Location technology and services provider Cell-Loc Inc. pulled in the reins on its hopes for a national takeover and announced it will restructure its business plan, streamline its operations and eliminate about one-third-47 positions-of its work force.
“The top priorities guiding our business plan are the development of a clear path to profitability and the acceleration of revenue generation,” said Michel Fattouche, the company’s president and chief executive officer, in a release late last week. “We can best achieve these goals by streamlining our organization, simplifying our strategic plan and eliminating investment in activities that are not central to our core business.”
Before the restructuring, Cell-Loc had grand plans to roll out its independent network-based wireless location services system in the top 42 markets in the United States by the end of this year. And it would have been quite a feat, considering the company’s location-services solution requires the installation of sensor posts throughout each of those markets.
However, as the company’s stock in the Toronto Stock Exchange began to slide from its 52-week high of $53 per share to last week’s low of $2.21, the strain of its expansion plans began to show through in a variety of short, worrisome announcements.
Last month, Cell-Loc’s executive vice president and chief operating officer, Lew Turnquist, resigned to pursue other interests, according to a release from the company. Frank King, one of the company’s board of directors, also resigned. No reason was given.
And-even more surprising-Cell-Loc’s Fattouche announced he would provide up to $20 million in funding to keep his company afloat.
“Dr. Fattouche made this commitment at the Cell-Loc annual general meeting in November, and this amount allows our continued focus on meeting our operational objectives as we move into 2001,” said James Hill in a release last month. Hill recently replaced the company’s previous chief financial officer.
Although Cell-Loc seems to have hit rough waters, its idea for an independent location network-which could be used by carriers, Cell-Loc or even customers themselves-may still be profitable, said Elliot Hamilton, the director of the global wireless group at The Strategis Group.
“It could be successful, especially as cellular and PCS carriers keep delaying their deployment of E911 services,” he said. “I think they still have a viable chance of succeeding.”
The company’s chance of succeeding may well rest on its restructuring plan, which could ease Cell-Loc’s financial and personnel troubles and make its expansion plans more careful and methodical.
The plan calls for the company’s recently created division, Cell-Loc Technology, to complete the development of AMPS and CDMA location-based technologies and the manufacture and sale of location-based equipment. Cell-Loc’s subsidiary, TimesThree Inc.-which provides location sensitivity to mobile commerce Internet companies-will focus on “validating the commercial viability of the Calgary and Austin networks and aggressively pursuing commitments from revenue-generating customers,” according to the company.
Cell-Loc said it has installed a network-based location services system in Calgary, and will roll out its solution in Austin, Texas in February. However, the site of the company’s next expansion will be driven by demand, and the company will take a “methodical and case-based” approach, the company said.
