Making broadband a reality has been no easy task. The various solutions –
cable, DSL, and so on – all have limitations. Yet, broadband is definitely
the future of the Net.
Another broadband option is fixed wireless. As the name implies, the
technology uses wireless communications systems to pump Internet access to
businesses and homes. The technology offers reduced costs, security and
resistance to fading. What’s more, the installation of fixed wireless
systems is not onerous.
One of the players in the fixed wireless world is
SPEEDCOM . Founded
seven years ago, the company is now a provider of broadband fixed wireless
products for ISPs and Telco operators. Connectivity can be at speeds up to
100 Mbps and distances of more than 25 miles.
However, a big problem with fixed wireless is “line-of-site.” In other
words, obstructions can interfere with the transmissions. Well, SPEEDCOM
has a solution, as it recently entered an agreement with SRI International
to license PacketHop technology. Basically, it is software that routes
transmissions to avoid line-of-sight complications. The deal lasts for six
years and is exclusive.
Actually, SPEEDCOM is the result of a reverse merger, which was completed
recently. The privately held SPEEDCOM merged into a shell company called
LTI Holdings, a stock trading on the over-the-counter bulletin board market.
The result is a company with about 8 million shares outstanding and a 2.9
million share float.
The company is showing a nice growth rate. In the past six months, revenues
were $4 million, which is about a 99% increase from the same period a year
ago. Net losses are moderate: $679,000.
The company has filed to list on the Nasdaq SmallCap Market. No doubt, this
will provide much more liquidity to the stock and also help with mergers and
acquisitions.
Moreover, SPEEDCOM has been able to attract top talent. For example, Bruce
Sanguinetti joined the company in September as President. He was the
co-founder of BreezeCOM (BRZE), which is a top player in the fixed wireless
marketplace.
From a valuation standpoint, SPEEDCOM looks attractive. “Looking at the
comparables,” says Jay Wright, CFO, “fixed-wireless companies are selling at
17 times sales. We are selling about half that.” And, when the company
launches its new products in the first half of next year – with the
PacketHop technology – SPEEDCOM will likely see its growth rate juice-up.
