect vendors to implement this by the last quarter of this year.” O’Connell expects commercial deployments to follow in 2005.

Kineto says it already has trials underway with a major operator in the U.S. and two in Europe. O’Connell isn’t prepared to name the operators at the moment but adds that the firm did have a trial with AT&T Wireless Services Inc. (NYSE: AWE) that is no longer continuing.

O’Connell sees LM Ericsson (Nasdaq: ERICY) as Kineto’s main competition in this market. "In most of the commercial business we go after we find ourselves competing with Ericsson," he says.

Perhaps it is no surprise that the firm has today appointed former Ericsson president and CEO Kurt Hellstrom to its board of directors. "We wanted somebody who has global experience of implementing technologies. He could see the natural extension of taking the mobile industry and being able to roam onto WiFi networks."

So far, Kineto has gathered nearly $60 million in venture funding, enough to take the company through to the launch of commercial services, according to O’Connell. Oak Investment Partners led this round of funding.

— Justin Springham, Senior Editor, Europe, Unstrung and Dan Jones, Site Editor, Unstrung

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