RoamAD looking to make overseas deal

By PETER GRIFFIN

Wireless hotspot operator RoamAD may end up launching a commercial network overseas before it generates revenue locally, with negotiations with an "international telco" under way.

Chief executive Paul Stoddart said the RoamAD model had drawn interest from an overseas network operator, though he declined to say which telco and in which region.

Hoping to tie up a $10 million plus capital raising round before Christmas, RoamAD was considering whether to sell its services overseas through a licensing or product model.

"The choice we make will impact on the amount of capital we raise," Stoddart said.

RoamAD has been negotiating with Telecom, TelstraClear and Vodafone for months, looking for a "netco" relationship that will see it wholesale hotspot services to a network operator with infrastructure and marketing muscle.

Stoddart told venture capitalists at last week's Mobility Investment Forum that RoamAD would look to wholesale a 128kbps wireless service to a network provider for around $70 a month.

Dual mode cellular/wi-fi cards will be issued to subscribers so they can switch between the mobile operator's cell sites and RoamAD's hotspots that will initially cover 50sq km of Auckland and spread to central areas of Wellington and Christchurch.

But industry sources say RoamAD may find a deal with one of the major network operators elusive as the network operators balk at its wholesaling structure and fear their own wireless services will be cannibalised.

"Telecom could roll out wireless hotspots tomorrow if they really wanted to. RoamAD shouldn't wait for the telcos, it should just get out there and show it can be done," said a telecoms executive who has dealt with RoamAD.

Also pitching to a panel of venture capitalists at the mobility forum was wireless data developer ECONZ and its new offshoot Integrated Wireless Corporation. IWC is seeking up to $2 million in capital to develop a "wireless router" that will allow back-end data systems to communicate across disparate mobile systems from GPRS and CDMA to radio and pagers.

Electronic Data Holdings was also looking for $2 million for its electronic stock tracking device.

EDHL chief executive Bryce Whitcher said handheld devices "with the power of a 486 computer" had been designed to communicate with small electronic tags that could be attached to everything from cows to gas cylinders.

EDHL is expecting turnover of $40 million in three to five years and $18 million earnings before interest and tax in the same period, assuming sales of around 20,000 systems.

ABN Amro had valued the company at $12 million to $18 million.