By Andrew M. Seybold <andy@outlook4mobility.com>
13 October 2003
Companies To Watch -- Superconductor Technologies
A Really Cool Technology
Today there are more than 120,000 cellular radio sites in the U.S. alone and more than a million worldwide. But as we all know, wireless service is still not ubiquitous and most wireless network operators are building more towers to fill in their "dead spots" and to increase their capacity. With the cellular architecture, capacity can be increased in a number of ways, one of which is to build smaller cells, creating more capacity in a given area. But cell sites are expensive and obtaining permits for new towers is oftentimes difficult or impossible.
Thus when a technology comes along that enables wireless operators to increase the range and/or capacity of existing cell sites, it's a big deal.
Building cell sites to provide wireless coverage is still part science and part black magic. How well a specific site will cover can be predicted by using computer models and experimenting with portable cell sites, but until it's built, the actual coverage cannot be known. Many variables must be taken into consideration, not the least of which is radio frequency interference from other sites or from equipment co-located at the site. Then the amount of transmitter power must be balanced to the ability of the receiver to hear low-power handheld phones. Transmitting beyond the range of the receiver capability causes interference with adjacent sites and does nothing to increase range.
Cell site radio vendors have to make trade-offs when building their equipment. For example, some radio vendors will build a single receiver that is capable of receiving signals across the entire 850-MHz cellular band, which means that it is more prone to interference from another cell site. Others optimize their receiver for a specific portion of the spectrum, which means that it might be more susceptible to noise in that portion of the cellular band.
Antenna vendors face similar problems. Over the years there have been advances in antenna designs that help site planners direct signals to specific sectors, up, down or directly out to the horizon. There are trade-offs here, too. A well designed and built site makes use of the best antennas available and feed line that carries the radio signals from the antennas to the receivers and from the transmitters back to the antennas. But there will always be a need to improve performance and increase capacity.
The Cell Site Aftermarket
A number of companies are building "aftermarket" products to increase the efficiency of these sites. Several are making amplifiers that mount on the tower near the antenna to boost receiver performance, and some have developed other types of amplifiers that can be co-located with the radios to improve performance.
Superconductor Technologies (SCON, with a recent stock price of $5.13), located in Santa Barbara, CA, is one of these companies. While Superconductor Technologies (STI) builds a number of products to enhance the performance of cell sites, its best-known product is its SuperLink RX 850. In simplest terms, this device is both a receiver amplifier and a filtering system that provides interference protection as well as enhanced sensitivity. What does this mean to a wireless operator? First, it means fewer blocked and dropped calls for its customers and, just as important, SuperLink can increase capacity and enhance data speeds on a system. Using these devices, wireless operators can optimize their existing cell sites and put off having to build new sites due to coverage holes or capacity issues.
Wireless operators have come to appreciate what STI can do for them, but radio vendors (Nortel, Lucent, Motorola, etc.) are not thrilled about the technology since network operators that install the SuperLink RX in their cell sites aren't under immediate pressure to invest in radio equipment.
The Magic
A number of companies sell aftermarket receiver amplifiers but only STI has perfected the technology of using extreme temperatures (300 degrees below zero) to work its magic. The heart of the system is a cryogenic receiver front-end (CRFE) that when cooled conducts electricity without the electrical resistance that usually creates noise and signal loss.
This system can improve cell site receiver sensitivity, protect the receiver from unwanted interference and dramatically improve receiver performance. Tests on several CDMA networks have shown up to a 40% decrease in dropped calls and cell site capacity gains ranging from 20% to 50%. These STI devices work with all of the technologies including TDMA, GSM/GPRS/EDGE and CDMA although the largest gains in capacity are being experienced by CDMA operators.
Other benefits reported by customers include filling in coverage gaps, increasing in-building coverage, extending the range of wireless data services and reducing or delaying of capital expenditures to build more towers.
The technology has not been easy to create and as of August 1 STI had shipped only 3,000 units into commercial service. Customers include Verizon Wireless, Cingular Wireless, AT&T Wireless, Alltel, U.S. Cellular and twenty regional, Latin American and other networks.
The Company
STI was founded in 1987 primarily as a research and development company. It went public in 1993 at $10 per share and sold 1.5 million shares. Shortly after hiring M. Peter Thomas as its CEO, STI went from a developer of technology to a provider of products. Peter has a long history in the telecom industry including a stint as CEO of Ericsson North America. It was Peter's vision that took the company from a "technology for the sake of technology" company to a fast-growing supplier of aftermarket wireless technology. In December 2002, STI formalized a merger with Conductus, its largest competitor, giving STI a cumulative 95% market share.
STI manufactures and builds all of its products in its Santa Barbara facility. During the development of the products it invented the process and built much of the equipment needed to manufacture the pieces and parts that go into these systems.
On a recent visit to STI I was given a tour of the facility and came away impressed with the overall operation and the care taken in the manufacturing process. STI brags, and rightfully so, about the more than 500,000 hours mean-time-between-failure (MTBF) of its product and the cumulative hours of operation, which as of January of 2003 exceeded 23 million.
In September of 2002, STI introduced its current product, the SuperLink RX 850, and by January 2003 it had shipped 2,000 units. By the time I visited in early August, STI had climbed past the 3,000 unit mark and was ramping up to begin shipping its new product designed for the PCS (1900-MHz) band.
It has been a long haul for the folks at STI. They have the data to prove that their product works, the expertise to build it and to work on next-generation products and customers to prove it works. In spite of resistance from radio vendors, STI has gained a reputation for delivering on its claims. Network operators that are using STI products have been able to measure their success in real terms: fewer dropped calls, fewer block calls, fewer dead spots in a given cell area, better data performance and in some cases increased cell capacity.
Conclusions
I was impressed with STI and the performance of its products. This is one of the most innovative companies I have visited in a long time and the benefits cited in its sales literature can be proven with data that has been collected through tests run with its network operator customers that have become repeat customers.
Peter Thomas's only lament is that it is difficult to get the wireless network operators to visit STI's facilities because they are in Santa Barbara, often referred to as the California Riviera. It is difficult, he muses, because many of the technology folks are concerned that their bosses will view a trip to Santa Barbara as a boondoggle, not as a trip to see a serious company with serious products for the wireless community.
But I can tell you from my visit that this place is an impressive hotbed of technology. Once you see the processes in place to produce the SuperLink and STI's other products you will understand why its MTBF is well over 500,000 hours and climbing!
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