fSONA lands OEM agreement with Alcatel and another infusion of cash

Vancouver-based fSONA Communications Inc. scored big last week when it landed a major original equipment manufacturer (OEM) agreement with France-based telecom equipment giant Alcatel SA. Additionally, the free-space optics equipment supplier also secured another $9.5-million infusion of venture capital. Announced at the international trade show CeBIT, the Alcatel agreement took two years to complete, working both on the technical and marketing sides. The deal not only provides some mainstream credibility for free-space optics (FSO) systems in general, it also demonstrates that fSONA could be considered among the leaders in this emerging industry. Company president and CEO Theresa Carbonneau says the agreement is doubly significant because it’s with a major telecommunications equipment manufacturer. "It is big because it is the first time that a major telecommunications equipment company has gone out and said ‘hey this is a technology that carriers can use and this is a way of using it and this is how we can use it,’" Carbonneau tells Report on Wireless. fSONA will also be able to benefit directly from Alcatel’s existing sales channels and technical capacity and support. "This gives us a significant advantage amongst the free-space optics players, not just because it endorses our technology, but also the type of products we’ve developed. It says a lot to the engineering team and the fSONA team for the way in which it worked with Alcatel in taking this product to market," Carbonneau states. With the agreement in place, Alcatel can now begin offering hybrid FSO/RF-based broadband equipment. The firm plans to integrate fSONA’s FSO subsystems into its high-capacity wireless equipment, which will allow automatic switching between RF and FSO communications. "It’s an integrated system with a switching IDU (indoor unit) that does the switching and the network management between the two systems," Carbonneau explains. "So it switches seamlessly between the radio and FSO." This is not the first time that major telecom equipment OEMs have explored the viability of FSO or the potential of providing integrated hybrid communications gear. Nortel Networks Corp. invested in AirFiber and Lucent Technologies Inc. invested in Terabeam. Those investments don’t seem to have borne fruit yet for the telecommunications equipment manufacturers. A poor investment and capital spending environment has hampered the FSO industry from gaining widespread credibility in the telecommunications industry. To combat that, most FSO firms have tried to promote hybrid systems to move the industry forward. Those companies, including fSONA, found it difficult to convince potential carrier and enterprise customers that free-space optics was a viable standalone link for communications needs. Despite FSO companies’ struggles to gain some respect in the communications industry, fSONA seems to be bucking that trend. The maker of the SONAbeam FSO product family received a healthy injection of cash that will be used for both marketing and product development activities. GrowthWorks Capital Ltd. was the lead investor in this latest round of financing, which is in addition to a $10-million loan fSONA received last year as part of Industry Canada’s Technology Partnerships Canada program (RoW, April 30/02). Plaintree may soon disappear Hybrid product offerings may, in fact, lead to the downfall of Plaintree Systems Inc., which opted to promote an FSO product alone. This week, the struggling Ottawa-based FSO company announced that it had formed a special committee of the board of directors "to explore options for enhancing shareholder value." In recent months, the company has made several moves aimed at conserving cash (RoW, Nov. 25/02, July 9/02 and May 27/02; RoW Update, Aug. 13/02). For more than two years, Plaintree has been touting the potential of its free-space optics systems (RoW, Sept. 18/00). It got into the FSO game through the acquisition of AT Schindler Communications Inc. in the spring of 2000 (RoW, April 3/00). However, no concrete sales have emerged from its marketing efforts.

fSONA lands OEM agreement with Alcatel and another infusion of cash

News | March 18, 2003

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