April 15, 2003
Ambient Starts to Move, for Real
For several months I've been following Ambient Corp. (OTC: ABTG.OB), the little company with a red-hot technology and a huge partner, but cash flow problems . . . until now. With the backing of utility mammoth Con Edison, Boston-based Ambient has successfully moved large amounts of data, voice, and high-quality video over existing power lines and transformers without "noise," at extremely high speeds and above all cost-effectively, something other companies have been trying to do for years. In other words, with powerline communications, or PLC, every electrical outlet in your house is a way to access broadband -- an easy, cheap alternative to using cable or phone lines for broadband access. Power lines reach practically every building in the United States, an estimated 125 million customers. PLC could be a massive shot in the arm for utilities as well as for Ambient. It could even revitalize the computer hardware and software industries (although cable and phone companies might get a miffed).
A few months ago Ambient found itself cash-strapped and looking for some tide-us-over money. It came last month when Con Ed purchased another 23 million shares, pumping $910,000 into the company -- but doing not much to the stock price, which has moved steadily down from about 19 cents last fall to as low as 6 cents recently.
That changed this morning when Ambient announced that Compania Americana de Multiservicios Ltda., (CAM), a subsidiary of Enersis, a Chile-based provider of electrical power with some 10 million customers, will evaluate Ambient's PLC technology. With this licensing agreement, Ambient will provide CAM with couplers to convert part of Enersis's overhead power distribution network into a high-speed broadband data pipeline. CAM is already operating a successful PLC trial in Santiago, in which 98% of customers have given Internet access quality a rating of "good or excellent," and where the data transmission rate has reached symmetric up/down 10 Mbps to the final customers. From this trial and other "mini-rollouts" Ambient has conducted, it's clear that the company's PLC technology is commercially viable. The final decision to start the large-scale commercial rollout of PLC in Santiago this year is expected soon. At this writing Ambient is trading at 18 cents, up 4 cents or 28% from yesterday's price.
When Ambient's PLC technology is commercialized . . . well, words can scarcely describe what the stock is going to do. This tiny underfollowed company is going to be one of the biggest success stories of the decade. PLC will have ramifications far beyond simple broadband access: Millions of people may upgrade their computers or better yet, buy a computer for the first time. Utilities stocks will jump. Cable and phone companies will have to hustle or lose their broadband customers. More important, where else can you buy a thousand shares of something this hot for a hundred and eighty bucks?