NEW YORK-Without fanfare, Securicor Wireless Inc. continues its quiet and methodical assembly of a nationwide enhanced specialized mobile radio network, which it plans to extend into Canada and Latin and South America.
Within five years, this hybrid network operator, spectrum owner and patent holder expects to offer commercial service in the top 60 domestic metropolitan markets, said Robert J. Shiver, chairman and chief executive officer.
As part of its rollout plans, Securicor intends to launch this year a dealer program offering exclusivity in its product line and service within a defined territory. It will pay its dealers a commission for each customer signed up and build out its networks as subscribers are activated, he said.
“We believe there is a marketplace both for direct sale (under our brand) and as a carrier’s carrier,” Shiver said.
“Say a Nextel wanted to use half our spectrum to offload their data. We could configure to accommodate that while reserving the rest for our own use.”
Securicor Wireless, formerly known as Intek Global, is a wholly owned subsidiary of Securicor plc, which built the first national wireless network in the United Kingdom in 1963. The parent company became a 40-percent owner of BT Cellnet in 1983 and later sold its interest for $5 billion.
“In the early 1990s, the FCC started licensing 220-222 MHz spectrum as a test bed to promote manufacturers developing spectrum efficient channels. Securicor had developed linear modulation technology for its own use in the U.K. and began selling it to the owners of those licenses,” Shiver said.
In 1997-1998, Securicor rolled up those (license) assets into Intek Global. In 1999, Securicor bought out all outside, minority shares in the Intek Global spectrum holdings. At that point, Intek Global became Securicor’s wholly owned subsidiary and all products and services moved under the Securicor Wireless brand.
“In the fall of 1998, the FCC auctioned more spectrum. We had the incumbent position and became the dominant holder. We bought truly national licenses plus regional and local licenses,” Shiver said.
“At that time, we decided the real value was being a network provider. … We fully expect to be a consolidator of 220-222 MHz spectrum and expect to expand our footprint to include 216-225 MHz. That gives us nine megahertz of spectrum covering the United States. That’s a lot when there is not a lot to be found, and if you do, it’s very expensive.”
On average, Securicor has paid about 2.5 to 3 cents per resident per megahertz for its radio-frequency licenses. Irrespective of purchase price, spectrum in this range also affords the advantages of “being closer to earth for better building penetration, and it requires fewer base stations,” Shiver added.
Linear modulation is Securicor’s patented process that allows analog or digital transmission of as much voice and data over a 5-kilohertz channel as would require a 25-kilohertz channel using other technologies, he said.
A team of 45 RF engineers in Bath, England, conduct ongoing research and development for linear modulation technology. Securicor exited manufacturing in 1996 and outsources production of its branded network and end-user products to about five manufacturers. It also licenses its technology to other companies, including Nokia Corp.
Corporate customers whose employees travel within a local area are the initial target market for the company’s package of always-on two-way radio, two-way data and Global Positioning System/Automatic Vehicle Location services.
“Linear modulation gives us the ability to differentiate bits of data today, but we have chosen (so far) to bundle services at a fixed price because we believe we can do it cost efficiently,” Shiver said.
Long-distance communications and next-generation services, like wireless Internet and fixed telemetry, are a longer term goal. As part of that strategy, Securicor Wireless in late 1999 signed a $50 million agreement to supply its linear modulation network hardware to the National Rural Telecommunications Cooperative. NRTC is an association of about 1,000 rural utilities with 13 million customers in 11 states.
“In some of their markets, we are joint spectrum owners. But customers will get seamless service under our brand. NRTC has states we would not otherwise cover, and from there we can get into remote meter reading,” Shiver said.
In the fall of 2000, Securicor Wireless began signing up customers in the Boston and Los Angeles metropolitan areas. Very recently, Marketronics, which owns RF licenses in southeast Florida, launched commercial service there under the Securicor Wireless brand. The company, which is Motorola Inc.’s largest independent distributor in Latin and South America, also is selling Securicor Wireless’ network and subscriber equipment in that region, Shiver said.
“In all probability, we will move our 216-225 MHz operations into Latin and South America and Canada. There are auctions coming up,” Shiver said.
