By Keith Woolhouse
March 9, 2005
Consistent coverage technology gives Ottawa company a foreign advantage
When the rush for cellphones from Chinese consumers reached fever pitch, it was inevitable that the country's major telecom carriers would run into some of the same problems that their Canadian counterparts had faced.
Fortunately the solution was at hand. Except they didn't know it until a team of Spotwave Wireless Inc. executives arrived from Ottawa to show them.
The problem is the "in-building" issue that afflicts the wireless transmission of cellphones, PDAs (personal digital assistants) and handheld devices such as the BlackBerry. Most of the time, the signal between the user and base station is clear. But often, in shopping malls, underground areas and many obscure locations, it can be spotty.
Canada's four cellphone retailers — Bell Mobility, Telus, Rogers and Fido — know all about that. Sympathize with the salesperson trying to demonstrate the clarity and features of the newest cellphone from a shopping mall store where the reception is fuzzy.
"They need a crystal call signal between the retail store and their base station, and if they don't have it, it can hurt their sales," points out Jamie Crawford, Spotwave's director of international sales.
That's where Spotwave comes into the picture. The company's "repeaters" — the technology that enhances in-building coverage — have become the de facto standard in Canada and in many parts of the United States. The technology consists of a roofmounted satellite dish and a small device in the problem area. Together, they deliver flawless reception. It was exactly what China Unicom, the second-largest carrier in China, was looking for when a Spotwave team visited Harbin last year.
China Unicom is one of four carriers driving the wireless revolution in that country, where today they are signing up four million mobile subscribers a month.
"We set out to get into China after being approached by a prospective distribution partner," said Mr. Crawford. Being the company's first venture into a foreign market, it was an ambitious undertaking, but the encouragement came from the compatibility of China Unicom's network infrastructure with Spotwave's technology.
"Still, it was challenging, no question about it. When you're dependent on distributors and also facing a language barrier, you're a bit beholden to them. One of the things we're conscious of now is trying to develop a line of communication and relationship with China Unicom. Working through a middleman can be frustrating in not getting the degree of information that you want from the end customer."
The breakthrough came last September when Spotwave demonstrated its technology in Harbin. China Unicom told the Canadians that they could deploy only three repeaters at different sites per base station because to supply more than that would cause significant interference in the network, and result in degrading the quality of service to all their subscribers, said Mr. Crawford. "But our repeaters are so technologically advanced that they could deploy between 25 and 30 repeaters per base station without any degradation to their network. The choice for them was simple. They could either spend $250,000 to upgrade their base station or install our product at a fraction of the cost."
Since then, China Unicom has installed 50 Spotwave repeaters in Heilongjiang province, in and around the cities of Harbin and Daqing. It has been a successful undertaking and now Spotwave has two distribution partners who cover the country and a sales agent. The company is actively looking for a local hire to represent them exclusively and bring them up to speed on the business culture.
"A Spotwave rep there would also help us overcome the time zone gap," says Mr. Crawford. "There are only a couple of narrow time-clock windows every day when it is practical to hook up with China. We need to get past that."
How serious Spotwave is about its China venture is shown by the dozen visits company executives have made there. "We sent over a business development team, engineering staff, sales staff, technical crews and customer service and product development people," said Mr. Crawford.
"The potential there is huge. We are putting a concerted effort this year into our operation there. Our expectation is that China will be an important part of our business this year and a significant portion next year. It will certainly be our most important international market, without question, for years to come, just based on the sheer enormity of the market. I think next year's sales in China will exceed what we'll do in Canada."
Mr. Crawford returns to China in April to arrange road shows and demonstrate the product to Unicom executives in Beijing, Shanghai and Shenzhen. He also has his eye on China Mobile, the country's biggest carrier. "The next 90 days are going to be important for us to build a base for success in China. We need to become familiar with their ways of decision-making and we need the help of local partners to understand that. When you're not actually over there trying to orchestrate sales activities, it can be quite difficult."
Canada's top four carriers have given Spotwave a boost. The carriers are so confident of Spotwave repeaters that they approved the sale of them to independent end users who need to enhance their own service.
"We have sold 3,000 systems to virtually all top Tier One and Tier Two carriers in Canada and the United States, but if all goes well, we could easily exceed that over the next 24 months in China," said Mr. Crawford.
