Sparkplug scales with broadband wireless buzz
By Dan O'Shea

Jul 17, 2006 12:00 AM

If it's any indication of what may come for the broadband wireless market, several of the companies making news in the sector recently are guided by veterans of McCaw Cellular, the company that turned the mobile industry into a fiercely competitive national market. These include service providers Clearwire and Nextlink, but don't forget about Sparkplug, a small broadband wireless service provider based in Chicago that is beginning to make more
noise on the broadband wireless scene.

The company, which is headed by McCaw vets Bill Malloy, Sparkplug's CEO, and Steve Hooper, the company's chairman, last week announced that it has merged with two other regional service providers — Prairie iNet in Des Moines, Iowa, and Telespectra in Scottsdale, Ariz.

Under Sparkplug's post-merger structure, Malloy will lead the organization as CEO, along with senior executives Jeff Hardesty, currently CEO of Telespectra; and Neil Mulholland, CEO and founder of Prairie iNet. Malloy said he's known both Mulholland and Hardesty for several years. The resulting company will operate under the Sparkplug name and combine Sparkplug's markets of Chicago and Nashville; several Midwest markets served by Prairie iNet; and Telespectra's networks in the Southwest covering Arizona, Colorado, Nevada, New
Mexico and Southern California.

“We're all wireless guys from way back, and if you look at what's been happening the last few years with broadband wireless, we're finally at the point where the technology is meeting up with customer needs,” Malloy said. The merger of the three companies was led by venture capital firm Ignition Partners, in which Malloy is a venture partner and Hooper is
a founding partner.

Malloy said the companies merged to chase a common market of business customers with specific needs, including the potential of growing businesses to increasingly use broadband wireless to communicate among multiple branches and offices in different markets.

“As businesses deploy more IP-based services that are mission-critical, scaleable high-quality committed bandwidth is a key enabler,” said Hardesty in a statement. “This merger lets us extend our operational expertise in meeting these needs to more business
customers across the combined company.”

However, Malloy said that the beefed-up Sparkplug also will watch for other merger and acquisition opportunities. “There's no secret that there's a lot of consolidation in this market, and is this deal being put together to go and do more merging and partnering?
That's certainly something we'll look at,” he said.

Broadband wireless market consolidation has been top of mind for the last few years, as the technology has gained credibility, and investors and potential investors have looked at how to encourage scalability and consistency in a market characterized by hundreds of Mom-and-Pop wireless ISPs. Companies like California-based NextWeb and Texas-based AirBand Communications have driven much of the consolidation early on, and NextWeb itself was
acquired by Covad Communications last year.

Sparkplug is operating in both licensed and license-exempt frequencies. Its licenses are in the ranges of 6 GHz, 11 GHz and 18 GHz, license-exempt operations include 5.2 GHz and 5.7 GHz. These frequencies, with the exception of 5.7 GHz, aren't currently being
considered for WiMAX certification, but Malloy isn't feeling left out.

“Five or six years ago, we began to study WiMAX very deeply because we were the guys who genuflected at the altar of licensed technology,” he said. “But we have been impressed by what we have been able to do in the unlicensed frequencies to make this work and meet customer needs. We are going to see WiMAX in our future at some point, but for now, it's
not something that we're worrying about.”

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