RoW Short Takes
News | 08/19/2002 4:00 am EDT
COM DEV unloads final pieces of wireless business to Broadband unit’s president
COM DEV International Ltd. has made its final exit from the wireless business by unloading its COM DEV Broadband unit to Axio Wireless Inc., a company headed up by the broadband unit’s former president and some former managers. The Cambridge ON-based company has agreed to sell no greater than 87 per cent of the unit to John O’Connell. Terms of the details were not released.
In an August 9 news release announcing the deal, COM DEV CEO Keith Ainsworth said:"This transaction allows us to cleanly close out M/ERGY activity with the end of the third quarter and restore focus on the company’s profitable core space business."
Earlier this year, the company sold portions of its wireless business to Mitec Telecom Inc. (RoW Update, Jan. 14/02).
In its second-quarter financials announced in May, the company noted the difficulty it was having in trying to land sales for its broadband wireless product, M/ERGY. COM DEV announced that it had hired John O’Connell as president of its Broadband unit to "refocus and restructure the business as a separate company".
In a May 29 conference call, Ainsworth noted that driving revenue from the M/ERGY product has been more problematic than anticipated, despite interest from several carriers to implement the base technology (1X-EV-DO) in their next-generation wireless networks. "We missed the mark" on a revenue and sales perspective, Ainsworth told analysts in May. "We’ve been unable to capitalize on the lead we had."
As a result, COM DEV began to reduce costs in the division and restructure and develop it as a separate company. New management will then be charged with charting a different course for the company," Ainsworth said.
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