Vyyo looks to China for economic salvation

Having seen the U.S. market for fixed broadband wireless equipment shrivel and disappear, Vyyo is looking overseas – and particularly to China – for its economic survival.

Vyyo, in a fourth quarter earnings conference call, said it derived about 67% of its revenue, or $2.2 million, from WorldCom in last year’s fourth quarter. WorldCom has since announced a moratorium on future fixed wireless deployments while next-generation technology is developed, forcing Vyyo to look to China, where it derived $700,000 worth of fourth quarter revenue. Another standby, Latin America, has also been experiencing economic turmoil, essentially closing that door.

“The challenge is not our products or technology, but how much money people have in this market environment and when they have the money to deploy,” said Davidi Gilo, Vyyo’s chairman, CEO and interim CFO. “We believe China potentially has the characteristic to be a significant market, but it’s really in the early stages.”

Gilo said that Vyyo is taking steps “to make sure we are not chasing a lot of wild geese” in its effort to sign up new customers in a nasty worldwide economy. The potential, he said, is for Vyyo to “go around the world and spend a lot of money on marketing and sales, and end up, if [we’re] lucky, with some kind of trial to one system that you have to give to the customer for free.”

Vyyo is involved with trials. The company is currently working with Andrew on a field trial of its non-line-of-sight (NLOS) technology in Phoenix, Ariz. NLOS is a cornerstone for U.S. fixed broadband wireless carriers in their next-generation plans which are expected to take at least a year to evolve.

Vyyo also is looking at products other than in the fixed broadband wireless space, Gilo said, but noted, “it’s very early and premature to discuss them.”

Vyyo, said Gilo, is confident that it will at least be able to take a crack at the emerging opportunities. As of Dec. 31, the company had $84.1 million in cash, cash equivalents and short-term investment balances, and its stock continues to be above $1 for the past three months.