3G delays good for some

GoAmerica, OmniSky target enterprise customers

While most of the wireless world's attention is turned to grappling with next-generation technology delays, wireless Internet service and solutions providers GoAmerica and OmniSky are quietly succeeding by targeting corporations that want wireless data now.

“Rather than on saying there will be 50 million data users by 2005… we understand where the business is: It is in the business space,” said Joe Korb, president of GoAmerica

By targeting enterprise customers, GoAmerica is in the right place at the right time. “Relative to wireless carriers that offer single-network solutions, GoAmerica can address an enterprise's total needs,” according to a Morgan Stanley Dean Witter report.

Both companies also are benefiting from a general slowdown of 2.5G and 3G, said Larry Swasey, president of Allied Business Intelligence. If such companies can continue offering wireless data products, they could benefit from delayed competition from wireless carriers, he said.

The two will be challenged once other wireless carriers' data strategies catch up.

Korb is trusting history as a guide. “If we look at how the wireline Internet business grew, the same questions were asked of UUNet and others,” he said. “Those that can deliver high-quality telecommunications cannot always deliver high-quality systems expertise.” Indeed, carriers seem to be losing ground in providing wireless Internet services (see figure).

At the end of the second quarter, GoAmerica had 100,647 subscribers, a 41% increase over the 71,587 subscribers it reported in March. The company's revenue for the three months ending June 30 was $9.8 million, a 22% increase over the $8 million reported in the first quarter and a 375% increase over the $2.1 million reported for the same quarter in 2000.

OmniSky experienced huge growth in the second quarter with revenue of $5.4 million, an increase of 590% from the $0.8 million reported for the second quarter of 2000. After the company introduced software that would make wireless access to corporate e-mail easier, some industry observers saw this as a way OmniSky could gain an advantage as a wireless data provider in the enterprise space.

“With OmniSky making moves to provide corporations the opportunity to wirelessly enable their work force in a grand scale, competitors must ensure their own solutions are in place,” wireless analyst Jeffery Rickard said in a Current Analysis report.

OmniSky could not be reached for comment.
Lynnette Luna contributed to this story.