|Nextwave- Part II-|
re-post from SI QCOM Mod board
To: chapq who wrote (62761) 5/6/2007 9:23:30 AM
From: chapq 1 Recommendation of 63472
NextWave, Part II
WirelessWeek - May 01, 2007
Company returns to market in yet another form, this time as a vendor dabbling in WiMAX, metropolitan mesh and video compression.
By Monica Alleven
Get ready for the next iteration of NextWave, although this time promises less courtroom drama. NextWave Wireless is experiencing a second coming, of sorts. The first NextWave, called NextWave Telecom, bid on PCS licenses back in the mid-1990s but couldn’t pay for them and filed for bankruptcy. A years-long battle with the FCC ensued over the licenses, and NextWave eventually prevailed at the U.S. Supreme Court. But it ended up selling that spectrum and now is pursuing a different business model as NextWave Wireless – with different spectrum but not as a wannabe operator.
The name is mostly the same, and Chairman, President and CEO Allen Salmasi, whose background in wireless dates back to the days before Qualcomm was formed, says the company isn’t trying to change the story. Last year, the new company, which he refers to as NextWave Two, quietly went public and continued down the acquisition path. Its main revenue generator, PacketVideo, was acquired in July 2005 and has been doing some acquisitions of its own. PacketVideo supplies multimedia software to the likes of LG Electronics, Motorola, Nokia and Samsung.
In fact, PacketVideo executives say NextWave’s purchase of the company led the way for its own acquisitions, as well as the ability to grow organically. “For us, it (the acquisition by NextWave) was a breath of fresh air and reinvigorated the company,” says James Brailean, president, CEO and co-founder of PacketVideo, whose European operations since the acquisition have grown from five or six employees to about 85 people.
Salmasi and his colleagues, many of whom also came from Qualcomm, appear to be making up for those years when it looked as though not much was going on for NextWave Telecom outside of FCC battles. In February 2006, NextWave Wireless acquired Cygnus Communications, which develops 802.16 WiMAX technology solutions. Last year, NextWave was the winning bidder for 154 Advanced Wireless Services (AWS) licenses, for a total bid value of $115.5 million.
NextWave Wireless Acquisitions
PacketVideo, whose software enables mobile phone users to take photos, record home movies, watch breaking news, play digital music and videos and more. It’s used in services such as Verizon Wireless’ V CAST for video and music.
Cygnus Communications, which develops 802.16 WiMAX technology solutions based on the IEEE-802.16 air interface standard.
GO Networks, developer of advanced mobile Wi-Fi network solutions for service providers looking to deploy campus and municipal Wi-Fi systems.
IPWireless, recognized for its TD-CDMA network equipment and subscriber terminals.
* Expected to close in the second quarter of 2007.
In January 2007, NextWave announced its plan to acquire GO Networks, a privately held company that develops advanced mobile Wi-Fi network solutions for service providers looking to deploy campus and municipal Wi-Fi systems. By April, NextWave had signed yet another definitive agreement to acquire IPWireless, whose TD-CDMA technology was chosen by New York City for a citywide public safety network.
While it sounds like a mish-mash of companies, to hear NextWave describe it, “each of our companies offers specialized products and services that represent critical links in the mobile broadband ecosystem.”
What is Salmasi’s vision for the company? Primarily, to make as much revenue as possible, he quips. But he acknowledges that it will take a while to realize the game plan. Meanwhile, the strategy has been to acquire companies that can sustain the business while it develops the WiMAX side of the house.
In March, the company announced it had raised $355 million in new capital through a private placement of 355,000 shares. The company plans to use the proceeds to fund its next-generation family of multiband, integrated WiMAX and Wi-Fi semiconductor products and network components and to support strategic initiatives.
WIRELESS 2.0 MANTRA
Longer term, “our vision is a vision of convergence,” Salmasi says, which means that ultimately wide area and local area networks will converge into one solution. That’s why NextWave keeps talking about Wireless 2.0, which is all about making low-cost broadband available everywhere, through all forms of consumer electronics, regardless of access technology. That will emerge over the next couple years, and true Wireless 2.0 will be more widespread in four or five years, he predicts.
“Our aim is truly global,” Salmasi says, with a range of products being developed for both the United States and international markets. In developing countries, it’s particularly not cost-effective to lay copper or to install fiber, he says. NextWave can offer a mix-and-match of products, depending on what the customer wants. As for its spectrum holdings, NextWave says it doesn’t want to be an operator, but analysts say the company could enter into arrangements with service providers that could borrow or lease the spectrum.
At the outset, NextWave is targeting its products mainly at wireless carriers, both existing and emerging. Longer term, the customer base could range from cable companies or private enterprises. Salmasi says that especially with beamforming, NextWave can extend the range of coverage significantly more than other Wi-Fi products on the market, and its solutions make backhaul more cost-effective.
As for skeptics who say WiMAX is unproven, Salmasi points to Sprint Nextel’s upcoming launch in several markets and notes that NextWave is in discussions for ultimately providing a complete WiMAX solution to partners around the world. “It’s not going to happen overnight,” similar to how CDMA took years to demonstrate, prove and commercialize.
Some observers say while it appears on the surface that NextWave is cobbling together disjointed entities, they can see how the pieces might interact. TD-CDMA, for example, can be applied to WiMAX to enhance performance, says Michael Thelander, CEO of Signals Research Group, a U.S.-based consultancy.
Thelander sees similarities between NextWave and Qualcomm beyond the founders, including its ability to be more than just another chipset supplier. “NextWave is definitely trying to create this ecosystem,” he says. “There’s vision there and you kind of get a sense of what it is … They may fade into oblivion, but they might become something really interesting.”
