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2/10/2006
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Better Cell Signals Indoors Come At A Price

The image of the tech-savvy mover and shaker is one of a businessperson closing a deal on a cell phone while dashing between meetings. More realistic, though, is Mr. Close-the-Deal swearing at his phone when the call drops because of a weak signal in a hallway or an elevator.

Now there's a viable, affordable answer for the dropped-call problem. A range of indoor wireless communications products delivers cell-phone coverage inside buildings, giving employees, contractors, and guests connectivity. Venture-capital investors are convinced, pouring money into vendors, but there's still a sizeable technology risk for IT managers.

Companies are addressing indoor wireless coverage with distributed antenna systems, repeaters, and even in-building base stations, which are similar to the stations carriers mount outdoors. Cost depends on building size, the number of carriers supported, and the number of users. A system from Spotwave Wireless, for example, is priced at 12 cents a square foot per carrier, so a 25,000-square-foot office can be equipped for about $3,000, plus installation. Additional carriers, which are needed for guests, jack up the price, as does installation in older buildings. "A lot of the costs that go into indoor wireless are deployment, not equipment, costs," warns Peter Jarich, analyst at Current Analysis.

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Spotwave last month landed $10 million from Motorola Ventures, the VC arm of Motorola. The startup plans to develop software-based products for home offices and small offices; Spotwave CEO Bill Carlin anticipates more residential use of indoor wireless as businesses push telecommuting. The company's SpotCell Indoor Coverage products include a system to capture an outdoor cellular network and repeat the signal indoors. It's something that's been technically possible for years. "The marketplace is finally starting to catch up with the technology," says Warren Holtsberg, Motorola's corporate VP of equity investments.

Motorola plans to sell its own indoor wireless system aimed at spreading cellular signals through large buildings, though it hasn't set a launch date. The Motorola AXPT access point acts like a mini version of a cellular base station and performs tasks such as Subscriber Identity Module authentication and circuit-switched voice and roaming. The company expects cellular operators to sell AXPT to businesses that want to access Universal Mobile Telecommunications System or High Speed Downlink Packet Access third-generation cellular networks inside buildings. But so far, only Cingular in the United States has such a network.

RadioFrame Networks, an indoor wireless infrastructure company, landed $40 million in venture funding last month from investors including Ericsson Venture Partners, Samsung, and cellular-industry pioneer Craig McCaw, who founded McCaw Cellular. It will sell base stations through carriers to amplify GSM cell phones in homes and offices.

The Time Warner Center in New York embraced the indoor wireless vision last year, deploying antennas from InnerWireless that provide cell coverage anywhere on its 55 floors--and the elevators in between. Indoor wireless became so important that some residents and employees considered switching carriers to ones the building supported, says David Heckaman, a consultant who had been IT director for the building's Mandarin Oriental Hotel. The building now supports four major carriers, which is a must for any company wanting to provide service to guests.

But along with all the startup energy comes emerging-technology risk. The offerings aren't mature--CEO Carlin says Spotwave's next version will add that important multiple-carrier support. IT managers must decide whether to bet on amplifying a third-generation cellular network or wait for Wi-Fi convergence and the promise of dual-mode handsets that switch between cellular networks outdoors and Wi-Fi networks indoors. Current indoor wireless systems can deliver this, but it's still a niche market that very much depends on how big a value a company puts on delivering enough bars on a cell phone.

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