Weekly Start-up: Foxcom Wireless
By Efi Landau

From Israel's Business Arena - Globes

Company Name: Foxcom Wireless
Object: broadband fiberoptic communications infrastructure

Israeli company Foxcom, founded in 1993 by Howard Loboda, developed a technology that translates wireless signals to laser ray signals transmitted through fiberoptics. The wireless signal is compressed and held by amplifiers, so as to affect the light source created by the laser ray. The signal moves as a certain rate, switching the laser ray on and off. The optic signal thus vibrates at the pace of the wireless signal from the broadcasting point to the receiving point, which could be many kilometers away. This produces high-speed and broadband wireless signals of up to 2 Mbps over relatively large distances, with very little energy lost during transmission.

Business Card Name: Foxcom Wireless
Founded: 1998
Product: Broadband fiberoptic communications infrastructure
Employees: N/A
Market: Cellular operators
Customers: Soeul, Berlin and Istanbul subways, road and railway tunnel coverage in Europe, IBM Tel Aviv, Israeli cellular phone operators
Competition: LGC of the US, Micom of Germany
Investors: APAX, Israel Seed Partners, Genesis and AIG Orion

This means long-range wireless communications, without antennae or visual lines. Loboda found inexpensive optic components and sophisticated wireless components, and built an even more inexpensive product. In principle, fiberoptics are cheap, despite the image they have of being expensive. The problem always lies in the conversion equipment. Once the price of this component dropped, the product was sound.

For the sake of comparison, coaxial cables used by cable companies require the use of extremely expensive amplifiers. Fiberoptics needs no amplifiers. At a certain distance, fiberoptics is not economically viable. If the cost of the broadcasting and receiving boxes can be reduced, the use of fiberoptics becomes more attractive, particularly for short distances and within buildings.

Foxcom Wireless President and CEO Ofer Ronen: "Foxcom concentrated on satellite communications, a semi-military market that requires high quality signals, but is not price sensitive. Up to the beginning of 1997, most of the company's sales came from the satellite communications market. After initial funding (APAX, Israel Seed and Genesis), I joined the company as senior vice president for marketing and sales. My background includes DSPG, where I met Hanoch Barkat, at the time DSPC vice president of marketing and sales, and currently general manager of APAX."

In 1997, Foxcom entered into two new markets. The first was DBS, with a product enabling reception from a broadcasting dish on the roof of buildings, transmitting to all the apartments via fiberoptics. The second market was cellular communications without antennae. At the end of 1997, the company had reached almost $3 million in sales, and had started sales in the two new spheres.

Ronen: "I was falling off my feet. We had eleven trade shows that year. We had a set of exhibitions for each market. We decided to spin off the company into two separate companies, to take out the cellular communications. I was asked to take over management of Foxcom Wireless in April 1998."

Globes: "What did you market?"
"Communications boxes enabling cellular companies to take the signal from the existing base station and provide coverage in tunnels and similar places. The first customers were companies doing projects for the cellular companies. The first major market was in Korea, and the first project was cellular coverage of the subway train in Soeul. Later, there was an avalanche of other orders from all of Korea's five operators. We covered the Soeul subway trains twice more, for two additional operators."

You laid out fiberoptic wires three times?
"No. Our equipment enables several companies to transmit communications on the same wire. We sell the capacity over and over again."

At a later stage, Foxcom Wireless moved to Europe, where it provided cellular coverage for the Berlin subway (overall length 110 km.) for Deutsche Telecom and rival Mannesman. The company also provided coverage for the Istanbul subway, and road and train tunnels in West Europe.

Foxcom Wireless has recently started cellular installations in large buildings, mainly in Israel, using a specific product, called Litenna. The company conducted such a project in IBM's offices in Tel Aviv, for Cellcom. Following installation, Cellcom provides high quality reception on all 21 floors of the building.

"In high-rise urban buildings, the cellular companies take a penthouse and install a base station. They need to rent a room for the broadcasting/receiving equipment, and place an antenna on the roof. We enable the unit to be placed in the basement or shelter, and lead wireless communications through fiberoptic wires to a small battery on the roof and to the antenna. It can serve several sites. The savings in real estate is tremendous."

Where have you installed the Litenna?
"The first installation was in Israel, in the IBM building. We also have installations in a US casino, in Britain, China, Sweden and other countries."

How do your products converge with the third generation cellular transition?
Third generation penetration plays into our hands, as the solution for broadband communications in this case is via fiberoptics. It can serve as the pipeline for transmission of all future services, without having to rewire the building. I compete with coaxial cables both in price and in applications. I offer a big bonus - the infrastructure for offering additional services."

The public has recently been put off by cellular antennae.
"We're developing a new product, a technology-intensive infrastructure for leasing. I'll lay a cellular system infrastructure in malls and other public places, which will serve all the operators. I will charge each of them either a fee or commission for air time usage."

Who are your competitors?
"We have two major competitors. The first is LGC Wireless of the US, and the second is MICOM Communications of Germany. LGC uses copper wires, not fiber optics. It's cheaper, but quality is inferior."

Fiberoptics is perceived as most expensive.
"Fiberoptics is something that sounds good, but is perceived as suitable for long distances, for underwater cables. Once this perception changes, many possibilities arise. We replace the copper wire, from which they are trying to extract increasingly more broadband, unlimited capacity. The more talk of wider broadband and higher frequencies, the happier we are. In the first three quarters of 1998, we $2.2 million in sales. Our 1999 sales will be double - our orders backlog guarantees it."

Foxcom Wireless recently founded a US subsidiary to promote marketing of the company's products in North America, and started aggressively recruiting marketing, sales, and technical support personnel with backgrounds in the North American communications market. The company has 30-40 installations in the pipeline. In Israel, it works with all four cellular operators testing the installations, and orders have been received.

Published by Israel's Business Arena on January 10, 2000

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