Sarasota, Fla.-based development company xG Technology could probably license out its technology tomorrow and leave it at that. But the company has bigger plans.
The company’s Flash Signal technology handles the transmission, reception, modulation, and encoding of data. The company says it uses less power than existing solutions, thus giving mobile devices longer batter life. Moreover, the soon-to-be-released xMax product for mobile VoIP, based on Flash Signal, will be priced low enough to allow the smallest carriers to break into the telephony market.
For such companies, “it is almost a turnkey carrier operation,” said Deputy COO Frank Peake. That’s the big picture for xG: Not just to sell its technology, but to package it up as part of an overall enabler for aspiring carriers.
Founded eight years ago, the company has grown to 51 employees while in R&D phase, thanks to private investments of $40 million.
The net result of all that research is Flash Signal, which uses single cycle modulation as a means to boost device range. It’s designed to be incorporated into wireless devices as a new physical layer chipset, and Peake says it uses precious little power. Where a traditional handset needs 600 milliwatts to 1 watt, he said, Flash Signal requires 10 to 60 milliwatts.
xG’s business plan includes selling not just the technology but also its own proprietary wireless handsets, in addition base stations set at 900 MHz. Peake says the use of the unlicensed frequency band is intended to help smaller carriers overcome the cost hurdle associated with licensed spectra.
With such a solution in hand, smaller CLECs and ISPs could have a chance to play in the big pond. For such companies, “here is a chance for me to be like AT&T. I own my equipment, I own my customer relationship,” Peake said. This way, “they can be a full service operator on their own.”
When it goes out to make that pitch, xG wants to be heard in an already crowded marketplace. To that end the company has taken an unusual route, getting itself listed on the stock exchange in London.
Why not the U.S. market? Not much interest in this special niche, Peake said. So why get listed at all? The best reason, Peake explained, is that going public can bring institutional investors into the fold. With big-time shareholders in the game, “you get larger partners sitting at the table with you,” Peake said. Facing aggressive competition, “it helps to level the playing field.”
Coincidentally, being publicly traded also helps immunize a company against a range of what might be considered frivolous lawsuits. Nice to have that safeguard, Peake said.
In addition to phones and base stations, xG plans to offer CLECs and ISPs something else: Instant branding. The idea is for all xG subscribers to operate under the xMax brand. xG will deliver the marketing message and even process prepaid services.
With these pieces in place, xG needed only one thing to complete the picture: A wireless device. This however turned out to be a tall order to fill.
“The hardest part for us has been to build a handset ourselves. Wireless handsets are extremely difficult to design and manufacture,” Peake said.
xG first contracted with Swedish company LIP, with the goal of integrating xMax into an existing Wi-Fi phone. “That didn’t work out very well at all. It was expensive and we had integration problems with the user interface,” Peake said.
Now the company is working with U.K.-based Cambridge Consultants, who have developed a product that should be ready for release next summer. At about the same time xG expects to introduce an improved version of its base station.
Even if the equipment isn’t quite ready for prime time yet, at least the company has all the pricing worked out. A base station capable of supporting 10,000 voice customers will sell for $50,000 and operators who sign onto the xG program also will be asked to send a share of their recurring revenues back to xG.
Retail customers will pay about $150 apiece for their handsets. Plans are priced at $39.99 for unlimited mobile calling including text messaging and push to talk. For an extra $20 a month customers add on unlimited calling to 43 countries.
As Peake surveys the mobile landscape he sees a big opportunity for companies like xG. “If you can build cheaper networks that have cheaper operating costs, with higher bandwidth and better range, I see it proliferating all over,” he said.
Article courtesy of VoIPPlanet.