Cafenet News

RoamAD resurrects Auckland wi-fi plans

26 April 2004

RoamAD has resurrected plans for a wireless internet network in Auckland's inner city, but this time it will supply only the technology, leaving the service to be run by growing "wi-fi" operator Reach Wireless.

RoamAD has also received a $US100,000 ($NZ155,000) loan from Silicon Valley-based chip maker Intel, a small amount given the multi- billion-dollar investment arsenal of Intel Capital, but an endorsement of RoamAD's technology nevertheless.

Reach Wireless, which is backed by telecoms entrepreneur Chris Jones, will offer wireless internet access in a 3sq km section of the inner city spanning apartment buildings, cafes and offices, using the network built by RoamAD.

Previously the plan had been for RoamAD to run the network itself and seek a partner in a large telco to market and service the network.

But no deal eventuated and RoamAD has spent the last year focusing on developing its technology.

"RoamAD is an equipment vendor and we need to sell our technology to customers like Reach," said RoamAD chairman Martin Levy.

This time around, RoamAD and Reach have the advantage of better market understanding and demand for "wi-fi" which operates on the unlicensed 2.4GHz (gigahertz) spectrum and allows users of laptops to connect to the internet at high speed, wirelessly. Most laptops sold today have wi-fi cards built into them.

The wireless hotspot model has started to take off overseas, but Reach is talking "hot zones" where a single wireless antenna may service several premises rather than one site. "The (hotspot model) is flawed because communication becomes a destination - people don't want to do that," said Reach Wireless general manager Steve Simms.

Reach has wi-fi coverage scattered across a range of cafes and retail outlets in central Auckland and around a dozen more in city centres down the country.

"Wellington has been gloating about its use of wi-fi, now our zone is the largest in the Southern Hemisphere," said Mr Simms, who has more than 1000 customers, half of whom use the service regularly.

But Mr Simms said he was in talks with Citylink, which runs an extensive network of hotspots under the CafeNet banner, about allowing customers to "roam" between the two networks.

Mr Simms said the big advantage over competitors was that wi-fi was a standard feature of laptops and no external modem was needed.

"The difference with Woosh is that laptops aren't coming out with Woosh modems built in."

Reach's rates are reasonable for casual users, ranging from $5 for a 10 megabyte allowance to $50 for 160MB.

RoamAD hopes to sell its technology overseas. Mr Levy would not talk about the Intel loan due to non-disclosure agreements.

He said the shape of holding company Nomad Wireless Technology NZ had changed significantly. Property developer Andrew Krukziener was still an investor, but Nomad now had a total of 80 shareholders, 25 per cent of them overseas.

Intel has secured pre-emptive rights to subscribe for up to 50 per cent of new shares issued for the term of the loan.

Mr Levy said a lawsuit taken against Nomad by Wayby Investments claiming breach of confidentiality agreements had been thrown out of court.

The RoamAD deal follows Reach's abandoned attempts to partner with listed wireless technology specialist Rocom. The deal would have involved Reach taking a shareholding in Rocom. A memorandum of understanding existed between the two companies but the deal fell over in the due-diligence stage.

"We've been treading water for the last couple of months while we were distracted with the Rocom stuff," said Mr Simms.

A Telecom spokeswoman said the group planned to launch a national wi-fi network in "the next few months".

It is testing wi-fi hotspots in Air New Zealand Koru lounges.

The company is yet to reveal its business model but said it is open to partnering with operators like Reach.