WASHINGTON-Neoworld Inc., a newcomer with a back-to-the-future wireless strategy, represents a new breed of dispatch operator forced by massive consolidation and other industry trends to exploit market niches with economic viability.
Neoworld is looking to bridge the gap between traditional analog specialized mobile radio systems driven by high-power antennas and new-age digital SMR systems with cellular-like architectures that Neoworld’s top executive helped popularize in the United States in a previous life.
Products, services and technical maintenance will be provided by Neoworld dealers, a throwback to the early days of two-way radio. And voice service-despite the data rage-will be dominant as it once was. But unlike dispatch radio of days past, technology deployed by Neoworld will be state of the art and it will be portable.
The entrepreneur trying to pull it off for Neoworld is Brian McAuley, co-founder of dispatch radio giant Nextel Communications Inc. Nextel gained fame and success by buying hundreds of analog dispatch channels during the past 13 years and parlaying them into a nationwide digital network that today offers dispatch, mobile telephony and messaging services to more than 5 million business customers.
McAuley is not trying to re-create Nextel, but he would like to replicate its success.
“There’s a need out there out that’s not being met by 60-year-old analog technology or by cellular systems,” said McAuley.
Indeed, Neoworld is going after dispatch users left for dead by Nextel. Mobile telephone firms, while permitted by federal regulators to do so, do not provide genuine dispatch radio service.
“It’s not going to happen,” said Alan Shark, president of the American Telecommunications Industry Association. A dumbed-down version of dispatch-push-to-dial as opposed to push to talk-is offered by some mobile-phone carriers.
Neoworld entered the business by purchasing a slew of major market 900 MHz SMR licenses from creditors of now-defunct Geotek Communications Inc., spectrum Nextel initially was banned from buying as a result of a court-approved antitrust consent decree last year.
McAuley, after considering a number of technologies such as ComSpace Corp.’s DC/MA (digital channel multicarrier architecture), European-based Tetra and Motorola Inc.-engineered iDEN, opted for the latter.
Early on, there was grumbling in the dispatch radio industry about the prospect of Neoworld becoming a front for Nextel such that Nextel would indirectly gain access to Neoworld’s frequencies through roaming agreements.
“We’ve not had that type of discussion,” said McAuley. Dual-mode phones covering the 800 MHz and the 900 MHz bands would be necessary for Nextel-Neoworld roaming.
Nextel is hungry for more spectrum to accommodate subscriber growth and wireless data and video Internet applications.
Neoworld iDEN will operate a bit differently from Nextel iDEN. Neoworld systems will have small groups of high-power antennas (six to nine) in each market. In addition Neoworld will target the low-end and middle-range SMR markets and try to capture users who are dissatisfied with analog dispatch but unwilling to buy high-end service from Nextel, Southern Linc and others.
Like Nextel, Neoworld will design its networks to serve handheld wireless units so popular among consumers these days. The days of vehicular mobile radios are over.
McAuley said Neoworld will have SMR systems in 14 of the largest U.S. markets by the end of 2001 and in 50 top cities by 2003. Neoworld’s capital costs are estimated to be at least several hundred million dollars.
Madison Dearborn Partners, which has invested in Nextel and other wireless firms, holds a 21 percent stake in Neoworld. Others with ownership include First Union Capital Partners L.L.C. (13.6 percent), Goldman Sachs & Co (13.6 percent) and various others (51.8 percent total; none of whom individually hold more than a 10-percent interest). Neoworld may well go public in a few years, said McAuley
McAuley said Neoworld is staffing up as it prepares to build out SMR systems. One of the biggest challenges for McAuley is highly nontechnical, however. “Trying to get a name that is meaningful is difficult,” said McAuley, noting he researched 80 names and came up empty.
