Amid layoffs, Federated retools private wireless focus

Federated Wireless confirmed to Light Reading it conducted a round of layoffs in an effort to focus more carefully on the near-term growth opportunities in the private wireless networking space.

"We did have some staff reductions," said Federated Wireless CEO Iyad Tarazi. "It was measurable."

Tarazi declined to provide specific numbers. But a source close to the company suggested Federated eliminated a few dozen positions, bringing its total headcount down from around 130 to less than 100.

However, Tarazi said the layoffs aren't part of a change in strategy. "I'm still very bullish on the [private wireless] segment and the opportunity," he said, noting that it's important for smaller companies to remain flexible and agile in a market that's still developing. "These kinds of adjustments are necessary at this stage."

"Our business is still strong and growing," he added. Federated got its start offering spectrum management services for the 3.5GHz CBRS band, and has since expanded into the market for private wireless networking services. Tarazi said Federated's sales pipeline totals $100 million, and that private wireless products and services account for much of that.

Refining the targets

Tarazi explained that Federated's early private wireless networking strategy involved a broad marketing and sales campaign that covered all kinds of business verticals. But some of those verticals are developing into real sales opportunities more quickly than others. Those findings are at the heart of Federated's layoffs.

Specifically, Tarazi said Federated has found early traction among some federal, state government and higher education customers. Some of the company's announced customers – including a Marine Corp. base in Albany, Georgia, and California Polytechnic State University in San Luis Obispo – reflect that traction.

Meanwhile, other verticals – including retail, healthcare and other sectors that require significant IT resources – haven't developed as quickly. Tarazi said Federated plans to return to some of those verticals later this year, or early next year, as they develop.

"They're not moving as fast," he said.

A broader trend

Tarazi's comments dovetail with those from others in the space.

"Regarding private wireless, we agree that it is taking a bit longer than some had expected to move above the noise," wrote analyst Stefan Pongratz, of research and consulting firm Dell'Oro Group, in response to questions from Light Reading earlier this year. He said revenues from private wireless 4G and 5G networks accounted for less than 1% of the overall radio access network (RAN) market in 2022.

"The adoption curve [is] a little slower than maybe we would have liked," agreed Verizon's outgoing CFO Matt Ellis in comments earlier this year.

Similarly, Omdia Principal Analyst Pablo Tomasi recently told Light Reading that private 5G networks are being deployed for mining applications and ports, but verticals such as manufacturing have been slower to develop. Omdia and Light Reading are both owned by Informa.

Regardless, a number of players in the space continue to see major growth in the private wireless networking space over the long term. For example, Ericsson recently joined Nokia in targeting the market directly, rather than through partners.

Meanwhile, companies like Cisco, Dell and Amazon Web Services (AWS) are jumping into the space. Hewlett Packard Enterprise (HPE) recently announced it purchased Italian startup Athonet in order to get into the private 4G and 5G business.

Related posts:

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano