People love their cell phones. But they hate to get cut off while driving through a hilly patch. And they’re annoyed when the conversation ends at the elevator’s door. Now that customers can make the switch and transfer their cell phone number to a new service provider, wireless carriers are addressing the quality of service.
BridgePort Networks, and a crop of startups just like it, is offering wireless carriers technology that can improve the quality of cell phone calls and extend the reach of their networks without shouldering the cost of new network equipment.
Last week Chicago-based BridgePort closed a $10 million Series A round with commitments from Polaris Venture Partners and General Catalyst Partners.
The company has created software that allows wireless carriers to transmit calls over existing broadband infrastructure, says Todd Carothers, the company’s vice president for marketing. That way, a carrier can extend cellular service to any place that’s already been wired for broadband service – inside homes, airports, office buildings and hotels.
“There is a strong investment thesis for the fixed mobile convergence,” says Rajeev Chand, a senior equity analyst with San Francisco-based research firm Rutberg & Co. “Consumer and enterprise users benefit through increased coverage, a single number for in-building and outdoor use, and lower costs.”
BridgePort’s technology is almost ready for testing with wireless service providers. It’s been in development since the late 1990s, even before the company was incorporated in 2002. Market trials should begin in the summer, and the Series A round of capital will be used to help finance market and product development.
There’s already competition on the horizon, though.
Kineto Wireless, in Milpitas, Calif., closed its second round of venture capital in September. With $24 million of funding behind it, and commitments from 3i, Sutter Hill Ventures, Mitsui & Co. Venture Partners, SeaPoint Venture Partners and Storm Ventures, the company has developed technology that uses WLANs-like cellular bay stations, extending cellular coverage inside the home or into public spaces.
Kineto’s technology is an end-to-end system for wireless carriers. The company is putting the system through trials with three network operators in the United States and Europe and working with handset makers to make the system functional. The company expects to have is first system in place and operational by the second quarter of this year.
Ibis Telecom, a one-year-old company in San Diego, is seeking its first round of venture capital. Three wireless industry veterans are behind the startup, including Stefan Scheinert, founder and CEO of Littlefeet Inc., a company that focused on providing clear signals to cell phone users. Ibis’ system implements a piggyback wireless architecture that uses the subscriber’s existing broadband Internet connection to extend cellular coverage.
Companies like Bridgeport, Kineto or Ibis may succeed because they’ve tapped into a fiercely competitive market for wireless customers. They are not asking carriers to build new towers or add antennas to their transmission networks. Instead, they provide a low-cost way of extending wireless phone service into homes and offices over existing broadband systems.
Transmitting a call over existing broadband infrastructure costs a carrier about one-fourth of what it costs to send that same call over a cellular network. And, if carriers can promise high-quality indoor service, they may capture market share away from telephone providers as consumers abandon their landlines entirely.
Plus, by creating an in-home cellular network, carriers can bundle wireless phone service with other broadband offerings, such as Internet or cable TV access. It also gives cable or DSL operators, and even wireline carriers, the chance to offer mobile phone service
Still, like any emerging technology, these companies are not a sure bet.
Wireless carriers are uncertain how to price the service and how much consumers are willing to pay for. And it still may be challenging to deliver consistent quality of service inside of buildings using unlicensed frequencies, like those that Wi-Fi networks depend on, Rutberg’s Chand says.
Nevertheless, BridgePort and its counterparts are plugging away.
BridgePort – which is run by President and CEO Mike Mulica, the former senior vice president of customer operations for Openwave Systems – is in talks with handset manufacturers to ensure that all wireless devices can communicate with Wi-Fi and Bluetooth networks. The company is developing standards for the technology and testing that the software is compatible with other network equipment.