Affordable in-building cell phone coverage gets a boost from SpotWave

An Ottawa startup is touting technical and cost advantages over the competition as it enters the burgeoning market for in-building wireless communications. Executives at SpotWave Wireless Inc say the debut of their first product last week marks a new generation of products designed to eliminate coverage gaps in office buildings and elsewhere. The company, which launched last May with just over $3 million in Canadian VC financing, is making its sales pitch to cost-conscious carriers struggling to reduce churn and expand their customer base. Though competitors such as Kaval Telecom Inc have been selling into the market for years (RoW, July 26/99), SpotWave execs say the main advantage of their SpotCell 100 product is the price. Steve Adams, SpotWave’s VP of marketing, says the product uses new smart antenna and adaptive algorithm technology, which greatly reduces the cost of deployment and additional maintenance charges. The Spotwave system can adapt to office environments without re-deploying hardware – even when human traffic changes or barriers such as walls are put up or taken down. That, says Adams, negates the need for costly upgrades, moving base stations or pico-cells. It also brings the system’s price into a viable range. Systems from competitors, he contends, can be prohibitive in the majority of office environments, where they can cost up to $100,000 to deploy. While those products can be cost effective in very large spaces such as arenas, casinos or 50-story office towers, Adams says wireless carriers won’t consider them for areas of around 20,000 sq-ft. Eighty per cent of office space in North America has less than that. The product is being targeted at carriers that are anxious to reduce their churn rate. Churn, a measure of the number of customers who either switch providers or switch off their phones permanently, is still costing Canada’s wireless industry up to 2.5 per cent per month. However, churn is just one part of a bigger picture as the carriers battle it out. "We’re not pitching to a carrier that we’re going to reduce your churn from 2.5 to 2 per cent. More importantly, we’re going to help them lock their customers into longer contracts, get their customers using their phones in places they can’t use them today. It’s more a focus on the positive message of driving the revenue growth, which is the real focus in their corporate accounts, more so than negative growth or churn," says Adams. While the overall telecom financial environment is challenging, he says the company has already received positive feedback. "You can view this as just a frustration that nobody will pay to make go away, but we’ve got extensive customer validation. Our focus has been on helping carriers make money doing this. Anecdotally, people see a 15-40 per cent increase in usage by deploying an in-building solution. That’s money for the wireless carrier… That’s a compelling proposition to our customers," he argues. "Our initial market focus, just as we ramp up, is North America, and we’ve done customer validation and taken orders from customers – respected carriers – on both sides of the border. We’re not releasing those names at this point. We’ll be doing separate customer announcements over the next several months." Eventually, he says, the company will also have a presence elsewhere worldwide. The company is also hoping to ride the crest of new data applications now coming onto the market. Recognizing that voice is still the primary money-maker for wireless companies, Adams says data and email received by web-enabled phones and devices such as Research In Motion’s Blackberry will become more important. Shane Young, Spotwave president and CEO, tells RoW that carriers that deploy the SpotCell can expect to recuperate their costs within a year simply through the additional voice minutes used by customers in locations where they previously couldn’t.

Affordable in-building cell phone coverage gets a boost from SpotWave

News | 10/02/2001 4:00 am EDT

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