RoamAD Storms the U.S.

By Gerry Blackwell

December 26, 2006

The New Zealand-based company with successful deployments across the globe believes the mania for city-wide Wi-Fi in the States will bring phenomenal growth.

When DR Telecom, a start-up broadband provider in the Dominican Republic, went looking for a muni Wi-Fi solution, it settled on RoamAD, a Wi-Fi mesh network equipment maker that claims a pioneering role in the muni Wi-Fi movement even though it’s little known yet in the U.S.

That’s partly because the company is headquartered in Auckland, New Zealand where it was launched in 2001. CEO Martyn Levy says the RoamAD’s downtown-wide Auckland deployment, completed the following year, was the first muni-Wi-Fi implementation anywhere. The company later sold that network to operator Reach Wireless but has been busy almost everywhere except North America ever since, though earlier this month Osseo, Minnesota announced a deployment with the company.

Levy won’t say exactly how many systems his company has installed, but RoamAD is in ten countries, including Australia, Malaysia and India. It has production systems going into countries in the Middle East and North Africa, as well as Sweden and Italy – and “pilots ranging from three to 10 or 15 nodes everywhere.”

“North America is probably where we’ll experience the most growth going forward,” he says. “We haven’t focused there to this point, but now is the time to do that.” He predicts the company will sell “thousands and thousands” of units here. “It seems as if there’s something in the water in the U.S. that has infected everyone with a desire to deploy muni Wi-Fi. We’re expecting phenomenal growth,” Levy says.

Muni-Wi-Fi projects in the U.S. are rarely one-vendor deals, though. There are usually two or three companies involved – an equipment vendor, systems integrator and operator. RoamAD is already involved in a few North American bids, including in partnerships with Johnson Controls Inc. (St. Louis) and Columbia Ventures. The Osseo deployment will be handled by integrator Unplugged Cities.

The RoamAD technology features third-generation multi-radio mesh nodes with radios plugged into readily available router motherboards, such as the Pronghorn Metro Main Board from ADI Engineering and the Avila board from Gateworks. RoamAD supports virtually any frequency radio, including 4.9 GHz, the band reserved for police and fire. “First responders – that’s a massive market,” Levy says. He claims the technology is also particularly suited for roaming and mobile voice.

DR Telecom, meanwhile, plans to launch Phase One of its network at the end of the first quarter or beginning of the second quarter 2007. It will cover about 250,000 homes, mostly in relatively affluent, high-density population areas of Santo Domingo, the island nation’s capital city.

The deployment has begun, though the company is still negotiating rooftop access rights. The initial phase will cost about $1.2 million, says vice president of technology Felix Rosario. DR Telecom plans eventually to complete coverage of Santo Domingo (at a projected cost of $6 million in total) and then move to other cities on the island.

The company will offer high-speed Internet service initially, but once it gains market share, it will introduce VoIP service. Rosario says DR Telecom is hoping to win 30,000 subscribers in its first year of operations.

The main competition is big, diversified telecom providers such as Verizon (which recently sold its Dominican operations to America Movil, a Mexican firm) and Tricom.  “As for companies where the core business is just being a broadband services provider, there are few, they’re small, and none of them is very serious about it to our knowledge,” he says.

So why did DR Telecom, which was founded by cable TV entrepreneurs, settle on RoamAD? The company started with the idea of using Vivato, the recently relaunched wireless LAN switch maker that ceased operations a year ago. DR even ran a trial using Vivato gear. After Vivato “disappeared,” the company got interested in mesh networking and went looking for a new supplier. That’s when it found RoamAD.

Rosaria is a little vague about why DR favored RoamAD over other more familiar names such as Tropos. “First of all,” he says, “[RoamAD’s] network is very robust. We like the way the platform handles the network and manages subscribers. We like very much that we can control bandwidth to each subscriber. Just the network, the way it was designed – it was exactly what we were looking for.”

DR also considered Strix Systems, a company with a similar-looking product, but it was more expensive. Rosario also liked the fact that RoamAD had deployments in many other countries.

Levy says RoamAD has a couple of key differentiators. First, the technology provides what he refers to as three-dimensional coverage – superior, easier to implement coverage not just at street level and one floor above, but several floors up. Unlike muni Wi-Fi in the U.S., which has tended to focus mainly on low-rise suburban areas of cities, the RoamAD deployments, like the one in Auckland and DR Telecom’s Santo Domingo network, can cover more densely populated downtown areas. This has important economic ramifications.

“You can’t restrict it to the first two levels,” Levy says. “In big cities, there may be several hundred thousand people above level three. [With typical muni Wi-Fi systems], those people won’t have access at all. They’ll have to stand down on the street with the smokers. Our customers have customers as high as level 30 and at street level. It’s totally different. If you get the price right, you can provide a serious utility that will be better than 3G.”

Three-dimensional coverage does require denser node distribution, Levy concedes, but not as dense as it would have to be with competitors’ products. RoamAD makes denser deployment feasible by keeping costs down. One way it does that – and another key differentiator – is that the company unbundles its software. It licenses the software to OEM manufacturer partners in, systems integrators and even some WISPs who assemble their own nodes to RoamAD designs to save money. It’s a unique business model and has helped the company move ahead without gobs of funding.

“RoamAD is a high-margin software business in an otherwise low-margin hardware industry,” Levy points out. “It’s what makes us an interesting business proposition [to potential investors]. No hardware on the balance sheet, no huge R&D costs. We take advantage of [defacto] industry standard hardware.”

It also means that customers, now able to target more densely populated parts of cities, can make more money too. Levy cites the case of one of his company’s recent wins, a city-wide network in Perth, Australia operated by aCure Technology. The operator, a licensed carrier in Western Australia, claims to have seen a 100% return on investment within nine months. The company continues to perform above expectations. It recently told Levy it had achieved its monthly revenue target for the month of November on the 15th of the month.

All in all, Levy is confident he can take America by storm. “If you look at pricing from competing solutions and then consider that [their products] are less flexible, less upgradeable, less modular. It’s a great thing for us that muni Wi-Fi and public safety is such a massive opportunity – probably several billion dollars for muni Wi-Fi in the U.S. alone. We’ve had more traction internationally than in the U.S. but that’s going to change. The key for us now is to find the right integration partner in the U.S. That’s our big challenge for the last quarter.”

Any takers?



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