Amadeus Capital Partners, the technology investor, has led a $5 million first stage investment in Cambridge Broadband Ltd, a new company founded by a team previously with Adaptive Broadband Corporation, the third spin out from the Oracle and Olivetti Research Laboratory in Cambridge. Other investors include Adaptive Broadband Corporation and Pino Ventures from Italy.
Cambridge Broadband is developing a new product, which will allow network operators flexibility in configuring point to multipoint fixed broadband wireless networks. Because the product requires only minimal base station equipment, it will provide operators with maximum flexibility for locating cell sites in areas with existing and potential customers. The system is designed to maximise operating revenues by combining high speed, low latency transmission with ease of installation, straightforward systems management and support for a wide range of user and network interfaces.
The main market for Cambridge Broadband’s new product will be the 3.5GHz spectrum operators. The global market for the 3.5GHz spectrum, excluding the USA, is expected to be worth up to $6 billion by 2005. European 3.5GHz spectrum licences are now being issued, with Germany in the forefront, followed by Spain and the UK. None of the major operators such as Vodafone, AT&T and Motorola has their own product in the sub-10GHz spectrum. In Europe, Cambridge Broadband will be selling its product direct to operators and will offer them full service and support networks.
The huge cost savings made possible by using wireless technology compared to copper wire or cable has encouraged a number of new companies to enter the telecoms service sector, many of which are starting to take market share from existing service providers in respect of voice traffic. The potential to increase the bandwidth available to provide speeds to mobile or fixed users comparable to wired local area networks will offer encouragement to even more new entrants. These will include some of the Internet Service Providers (ISPs) seeking to gain share of the local connection revenues.
The key to winning business in this competitive market is cost. Currently equipment costs are so high that offerings, particularly in the 26GHz spectrum, are limited to large business users. Cambridge Broadband believes it can bring down the cost of connection per customer to under $1,000, which will hugely expand the potential for sales into the SoHo and high end domestic markets, as well as the business market.
Commenting on the investment, Peter Wynn, a director of Amadeus, who has joined the board of Cambridge Broadband, says: “Here we have a complete technical team, with proven ability to develop and launch products based on leading edge wireless technology, coming up with a new product that has considerable potential to reduce costs and widen the market for broadband operators. We shall be assisting the founders to build a full management team, bring the product to market, and raise a second round of funding in late 2000 or early 2001.”