NextWave Wireless will spend up to $135 million to add IPWireless’ TD-CDMA technology to its already packed technology portfolio as yet another piece in a “customer-driven” mobile broadband offering, the company promises.
That extra piece, however, might not be so easily digested for a company that has shown a somewhat scattered focus on the broadband mobile marketplace, said Peter Jarich, principal analyst-wireless infrastructure, for Current Analysis.
“I don’t know what NextWave is going to do with them … because I don’t see one single clear vision or strategy from them,” he said.
An Unclear Strategy
NextWave is a diverse company that previously acquired or developed technologies like WiMAX, Wi-Fi and has pushed nto mobile TV. With IPWireless, it’s adding TD-CDMA--often been represented as a competitive next-generation wireless gear, and, like WiMAX, something of a technology in search of a market—to that crowded product portfolio.
“TD-CDMA is a 3G standard … the problem is you can be a standard but if you don’t have a lot of people doing it then it’s useless,” said Jarich. “If you don’t have multiple equipment vendors on the network side and the device side, it’s difficult.”
That, he said, will present a challenge for NextWave.
“I see them as a company that owns spectrum and wants to be a silicon provider--which is always difficult. I see them having new spectrum. I see them buying GoNetworks for Wi-Fi. I see them with PacketVideo assets for mobile video. I see them talking about WiMAX,” said Jarich. “I see them all over the place and I think that’s always difficult.”
NextWave will incorporate IPWireless as a wholly owned subsidiary. How it will handle the technology is still a bit more in flux, said Roy Berger, executive vice president of corporate marketing and communications.
“In some cases there’s going to be a convergence of these technologies in our various products so customers can enjoy the best of what these different technologies have to offer in a common network infrastructure,” he said. “Were see ourselves ideally positioned to go after al the carriers who are looking into the 4G space.”
Multi-Market Focus
IPWireless has been chasing that same space and, to an extent, paddling upstream in doing so. While the company has achieved some success with European carriers like Vodafone and Orange, both of whom own the necessary spectrum, it needed another oar in the water especially as it pushed into the mobile TV space, said Jon Hambidge, IPWireless’ marketing vice president.
“We feel especially over the last year we’ve gotten a lot of traction in the mobile TV space … with the tier one European carriers,” Hambidge said. “If you look at NextWave’s companies, particularly their PacketVideo subsidiary, it gives us a lot of help and a lot of tools to make us more successful in that market.(see IPWireless Launches Mobile TV Technology)”
IPWireless has also had success in the public safety space—itself a difficult and shifting market—where it was selected as part of the New York City Department of Information Technology and Telecommunications five-year $500 million citywide mobile wireless network.
“Across the board In all three of those markets we see the partnership and being a part of the NextWave family as really benefiting us and our chances of success,” Hambidge said.
This multi-market focus led to Jarich’s skepticism about the acquisition, which he described as something IPWireless’ “investors probably needed to see (as) some kind of exit strategy.”
“I just need to see one story,” he said. “I’m not sure that vision is there or that NextWave has the capability.”