HACKENSACK BASED WIRELESS COMPANY FINDS NICHE
Reprinted from Bergen Record, 1/26/2003
When former President Bill Clinton moved into his new office in Harlem
last year, his staffers discovered they'd have to wait weeks for
Verizon to get them a secure, high-speed Internet connection. Then
Wave2Wave Communications, a scrappy Hackensack-based wireless company,
heard about the problem and jumped at the chance to land the contract.
Now Wave2Wave sales reps can wave around a letter signed by Clinton, thanking the company for its speedy and
efficient work connecting his office to the Information Superhighway. It's the kind of sales tool often so
critical for a small business that depends, in part, on word-of-mouth and customer recommendations.
Although the four-year-old company has some other big name customers, notably the Meadowlands Sports Complex,
it's in the business of selling high-speed Internet access to any size customer. "We even do a dry cleaner,"
says Steve Asman, the company's president. But Wave2Wave's customer list - which numbers about 800 - is only part of the story.
The company sells a technology called fixed wireless, which sends data through the airwaves using radio signals
(in Clinton's case, Internet service is beamed to Harlem from a Wave2Wave antenna installed atop a high-rise in
Fort Lee). Fixed wireless was a red-hot technology that attracted billions in investment during the go-go years
of the telecommunications boom. One company, Winstar, had 29,000 customers when it filed for bankruptcy two years
ago with $4 billion in debt (the company was later bought by Newark-based IDT Corp.).
Despite the high-profile failures, "fixed wireless is a technology with tremendous potential," says Robert Rosenberg,
president of Insight Research, a telecommunications market research firm based in Boonton. It can overcome the advantage
held by large telephone companies that own the wires leading to most of the nation's homes and businesses because it
offers significant cost savings. And that makes it possible for smaller players to create larger and larger businesses,
Rosenberg says. In this niche, Wave2Wave has slowly and carefully expanded. That slow and steady growth was not always
the plan, Asman acknowledges.
During the late 1990s boom, when venture capitalists went searching for companies to give their money to, Asman and his
small team, including Chief Financial Officer Eric Mann, were tempted but they steered clear of the venture market, a move
that arguably saved their company's future. Instead, Wave2Wave attracted the attention of a very small group of private
individuals - including one, a Bergen County multimillionaire who made a fortune in the pharmaceutical industry, and another
who is a prominent real estate developer. Mann said the investors declined to allow use of their names.
The private capital meant Wave2Wave grew at a more conservative
pace and avoided the massive infrastructure build-outs demanded by so
many venture capitalists and Wall Street investors that eventually
doomed other wireless companies. It's also the type of business that
the 39-year-old Asman, a former real estate developer, understands.
"It's an annuity business," Asman says, meaning income streams in
steadily and at regular intervals from the company's customers.
Wave2Wave typically charges about $500 for installation and
from $199 to up to $525 per month for a large bandwidth connection. The
company installs its equipment at various locations and can realize a
profit after it signs up six or seven customers at a single location,
Asman says. One key, which is often cited by analysts, is the speed at
which a fixed wireless connection can be set up.
Wave2Wave was able to provide Internet service to the New
Jersey Sports and Exposition Authority in a week after the DSL
connection for the Meadowlands Racetrack was terminated following the
provider's bankruptcy. The authority had been looking at an eight-week
wait to get DSL reconnected. In fact, the telecommunications bust
created a lot of those kinds of opportunities, Asman said, with
Wave2Wave picking up business after Internet service providers failed.
As for the equipment, a customer needs an antenna, typically
on a roof, to pick up the signal, which is then brought down via a wire
and connected to computers. So-called line-of-sight is needed between
the antenna on a customer's roof and Wave2Wave's antenna. In other
words, both antennas must have a clear path with no obstructions, such
as buildings or landscape, to interfere with the signal. That does
limit the range of the technology, but Wave2Wave has some tricks to
deliver its service to customers, Asman said. And, Mann notes, there is
no problem delivering fixed wireless in poor weather conditions. "The
only thing that interferes with the signal is a sand storm," he says.
Asman, a garrulous Long Island resident who now spends a lot
of time on the Cross Bronx Expressway, chose Hackensack for his
headquarters so technicians could travel easily to customers in the
tri-state area. He says his company expects to become profitable within
the next six months and has plans to speed up its expansion. "There are
plenty of businesses out there; there's room to grow," Asman says.
He predicts that the company will bring in revenue next year
in the range of $10 million to $20 million and, if the market
conditions improve, he won't rule out taking the company public. So
far, the company has focused primarily on small to medium-size
businesses. Its first customer was a printing company just across
Hackensack Avenue, Asman says.
But these days, Wave2Wave is looking at some larger prizes,
with colleges and at least one hospital lined up as potential
customers. Asman likens his company to the growth stages of a human
from crawling to walking to something even faster. "We're about to
start the jogging stage," he says.
***
About Wave2Wave
Privately held Wave2Wave
Communications is a wireless communications provider of high speed
Internet service. The company provides small to medium sized
businesses, in small population centers and rural markets, with a
secure wireless connection to the Internet at speeds of up to 1.54 Mbps
or more. Additionally, the Company offers an array of other services
including E-mail, Web Hosting, Private Data Networking, and Security
Solutions. For more information about Wave2Wave Communications visit
www.wave2wave.com
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