Cell-Loc hopes to move into beta tests this summer for digital versions of Cellocate

Cell-Loc Inc is continuing to develop and test digital versions of its Cellocate wireless location technology while it rides out the telecommunications market storm. The company is in alpha trials of its CDMA version with Telus Mobility and hopes are that both it and the GSM-based Cellocate system will move into beta tests this summer. "The pursuit of a digital solution is front and centre to our strategy and in fact it is our strategy," says Cell-Loc COO John Krpan. He likens the eventual transition to all digital national location networks from current analog versions to the booster rockets on the space shuttles. "They’ve served their purpose but will slowly fall away once we reach orbit." There’s still no word on which wireless carrier will sign up to test the GSM technology. "This fall we’ll have working networks for GSM in a number of areas," says Krpan. "We hope to have commercial operations early in the new year." The company is still years away from meeting its objective of building out national wireless location networks. That plan was put on hold following the downturn in the capital markets which quashed any hope of securing additional financing to fund network expansion. Even a recently secured $40-million line of credit isn’t nearly enough to expand its network beyond the two existing ones in Calgary and Austin TX. Since the meltdown of the capital markets last year, the Calgary-based company has taken a wait and see approach to building a national location network, saying it will only proceed on a city-by-city basis if a business case can be made (RoW, March 19/01). Telus best hope for digital system The company’s best hope for securing a long-term revenue stream is Telus Mobility, which has already purchased an analog Cellocate system. With the western-based WSP testing the CDMA iteration, Cell-Loc stands a good chance of landing Telus as the first customer for its digital system. But according to Krpan, it’s still too early to make any assertions on whether Telus will become a customer for the CDMA system. "(I) can’t speculate on whether they’ll sign up as a partner, but clearly if a business case exists we’ll address it with them," he says. Short-term revenue potential remains strong Last month, the location technology provider signed an agreement with Asset Trax which will net Cell-Loc about $2 million in licensing fees and royalties. No timeframe on revenue was provided in the release. "This is the tip of the iceberg for the asset tracking market and is a leverage point for Cell-Loc to expand not only to other cities but to other areas of asset tracking through larger partners," explains Krpan. Market research analysts predict the total location-based service industry will reach about US$7 billion annually by 2004 and Cell-Loc executives are optimistic they can capture a significant portion of that business. If the company is able to duplicate its two existing wireless networks in Calgary and Austin TX in 60 major North American cities covering 150 million people, Cell-Loc estimates it can generate $450 million in licence fees alone. "If we doing nothing else but sell licensing agreements in these cities for various forms of tracking, we would have approximately $3 million of revenue for every one million people in an urban environment," Krpan explains. "While this is not the primary focus of the company, it demonstrates the viability of the technology and the company’s business plan."

Cell-Loc hopes to move into beta tests this summer for digital versions of Cellocate

News | May 28, 2001

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