~OT~ THREAD: Anyone looking to buy ANCC in the IPO today?
September 24, 1999
AIRNET COMMUNICATIONS CORP (ANCC)
S-1 Filing (SEC form S1)
We provide broadband, software-defined base stations, backhaul free base stations and other infrastructure products to wireless service operators who use the GSM, or Global Systems for Mobile Communications, protocol. Our base stations incorporate a new radio architecture that is designed to allow operators to support simultaneous voice and high-speed Internet data on a single software-upgradeable platform. We designed our system to be easier to deploy, easier to upgrade, and to have lower capital and operating costs than traditional narrowband systems. We received the 1998 GSM World Award for Best Technical Innovation from the GSM Association, an international body with members from 133 countries, in recognition of our revolutionary software-defined architecture and backhaul free technology.
In recent years, there has been substantial growth in the number of wireless users around the world, reaching 303 million subscribers in 1998 according to International Data Corporation, or IDC. Approximately 44% of these subscribers are using the GSM protocol, making it the most widely used protocol in the world. A number of factors are contributing to this growth including the expansion of wireless coverage outside of urban areas as well as the significant decline in per minute prices for wireless services. The combination of this subscriber growth with a substantial increase in minutes of use by wireless subscribers has strained existing wireless networks. We expect the advent of new wireless services such as high speed data to further contribute to the growth in wireless usage. IDC estimates the number of wireless users will reach approximately 1.1 billion in 2003, representing a compound annual growth rate of 29%.
Wireless service operators will need improved network equipment to meet the expected demand for wireless services and remain competitive. Traditional GSM base stations were designed to support larger operators providing voice service in heavily populated areas. As a result, they are not cost-effective when used in low population density areas. An additional problem with traditional base stations is the cost associated with the digital connection, usually a T-1 line, needed to carry, or backhaul, traffic from each base station to the network. This requirement can result in significant recurring expense for most operators. Finally, these traditional narrowband base stations were not designed to be compatible with or upgradeable to next-generation, high-speed wireless data protocols. As these protocols are developed, we believe operators will look to purchase wireless infrastructure that can be easily and economically adapted to conform to these emerging standards, while continuing to support the voice services they already offer their customers.
We believe our broadband, software-defined solution positions us to meet the industry's challenge of transitioning from today's GSM networks to tomorrow's integrated voice and high-speed data networks. The timing of this transition and the exact specifications of these new protocols are uncertain. We believe that our software-defined solution will be particularly valuable to operators during this uncertain transition as it enables operators to purchase infrastructure today which can be adapted to tomorrow's new protocols.
We believe our solution reduces an operator's total cost of owning and operating wireless networks. Our solution features two innovative base station products, the AdaptaCell and the AirSite Backhaul Free Base Station, which provide the following key benefits:
Adaptable and Easy to Upgrade. Our AdaptaCell base station incorporates a broadband architecture and is software-defined, meaning it uses only one radio or transceiver to process a large amount of spectrum and uses software to control the way it encodes and decodes wireless signals. We expect this design will support new protocols through changes in software, and few, if any, hardware modifications. By contrast, traditional base stations must be extensively modified or even replaced if operators want to offer high-speed data services to their customers.
Lower Operating Costs. Our base stations are designed to result in substantially lower operating costs per subscriber than traditional base stations. Our AirSite is a compact GSM base station that incorporates its own wireless backhaul and can eliminate most of the expensive T-1 lines used in a traditional deployment. The AdaptaCell's simplified hardware design results in a smaller base station that has fewer components, is easier to install and maintain and uses less electricity.
Flexible Deployment. As opposed to traditional systems, our scalable solution allows operators to start small, establish a network, and incrementally expand coverage and capacity as subscriber demand increases. In addition, because AirSites are backhaul free, operators are able to deploy them in new and innovative ways.
Our goal is to become a leading worldwide supplier of wireless base stations. Our strategy for achieving this goal includes the following core elements:
Leverage Our Technology Leadership. We have raised approximately $130 million since our inception to develop our technology and fund operations. We have 29 domestic patents granted, 20 patent applications pending, and 5 provisional patent applications. We believe that we currently have the only commercially deployed broadband, software-defined base station. We intend to leverage our technology leadership by continuing to invest in our substantial research and development efforts in order to continue to provide our customers with cost-effective, innovative solutions.
Continue to Market Our Product Advantages to Domestic Operators. We will continue to focus on providing infrastructure to domestic wireless service operators deploying systems in new markets, known as initial-coverage areas, or filling gaps in existing deployments, known as coverage-limited areas. Our cost-effective, scalable infrastructure is designed to meet the needs of both new and existing operators.
Expand Into International Markets. We believe success in domestic markets will facilitate entry into international markets. As we have done in the U.S., we will focus initially on low-population density markets. To achieve an international market presence as quickly as possible, we are establishing our network of agents, distributors and original equipment manufacturers, or OEMs.
Establish a Market Leadership Position in High-Speed Data and Super-Capacity Markets. Our AdaptaCell positions us to establish a market leadership position as wireless communications evolve from voice to high-speed Internet access. The AdaptaCell is designed to support multiple protocols, enabling a single base station to service legacy voice and high-speed data subscribers simultaneously. We have also designed the AdaptaCell to serve as the basis for a new generation of super-capacity base stations which have substantially greater capacity than traditional base stations. |
