Canada's BelAir Networks rides iPhone wave

CIOL Bureau
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TORONTO, CANADA: Canada's BelAir Networks is riding the mobile Internet wave into South Korea, India, Britain and Brazil, armed with WiFi and small cell products that are already deployed by the major North American wireless carriers that account for most of its revenue.


Founded in 2002, the venture capital-backed company turned its first profit a year ago and now has ambitious growth plans for European and Asian countries as its products undergo trials with major international telecoms carriers.

"We're growing quite nicely organically," BelAir founder and Chief Executive Bernard Herscovich told Reuters in an interview on Friday. "We see this mobile demand only growing."

The company leads the global market for providing WiFi capability to carriers, according to research firm Dell'Oro Group. Its main rival is networking giant Cisco.


BelAir has a particularly close relationship with AT&T. Herscovich said AT&T's long-exclusive carriage of Apple's bandwidth-hungry iPhone makes it a prototype for solutions other carriers must also seek.

BelAir's WiFi access points lessen the strain on AT&T's cellular network in Manhattan's Times Square as well as downtown areas of Chicago, San Francisco, Los Angeles and six other U.S. cities.

The company expects to double that deployment by the end of the year, extending its reach to more than 20 cities. Herscovich said he sees a similar rate of growth with other customers, including cable companies Comcast and Time Warner Cable. What works in the United States should work elsewhere, he said.


"Our view is that if mobile carriers don't really leverage these small cell architectures and unlicensed spectrum (WiFi), data will end up crushing their networks," he said.

Annual sales of WiFi chipsets are expected to reach one billion units per year by 2012, according to In-Stat data.

Small cells such as BelAir's picocells augment traditional cellular towers in densely populated areas, providing more densely packed and evenly distributed capacity.


"Mobile Internet demand is only going to get bigger, so cells have to get smaller," Herscovich said.

While booming use of mobile data to stream video and other content on smartphones, laptops and tablet computers is largely self-evident, the method by which BelAir will fund itself to take advantage of the growth is more ambiguous.

BelAir was tapped as a prime candidate to go public last year but Herscovich would not be drawn on whether an initial public offering is currently in the cards.


"We are assessing constantly what is best for us to go into one type of growth financing or another. The company is strong enough to have the ability to time it the way it wishes."

The company will at some point likely need a cash injection measured in tens of millions of dollars to bolster its global growth plan or acquire rivals, Herscovich said.

"It all depends on how fast the international market develops, which is pretty encouraging right now," he said.


"Once we give the green light on a very broad attack on the international market as opposed to being selective with the leading operators, then it is going to be a number in the tens of millions," he said.

Ottawa-based BelAir has more than 100 employees and invested capital of around $77 million. It is backed by Export Development Canada, a self-financed government corporation that helps finance Canadian exporters, and by Panorama Capital, a Silicon Valley-based fund with Canadian managers.

Other investors include VenGrowth Capital Partners and venture funds linked to Comcast and Deutsche Telekom. The management team has a 15 per cent stake in the company.