One thing NextWave hopes it doesn’t share with Qualcomm are the intellectual property rights (IPR) battles. Using the WiMAX standard should avoid much of that. Salmasi notes that Kenneth Stanwood, president and CEO of Cygnus, was one of the founders of the WiMAX Forum and a primary designer of the 802.16 MAC layer.
As industry analyst Andrew Seybold notes in his blog, NextWave is a company that keeps reappearing, and it remains to be seen if it can put together the pieces and parts it has purchased and the spectrum it holds to make a solid business. Despite some controversial times in the industry, Salmasi says the company is proud of what happened with the first iteration of NextWave. Creditors eventually were paid in full, and shareholders were rewarded. Plus, seven out of eight U.S. Supreme Court justices supported the company.
Now, if NextWave can garner as much attention for its products outside the courtroom as it once did inside, it could come out winning yet again.
Nextwave Timeline, Part 1
July 1995 – NextWave opens first office, in Elmsford, N.Y.
December 1, 1995 – NextWave deposits $79 million with FCC to participate in C block auction.
May 1996 – FCC announces that NextWave is high bidder ($4.74 billion) for C block PCS spectrum licenses.
May 8, 1996 – NextWave makes $130 million C block deposit, bringing total payments of $210 million to U.S. Treasury.
July 1996 – NextWave pilot PCS network in San Diego goes on the air with first call from Rep. Thomas Bliley (R-Va.) to FCC Commissioner Rachelle Chong.
August 1996 – MCI and NextWave sign 10 billion minute resale agreement.
January 9, 1997 – NextWave makes second C block down payment of $247 million, bringing C block total payments of $474 million to U.S. Treasury.
Early 1997 – NextWave's payroll has grown to over 350 full-time employees and over 400 outside contractors, and the company has secured in excess of $2 billion in vendor financing commitments and entered into agreements to sell in excess of 35 billion minutes of use to telecommunications carriers.
Mid 1997 – NextWave has obtained clearance for 90% of the microwave links, designed more than 1,300 cell sites, signed over 300 site leases and negotiated another 900 leases, all needed for the initial launch of service.
Fall 1997 – NextWave has resale agreements with more than 25 companies representing 40 billion minutes of use.
January 1998 – NextWave completes network planning in all of its major markets and has installed and operated four trial network systems in San Diego, San Antonio, Washington, D.C. and Las Vegas.
June 1998 – NextWave has invested nearly $80 million in the build out of its network.
June 8, 1998 – NextWave files for Chapter 11 bankruptcy protection.
June 25, 1999 – NextWave files reorganization plan to pay creditors and FCC in full.
July 1999 – U.S. District Court affirms Bankruptcy Court fraudulent conveyance ruling in favor of NextWave.
August 1999 – U.S District Court denies FCC's application for stay.
August 27, 1999 – NextWave creditors and investors vote overwhelmingly to accept NextWave reorganization plan.
November 1999 – U.S. Court of Appeals for the Second Circuit issues brief order reversing lower court rulings favoring NextWave, on jurisdictional grounds.
December 16, 1999 – NextWave files modified reorganization plan and offers full payment to the FCC of $4.3 billion in installment payments, as provided under FCC rules.
December 22, 1999 – U. S. Court of Appeals for the Second Circuit issues written opinion explaining its ruling that the Bankruptcy Court did not have jurisdiction to reduce NextWave's purchase obligation.
January 11, 2000 – NextWave offers to pay FCC full remaining $4.3 billion debt in single lump sum, seven years earlier than payment due under FCC rules.
January 12, 2000 – FCC rejects NextWave's offer, announces cancellation of NextWave's licenses and plans to re-auction them.
January 2000 – Federal bankruptcy court invalidates FCC's attempted cancellation of NextWave wireless licenses.
May 25, 2000 – U.S. Court of Appeals for the Second Circuit rules that bankruptcy court lacked jurisdiction to review FCC’s license cancellation and that issue may be heard only by U.S. Court of Appeals for the District of Columbia Circuit.
June 9, 2000 – NextWave asks Supreme Court to grant certiorari and review the December 1999 decision of the U.S. Court of Appeals for the Second Circuit.
September 2000 – FCC denies NextWave request to reconsider license cancellation announcement.
October 10, 2000 – Supreme Court declines to grant certiorari and review the December 1999 decision of the U.S. Court of Appeals for the Second Circuit in the NextWave bankruptcy reorganization proceeding.
November 3, 2000 – NextWave asks Supreme Court for a rehearing to address the split between the U.S. Courts of Appeal for the Second and Fifth Circuits regarding the FCC's attempts to exempt itself from federal bankruptcy law and the jurisdiction of federal courts presiding over bankruptcy reorganizations.
November 27, 2000 – Supreme Court declines to hear NextWave case.
December 2000 – FCC opens re-auction of NextWave's wireless spectrum licenses.
January 27, 2001 – FCC closes re-auction of NextWave's wireless spectrum licenses. High bidders include Alaska Native Wireless, L.L.C., Verizon Wireless and VoiceStream Wireless Corporation.
June 22, 2001 – U.S. Court of Appeals for the District of Columbia Circuit unanimously grants NextWave's appeal, ruling that the FCC violated bankruptcy law when it cancelled NextWave's licenses while it was in the process of successfully reorganizing its business affairs in bankruptcy.
July 2, 2001 – NextWave enters into an agreement with Lucent Technologies to begin phased construction of a 3G digital wireless network in NextWave’s 95 PCS markets.
August 6, 2001 – FCC files motion to stay U.S. Court of Appeals decision and appeal to U.S. Supreme Court
August 6, 2001 – NextWave files reorganization plan