Cell-Loc expands into Californian market; signs deal with major U.S. company

Calgary-based Cell-Loc Inc. has broken into a new market for its Cellocate Beacon technology by signing a major joint-venture agreement with a large U.S.-based firm to deploy and offer location services in California. The agreement follows on the heels of Cell-Loc’s earlier announcement that its Calgary Cellocate Beacon network is now commercially operational (RoW, June 24/02). It also signals a rebirth of sorts for the one-time struggling firm, which has recently put its house in order (RoW, March 18/02). Cell-Loc Putting its House in OrderJune 28/02 – Signs major deal to deploy Cellocate Beacon network in California June 28/02 – Sheldon Reid takes the reins of Cell-Loc (RoW, July 9/02) June 6/02 – IQ2 Communications commercially certifies Cellocate Beacon network (RoW, June 24/02) March 7/02 – Brazil-based PST chosen to manufacturer Cellocate Beacon products (RoW, March 18/02) Feb. 27/02 – Chongqing Cell-Loc Wireless Location Ltd. to manufacture CDMA cell phone location equipment (RoW, Dec. 11/01) Since the company is expanding into one of the largest economies in the world – some peg the Californian market as being the sixth or seventh largest in the world – revenue potential from this agreement is impressive. Cell-Loc president and CEO Sheldon Reid indicates that the potential revenue is "substantial" and adds that this is the largest commercial agreement the company has entered into. Reid is cautious, however, and won’t indicate whether other similar deals are in the works. "We will neither confirm nor deny more deals because that does tend to aggravate shareholders, but we’re optimistic that this has opened the door for many other arrangements," he tells Report on Wireless. Reid also declines to say how many markets Cell-Loc might be present in within the next 12 months. "At this time, we’re not willing to impart that type of information, but I think it’s fair to comment when you enter into an agreement to cover a state like California you attract a lot of attention," he says. The deal clincher was the June 6 announcement that Cell-Loc and its Calgary partner IQ2 Communications had gone commercial with the Cellocate Beacon network, says Reid, the newly appointed president and CEO of Cell-Loc (RoW, July 9/02). "One of the most significant issues for the counter-party was that we actually proved up a commercial network. And when we announced June 6 that we had gone commercial that was the turning point for this other counter-party." The identity of the large American firm, which has US$10 billion in assets, is being closely held and won’t be made public for about another six weeks, Reid says. "However, we can say a few of the reasons why we actually partnered with them. One is they have a large balance sheet and they have the financial capacity to undertake coverage of a state like California. Secondly, they’re in the service business and this is a value add to their current service. "They come with what we believe to be critical mass in terms of an existing market, so they fit a concise criteria for us at Cell-Loc on how we want to partner and deploy the networks, which will enable these location services." The two companies have formed TimesThree California, in which Cell-Loc will hold a 49 per cent stake and the U.S. firm will control the rest. TimesThree is the service provider arm of Cell-Loc and will own the rights to deploy the technology throughout the state. Preparing the company for the commercial launch of its Cellocate Beacon technology has been a laborious effort, which began last year when Cell-Loc undertook a major restructuring to weather the downturn in the tech sector and the economy in general (RoW, March 19/01). The transition of the company has also been marked by the stepping back of co-founder and former president and CEO Michel Fattouche, who has taken on a technical role within Cell-Loc (RoW, July 9/02). Reid leaves little doubt that this move signifies a more market-driven approach the company will now be taking. "The change for (Fattouche) and myself is both symbolic and substantive to the direction the company has gone," he explains. "(Fattouche) wants to continue to perfect the technology and I have a long history on the commercial side of the business and we would like to exploit our respective talents." Research and development will, however, remain one of the primary focuses of the company, says Reid, adding that was only possible following manufacturing agreements in China and Brazil (RoW, March 18/02). "That (the manufacturing agreements) was really a major step for the organization in terms of developing a cost model or cost equation that would allow us to deploy this technology in the most inexpensive way we possibly could," he explains.

Cell-Loc expands into Californian market; signs deal with major U.S. company

News | 07/22/2002 4:00 am EDT

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