Once voice networks are more reliable, consumers may begin using wireless data services. One of the biggest and boldest bets based on that very premise is Flarion Technologies, a Lucent Technologies spin-off that scored a $45 million second round from Bessemer Venture Partners, Charles River Ventures, Cisco Systems, and a slew of other big backers in March last year. Like many of its peers, Flarion is capitalizing on carriers' frustration with their current equipment, but has chosen to build its own high-speed data network from scratch, rather than make incremental improvements to today's technology.
Flarion's network, which is interoperable with existing wireless local area networks (LANs), will be three times as effective with spectrum use, and ten times cheaper for carriers to handle, says Bruce Sachs, a partner at Charles River and a Flarion director. One unnamed major carrier started a marketing trial in first quarter 2002 and has promised to deploy it in select regions if the trial is successful.
Most investors are wary of plays that involve big leaps, however, and have struck with backing companies that have wireless data technology that targets businesses, many of which are likely to implement wireless LANs in 2002. "It's evolutionary, not revolutionary," says ComVentures' Mr. Rolnick. "Corporate enterprises can already see the productivity gains."
For now, the main problem companies face when deciding if a wireless LAN is a worthwhile investment is how to ensure that employees stay connected to the network once they leave the office. Bluesocket, backed by $7.5 million from St. Paul Venture Capital and Osborn Capital, will enable users to roam from the wireless LAN range to an offsite general packet radio service network. Neomar, which has raised $23 million from Clearstone Venture Partners, Research in Motion, and 724 Solutions, sells software and routers that help companies move their internal data onto wireless networks.
Write to julie.landry@redherring.com.
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