The equipment arm of Geotek Communications Inc. has signed a supply contract with Hyundai Electronics Industries Co. Ltd. designed to strengthen the New Jersey-based company’s position in Korea.
Hyundai will build infrastructure equipment based on Geotek’s proprietary Frequency Hopping Multiple Access technology. The agreement is a memorandum of understanding, which the companies expect to be completed later this year.
Geotek and Hyundai are partners in a two-way radio consortium that won a nationwide trunked mobile radio license in Korea earlier this summer. The license covers about 45 million people.
Hyundai will provide FHMA equipment for that venture. Geotek won’t say whether it was required to choose a Korean manufacturer to win the license, but says it believes the use of a local manufacturer was a good move for the project.
Geotek’s equipment arm, Geotek Technologies Inc., operates a factory in Israel. Some manufacturing is done there, but primarily Geotek Technologies subcontracts numerous portions of the FHMA terminals and provides some assembly. Software is created by a Geotek-owned Israeli software company.
Hyundai isn’t competing with Geotek Technologies, said Geotek spokeswoman Randy Miller.
“We are the technology provider. Our business is to sell chipsets and infrastructure. And it’s good to have more companies worldwide making terminals to bring the cost down,” Miller said.
Trunked radio systems represent a significant new area of growth for Hyundai, said Joon Chang, vice president of Hyundai’s telecommunication system division. “We are very excited to be one of the first suppliers of FHMA equipment in Korea.”
Geotek has launched five major FHMA networks in the United States and just recently added the data component to the systems, allowing packet data to be transmitted over the network. Most of the infrastructure equipment came from Israel, while subscriber equipment has been built by Mitsubishi Consumer Electronics American Inc. and Hughes Network Systems Inc.
Geotek is comprised of three major groups: the U.S. network builder, or GeoNet; Geotek International Networks Inc., which has two-way radio interests in the United Kingdom, Germany and Korea; and Geotek Technologies Inc., the equipment subsidiary.
The Korean consortium is led by Anam Industrial Co., a semiconductor company that made a $10 million investment in Geotek last year. The partnership also includes Korea Express Co., a trucking subsidiary of the Dong-Ah group, which handles industrial construction; Korea Mobile Telecom, the mobile phone division of the government operator; and Ssangyong Group, a diversified manufacturing group.
Winning the Korean license was a strong endorsement for Geotek’s FHMA technology, said Samuel May with Pacific Growth Equities.
“Mr. Jim Kim, chairman of Anam Industrial, indicated that Anam and Geotek intend to pursue opportunities in the rest of Asia,” May said.
