RealTime IT News

WebLink: Gearing Up for the Future

The traditional paging market is slowly being vaporized. Yet, it is still a cash-cow for some companies. In fact, these paging companies have been using the excess cash flows to expand into new wireless markets.

One such company is WebLink Wireless . The company has spent about $310 million building an Internet-based, nationwide PCS wireless network.

For the network, WebLink has been designing a variety of wireless data devices. There is the T900. It is a two-way device that allows you to send messages to any e-mail address, mobile PCS phone or personal digital assistant (PDAs). The device is very convenient - with dimensions of 3.2" x 2.1" x .9" and weighs 3.86 oz. To type on the keyboard, you can use your thumbs.

No doubt, the T900 has access to Net content, as well as an address book. The battery life is three weeks (operates on an AA battery). Apparently, the demand for the device is strong, as production has been ramped-up. The device is branded by Motorola, which has commenced a major advertising campaign.

As expected, WebLink has been showing a fall-off in its traditional paging division. In the past quarter, the company had a decline of 106,789 members. But as for the wireless data division, the membership has been rising quickly. The company showed an increase of 12,574 members in the fourth quarter of 1999. By the second quarter of 2000, the company had an increase of 52,512. In all, the company has 146,809 members. The majority of users are business customers.

In terms of the financials, the traditional paging division had $19.1 million in earnings before interest, taxes, depreciation and amortization (EBITDA). As for the wireless data division, it had a negative $6.9 million (EBITDA).

With the transition to a new network and product line, WebLink is poised for strong growth. In fact, the T900 will be a nice boost to the financials for the third and fourth quarters of 2000 as the product is rolled out nationwide. Senior executives of the company also see potential. For example, the Chief Financial Office recently purchased 19,700 shares between $7.21 and $9. The current stock price is $10-3/16.