Big punt on Walker Wireless

By PETER GRIFFIN

New Zealand investors, including Stephen Tindall and Craig Heatley, are joining Vodafone and a US venture capital company to inject $20 million into communications company Walker Wireless.

The cash will allow Walker Wireless to commercialise its wireless broadband technology, first in New Zealand, then Australia and parts of the Pacific, says founder Rod Inglis.

Backing the company for the first time is California-based telecoms investor Clarity Partners, which is putting in $5 million but will increase that to $15 million in about six months.

Clarity controls a $1.7 billion global equity fund.

Existing major investors, including Heatley, Tindall, Todd Corporation and Inglis himself, have raised their stakes by a total of $12 million, with a commitment to increase that again within six months.

Heatley, Tindall and the Todd family all hold stakes in failed technology investor eVentures, which Heatley last week proposed to liquidate, giving invested funds back to shareholders.

A further $3 million is being put up by Vodafone to finance a wireless broadband trial with Walker Wireless, bringing the total new investment to $20 million.

Walker Wireless issued new shares to existing and new investors.

The broadband trial will begin this month in the Auckland central business district, Herne Bay, Remuera and Penrose and include up to 500 home users and businesses.

At the centre of the trial is technology that Walker Wireless has had for some time - palm-sized wireless modems sourced from California-based IP Wireless.

Walker Wireless has exclusive rights to use them in New Zealand.

The modem plugs into a computer, allowing high-speed internet access without needing to plug into a phone socket, unlike Telecom's ADSL (asynchronous digital subscriber line) products.

In theory you could take a laptop anywhere within 30km of Walker Wireless' base stations and enjoy high-speed internet access.

The technology is "near-line-of-sight", which means a user does not have to be directly in line with a base station - a huge improvement on earlier technology which required line-of-sight to work.

Walker Wireless managing director Bob Smith said the services would run on the spectrum it bought for $4 million in the Government-run auctions that closed last January.

"The Vodafone association means in rural areas we could use their cell towers. There's huge opportunity there," said Smith.

Vodafone director Tim Miles said that, if commercialised, the services would be sold under the Vodafone brand. The two companies would share equipment sites where possible.

The deal also gives Vodafone the option of taking an equity stake in Walker Wireless, which will form an unspecified portion of a second capital injection of $40 million.

Smith said pricing would compete well with Telecom's ADSL. IP Wireless modems sell for about US$300.