By BRENDA DALGLISH
Media Reporter The Financial Post
ÿNorthern Telecom Ltd.'s $586-million bid for tiny Broadband Networks Inc. is a bold declaration of its commitment to wireless communications.
ÿThe takeover offer comes six weeks before a big frequency auction begins in the U.S. and some wireless technology experts have been publicly speculating on whether Nortel would jump into the fray.
ÿBroadband, which was founded in 1994 by David Graves, a former Nortel electrical engineer, is a world leader in developing wireless broadband telecommunications networks. It had sales of $15 million in the first nine months of 1997.
ÿBut Matt Desch, president of Nortel's wireless networks division, said the potential of BNI's wireless communication technologies - LMCS (local multipoint communication systems, also known as "virtual fibre") and MMDS (multichannel multipoint distribution systems, also known as "'wireless cable") - is just being recognized.
ÿNortel moved on BNI now because it wants to be a world leader in wireless, said Desch. By combining Nortel's traditional telecommunications skills with BNI's leading edge wireless technology, it could be first to the market. "We want a leadership position in the wireless area."
ÿThe size of Northern Telecom's investment demonstrates the company's commitment to wireless broadband, said Graves. "They want to be the pre-eminent supplier, they want to dominate that market." he said.
ÿ"We had a meeting of the minds on that point. The companies that have deployable technology will grab the lion's share of the early market. And everyone's pretty familiar with what happens in telecommunications when you get the early market lead: it's yours to lose."
ÿDesch predicts that half Nortel's wireless sales will eventually be to industrialized countries like the U.S., where LMCS can provide competition for the traditional telecommunications and cable companies. The other half will be in developing countries that do not have a fully wired telecommunications infrastructure.
ÿBNI and Nortel's first project was a test site in Dallas for Teligent LLC. BNI supplied the equipment and Nortel acted as system integrator, connecting 11 buildings. Teligent, a competitive local exchange carrier, has a licence to deliver voice-video and data services in the 24 GHz frequency in more than 70 U.S. cities.
ÿThe companies began working on the project about four months ago, said Graves. It was completed and turned over to Teligent about two weeks ago.
ÿBNI was already the world's leading LMCS technology provider, Graves maintained, but Northern Telecom will bring new strengths.
ÿ"It allows us to integrate our wireless offering together with all the other product lines Northern Telecom offers, and it allows Northern Telecom to offer a complete total end to end solution whether it's fibre, wireless or any mix of the above," he said.
ÿ"That gives us strength in the market that's way out of proportion with anyone else." |
