IPWireless separates from NextWave

IPWireless today re-emerged as an independent company after spending 19 months under the wing of NextWave Wireless. IPWireless’s original management team took over the reins of the time-division CDMA technology firm after securing a 75% stake from NextWave for a cost of only $1.5 million, a fraction of the $100 million NextWave paid for the company in May 2007.

IPWireless is now free to pursue its unique infrastructure strategy, which focuses on the unpaired spectrum licenses held by UMTS operators, particularly in Europe. Many UMTS operators won two spectrum licenses at their respective 3G auctions: one set of paired frequencies, over which they have deployed their wideband CDMA networks, and a single unpaired license, which for the most part have gone unused. To use the unpaired license, operators need to deploy a time-division duplexing (TDD) technology, which transmits the uplink and downlink over the same frequencies, but so far few vendors have commercialized such technology. When IPWireless launched in 2002 it targeted that niche, developing two TDD technologies. The first was a mobile broadband data technology, called TD-CDMA, while the second was a mobile TV technology called TDtv, which used the spectral band as a one-way digital video transmission band.

IPWireless attracted interest in both technologies and landed a major commercial contract for TD-CDMA with T-Mobile in the Czech Republic. Its “Internet 4G” gear now covers 60% of the country. On the TDtv front, IPWireless engaged in several trials, but so far only Orange has deployed the system commercially, in a pilot network in London run by Orange and T-Mobile. When NextWave bought IPWireless last year, it put its TDtv technology toward developing a WiMax video service, which it then began incorporating into its new 4G chipset business. NextWave, however, began to run into financial trouble as credit and capital markets dried up. In September it announced it would sell its infrastructure divisions, including IPWireless, to raise cash for continued operations.

While IPWireless’s management got its company back at a huge discount--$1 million for the stake and $500,000 to reimburse NextWave for its original acquisition expenses—it faces the same problems as NextWave: staying afloat amid a troubling economy. The new company, however, said it has secured a long-term financing commitment of an unspecified amount from an unnamed strategic partner.