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.
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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