NEW YORK-Because many new personal communications services providers are unable to pay out of pocket for equipment purchases, AirNet Communications Corp. announced last week it would downsize, restructure and direct its attention to customers capable of arranging financing independent of vendors.
“In markets outside the United States, where the company’s focus has been analog wireless local loop, as in the U.S. PCS market, there is a tremendous need, but most opportunities require vendor financing, which AirNet’s balance sheet cannot presently support,” the company said. “Even though AirNet has signed contracts, shipment and revenue recognition are held up waiting for this very problem’s solution.”
Having already had to raise funds to pay for spectrum in PCS auctions, some operators are having a difficult time finding investment capital to build their networks. While some vendors are financing network buildouts, others are not willing to meet terms required by PCS operators. Motorola Inc. earlier this year pulled out of equipment contract negotiations with Sprint Spectrum L.P. because Motorola would not agree to Sprint’s financing terms.
In Lucent Technologies Inc.’s prospectus preceding its public offering of stock and spinoff from AT&T Corp., Lucent indicated it may not be able to support carriers in the way AT&T has historically.
In response to the circumstance, AirNet said it has undertaken “a careful restructuring of the company’s administration, manufacturing and support functions, including elimination of positions and reassignment of others.”
AirNet, headquartered in Melbourne, Fla., designs, manufactures, distributes and supports wireless broadband infrastructure products, including high-capacity, software-based, protocol-independent base stations.
Mario Salvadori, a spokesman for AirNet, said the company isn’t getting out of the manufacturing end of the business altogether. However, it will curtail its operations in order to size them in line with immediate demand from original equipment manufacturers of PCS and WLL, as well as from newly won contracts with carriers using PCS-1900 networks for Global System for Mobile communications technology. In the latter category, AirNet announced last month it would provide infrastructure equipment and supplies to Kentucky-based SouthEast Telephone Ltd., a winner in the Federal Communications Commission C-block PCS auction. Similar contracts, are pending, Salvadori said.
“At AirNet, we are totally convinced of the dynamic growth potential ahead in the wireless communications market around the world once the current impediments are resolved,” said Bernard R. Smedley, president and chief executive officer.
