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Speakeasy Plots WiMax Move

Light Reading
LR Mobile News Analysis
Light Reading
8/25/2004

Broadband service provider Speakeasy Inc. is preparing to jump on board the WiMax bandwagon, following an undisclosed “strategic investment” from the VC arm of market stalwart Intel Corp. (Nasdaq: INTC). (See Intel Invests in Speakeasy.)

At present, Speakeasy provides ADSL and 802.11 services in 120 cities across the U.S. (see Speakeasy Shares WiFi). Founded in 1994 as one of the world’s first Internet cafes, the Seattle-based company has raised approximately $50 million in funding from the likes of 3i Group plc and BV Capital and claims to have hit profitability in March last year.

Today’s investment from Intel Capital will provide the catalyst for future services based on WiMax technology. “We see WiMax as a very strategic initiative for our company,” CEO Bruce Chatterley tells Unstrung. “We are going to be testing the technology towards the end of this year and beginning of next in a variety of markets. Based on the results of those trials you will start to see announcements on our go-to-market strategy.”

Chatterley is unable to confirm which areas it is targeting for WiMax rollout, but states “it’s fair to say we would focus on the eight to ten largest metro areas in the U.S. We don’t see WiMax as a rural opportunity for us.”

Based on the technical specifications developed by the Institute of Electrical and Electronics Engineers Inc. (IEEE) wireless MAN 802.16 Task Group, WiMax is an emerging technology that aims to deliver last-mile broadband connectivity over a larger geographic area than wireless LAN hotspots.

In June, the IEEE ratified 802.16d, intended for fixed wireless applications (see WiMax Spec Ratified). To meet the needs of mobile users, a further extension -- 802.16e -- is under development and is touted for ratification in the third quarter of 2005.

“Users will be able to take their Speakeasy service wherever they go,” adds Chatterley. “In 2006, 2007, when WiMax goes mobile, we see the technology as becoming a really significant opportunity for a company like us.”

— Justin Springham, Senior Editor, Europe, Unstrung

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