Tech startup thrives down under - ArrayComm - Company Business and Marketing

CommunicationsWeek International, August 13, 2001 by Elizabeth Elecombe

What do you do when Silicon Valley is in a slump? Set up camp in Asia Pacific.

Go west is the message for executives from wireless technology specialist ArrayComm Inc. clocking up air miles between California and countries in the Pacific.

The Asia Pacific region dominates the business of ArrayComm, based in San Jose, California. As well as a long-standing relationship with Kyoto, Japan-based equipment vendor Kyocera, newer initiatives are under way in Australia.

The foray down under has resulted in a strange concept for a vendor: ArrayComm became an operator, of sorts. In the recent Australian spectrum auction the company paid AUS$9.45 million (US$4.9 million) for 15-year rights to 5 megahertz of unpaired spectrum that will enable it to reach 14 million people in the country's major cities.

On the face of it, this seems a bold--read "wild"--move for a small company focused on developing algorithms for radio frequency transmission. It was made, however, with the purpose of jump-starting ArrayComm's latest application of its algorithmic understanding, the I-Burst mobile data technology.

I-Burst is a new take on IP-based mobile data transmission that provides always-on connectivity to stationary devices at speeds of around 1 megabit per second per user, on average, 10 Mbps peak, and an aggregate bandwidth of 20 Mbps per 10km-plus cell.

So why Australia? According to Nitin Shah, ArrayComm's executive vice president and general manager of business development and strategy, the Australian communications Authority (ACA) recognized the value of unpaired spectrum.

"The auction of TDD [time division duplexing] and FDD [frequency division duplexing] were disaggregated," said Shah. "I think the ACA recognized the difference between FDD and TDD and the lack of a standard or technology deemed viable for the spectrum. I think they wanted to create a climate of openness to spur competition." ArrayComm is a founding member of the new TDD coalition set up to champion the technology that allows one channel link to facilitate both upstream and downstream traffic.

While he sees I-Burst as complementary to third-generation mobile (3G) technologies, Shah recognizes that "mobile operators have already gone down a multi-billion dollar path." Now, ArrayComm is looking for an operator partner amongst Internet service providers. It plans to launch service by the end of next year, and by that time the company will also be, according to plans, moving ahead with the U.S. network it hopes to build.

Partnerships are important for ArrayComm, as shown through their collaboration with wireless phone manufacturer, Kyocera. "Relationships with Japanese companies are based on trust and developing a real understanding of each other's strengths and weaknesses and working through them," Shah says.

Shah admits there have been a few bumps along the road during Arraycomm's five-year association with Kyocera. He suggests some differences were cultural and needed to be accommodated, such as the process of 'ringi' in Japan, whereby someone with a new idea must get the support of his/her peers before moving ahead with it, But, he adds, "they get to market pretty quickly."

But the bumps weren't big enough to change the fact that the majority of sales of Intellicell--its flagship smart antenna technology designed to improve the quality of service and coverage of base stations--have been derived through Kyocera's PHS base station business in Japan, China and Taiwan.

In fact, Kyocera may need ArrayComm just as much as ArrayComm needs Kyocera. Shah explained how the partnership came into being, in Japan in the mid-90s: "The amount of radio spectrum initially allocated by the Japanese government for PHS was relatively small, but adoption...was very rapid. DDI Pocket [the PHS operator] was starting to lose subscribers, because people were upset with the quality of the service, so they approached ArrayComm and had us introduced to their manufacturer, Kyocera."

Several years on, and Intellicell is not only now incorporated in 80,000 Kyocera PHS base stations in the field, but Kyocera is also using it for systems such as wireless local loop. The manufacturer is quick to move on new initiatives according to Shah: "There is a receptiveness to new technology and innovation [in Asia]. If something is a pragmatic solution that works and can be utilized, then the Asian community just goes ahead with it."