Long live TD-CDMA. Last month NextWave, which is struggling to stay afloat, sold off its majority stake in its IPWireless subsidiary for $1 million to IPW Holdings, which is made up of the senior management team of IPWireless. The inventor of TD-CDMA, also known as UMTS TDD, is now a private entity and back where it started--evangelizing its technology.
NextWave bought IPWireless in April 2007 for $100 million and now is selling the division back at a fraction of the price. IPWireless entered into a separate transaction with an unnamed strategic customer under which IPWireless received debt financing to support its business operations, and NextWave will have no continuing obligations to fund or otherwise provide support to IPWireless.
According to John Hambidge, IPWireless chief marketing officer, the company is in the best position it has been in market wise since it was founded. "We're on track to have the biggest year ever in 2009," he said. "We're on track to to be a positive cash flow company by mid 2009."
TD-CDMA technology backers have faced their fair share of disappointments over the years. It's an efficient working technology, but it just hasn't gained the economies of scale needed to widen the technology's net. Sprint Nextel's decision to deploy WiMAX over TD-CDMA dealt a heavy blow to IPWireless back in 2006. The technology is successful in places such as the Czech Republic, where T-Mobile offers a USB dongle broadband service. Perhaps TD-CDMA's biggest showcase is in New York City, where the city's Department of Information Technology and Telecommunications deployed it using Northrop Grumman equipment for city and public-safety users.
Hambidge said the New York network now has nearly 400 cell sites in the ground and is supporting 53 different applications from 19 different agencies. The average network speed is 15 Mbps on the downlink and 5 Mbps on the uplink, he said.
Hambidge said IPWireless has several initiatives on its plate. One is pursuing more government contracts like the New York City network, which operates in 10 megahertz of TDD 2.5 GHz spectrum leased from the Catholic church and Sprint Nextel.
IPWireless will also work to gain traction in the commercial world, despite the fact that LTE is coming at the end of 2009; operators may either milk their existing networks or wait to deploy LTE until they see significant scale in LTE devices. However, Hambidge said its TD-CDMA platform is software upgradeable to LTE.
"We would argue in a number of scenarios, especially for those operators with 10 megahertz of spectrum, that TD-CDMA would be a viable option. Once operators see LTE handsets coming to market, they can migrate to LTE," Hambidge said. Plus, IPWireless could see a niche as a specialist in deploying LTE TDD networks. China Mobile is champing at the bit for a TDD version of LTE.
The third area IPWireless will focus on is mobile television. Before NextWave bought the company 18 months ago, IPWireless was aggressively developing TDtv technology, which is based on 3GPP Multimedia Broadcast Multicast Service, and allows UMTS operators to deliver mobile television and other multimedia services using their existing 3G spectrum and networks but without the drain on voice and data services. Under NextWave, the service was tweaked to cater to WiMAX operator, but now IPWireless will focus only on 3GPP operators.
The mobile TV proposition isn't that strong these days but Hambidge says there are other opportunities for a broadcast technology, which includes services such as web casting to subscribers and data casting applications.
I for one, would like to see this scrappy company make some headway.--Lynnette [1]
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[1] mailto: lluna@fiercemarkets.com