Flarion: 'Europe's Ready for Us'
08.22.02
You couldn't accuse Flarion Technologies of lacking confidence. Only months after beating a
trail to the doors of Western Europe's leading mobile carriers, the alternative wireless vendor
believes its proposition of a cheaper, more efficient route to data mobility has some operators
revisiting their next-generation drawing boards.
That belief has led Flarion, currently at the top of Unstrung's startup chart (see Top 25 Privates:
Flarion at #1), to set up a business division in the U.K. to be closer to its new target market (see
Flarion Launches In London). It is already making inroads in North America (see Flarion Seeks
Defense Contract, Flarion Gets Flashy for the FCC, and Nextel Trials Flarion's Flash). The
company also claims it has an impending trial with an unnamed Korean operator.
Flarion's claim is that its Flash-OFDM (Orthogonal Frequency Division Multiplexing) kit can help
mobile operators deliver secure IP services to business customers at between 10 percent and
20 percent of the cost of the more traditional CDMA and TDMA systems, and this is hitting
carriers' eardrums just as they are struggling with industry and investor confidence in 3G.
"Europe wasn't ready for us last year," is the soundbite used by Ronny Haraldsvik, the
company's senior director of marketing strategy, to describe the timing of its marketing
offensive.
The company's pitch to Europe's operators (major carriers, but no names), says Andrew
Gilbert, managing director for EMEA, is this: If you deploy our equipment, which will work
across the spectrum you already have, at the sites and up the masts you already have or are
leasing for 3G, you could save billions of euros on buildout costs and, by passing on those
savings, deliver affordable data services to your most profitable customers, the enterprise
users. Furthermore, our purely packet-switched system will allow business users with laptops
and PDAs to work in exactly the same way as they do when they are wired up to their office
LANs without the need for new hardware, except network interface cards. Applications do not
have to be reengineered, and workers do not have to be retrained.
As concepts go, you would have to classify that one under "appealing."
Without drawing a breath, Gilbert says Flarion has challenged the operators to recognize some
of the limitations of 3G. "It's good for voice expansion and dialup data, but not good for
enterprise data. UMTS has latency issues that TCP/IP can't handle. That's 3G's dirty little secret.
Ours is a standard IP network system that takes the office into a wireless setting, and the
operators have responded positively to this proposition."
Yet, while Europe's mobile operators sweat over their wireless data plans as capex dwindles
and regulatory deadlines loom large, so Flarion recognizes that the leap from thought-provoking
presentation to service trial and then signed order is a big one.
After all, 3G license-holders would be allowed to deploy Flarion's equipment instead of the
W-CDMA kit they are sourcing from the more traditional infrastructure suppliers -- Alcatel SA
(NYSE: ALA - message board; Paris: CGEP:PA), Ericsson AB (Nasdaq: ERICY - message
board), Lucent Technologies Inc. (NYSE: LU - message board), NEC Corp. (Nasdaq: NIPNY -
message board), Nokia Corp. (NYSE: NOK - message board), Nortel Networks Corp.
(NYSE/Toronto: NT - message board), Siemens AG (NYSE: SI - message board; Frankfurt: SIE),
and so on -- only if the regulators are prepared to alter the license conditions. Imagine the
lobbying frenzy that would start!
That would depend on the carriers breaking rank from their traditional suppliers and demanding
alternative infrastructure from other suppliers. Another tough call. But Haraldsvik is adamant
that the market has changed, and that "the operators are in the driving seat now." He claims the
incumbent equipment suppliers are not in a position to limit operators to prescribed options, and
that if a carrier demanded a Flarion solution, then that's what it would get. "Meeting those
demands would not be an issue," says Gilbert.
Carrier timescales preclude any Flarion-based services coming to market in Europe until at least
mid-2004, given the time it takes for decisions to be made, trials to be concluded, and networks
to be built. This is not an out-of-the-box system that may be deployed on a whim.
At the other end of the food chain is the enterprise. Although there are early adopters and
progressive companies keen to deploy new ways of working, aren't corporations generally
very conservative and slow to migrate to new ways of working? It's true that many large
organizations like to do things themselves, says Haraldsvik, but much of the reluctance to
innovate within the enterprise sector has to do with price: "It's the financial directors that make
these decisions."
Being able to dramatically lower the price at which an
all-the-wireless-data-access-you-can-eat offer could be delivered would lead to a surge of
interest from small and medium enterprises, says Gilbert, just as lower prices have boosted the
uptake of DSL in Europe. "Companies already have their applications. It's [access] pipes they
want to buy," he adds.
Flarion wouldn't be in Europe and setting up test facilities if it didn't think there was at least a
chance of winning a slice of the ever decreasing capex action. And they are supremely
confident. As Gilbert puts it: "2003 is going to be a good year for us. We must be the happiest
guys in telecoms just now."
unstrung.com
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Flarion offers Europe:
Zero standard compatibility (with anything),
Zero voice services (or assistance with capacity issues, and certainly no handsets),
Sales claims on cost savings (compared to what similarly limited service, and in what context? Certainly not 1x or wCDMA... Perhaps Soma or Airvana or other stand-alone data services?)
Performance claims roughly equal to EVDO (though lacking EVDO's full-service integration with 1x, and with imminent multi-mode, integration with other IMT2000 3G flavors).
Apples and oranges.
However, this is interesting:
"UMTS has latency issues that TCP/IP can't handle. That's 3G's dirty little secret."
We've read of GPRS latency problems. Apparently this is the case as well for UMTS - at least Release 99. I suspect those Release 5 forklift upgrades to IP compatibility finally resolve the "dirty little secret".
Think Q is visiting with Euro vendors as well - but with a complete solution (voice+capacity+speed+cheapdata) that legitimately addresses their full spectrum of needs... needs that are multi-faceted and more complex than Flarion's one-trick capability? |
