Former Cisco executive happy with progress on new Internet firm

Mr Don Listwin shocked the technology world when he quit his $47 million-a-year position at Cisco Systems last year to join Openwave - a young US firm specialising in mobile Internet technologies.

But the 42-year-old Canadian executive, who was second in command at Cisco Systems and hotly tipped to succeed incumbent chief executive, Mr John Chambers, says he has few regrets.

"Even if I was to earn the top job at Cisco I would have been 47 years old since John (Chambers) said he would continue for another five years," says Mr Listwin. "By that stage Cisco would be a $25$30 billion (#27.5-#33 billion) company it would have been more like running a state than a company."

However, heading Openwave presents its own challenges. The firm was created from a $6.8 billion merger of Phone.com and Software.com and was losing money until recently.

"It's been stimulating," says the gregarious, Mr Listwin. "A merger is challenging because there is a lot of different cultures brought together and different geography also. It wasn't just a merger of Phone.com and Software.com there were as many as 12 different acquisitions."

He has driven the company to profitability three quarters ahead of original expectations. Last month Openwave reported a 36 per cent increase in revenue to $109.7 million for the second fiscal quarter ended December 31st, 2000. The firm is forecasting total revenues of $640.8 million this year with gross profit of between 76-78 per cent.

"I believe profit is like breathing for a company," says Mr Listwin. "You are profitable if you spend everything down to break even, that's investing, after that its called losing money."

Openwave has capitalised on the rapid growth of demand for wireless Internet technologies from telecoms companies and Internet service providers. It develops communication services such as e-mail, mobile e-mail, mobile access gateways and messaging gateways.

What is the key to all these technologies? They drive the data revenues which telecoms can extract from mobile subscribers, according to Mr Listwin.

"The cost of voice calls is dropping all the time and mobile companies have stopped trying to buy extra subscribers because its too expensive," he says. "So if they are to survive they need to drive revenues from data by using our technology."

Openwave builds the mobile Internet gateways deployed in the Wireless Application Protocol standard. The company claims 43.5 per cent marketshare against rivals which include Nokia, Ericsson and NTT DoCoMo.

This position was given a boost last week when British Telecom announced a partnership which will mean all its WAP partners will use Openwave's technology.

But what of the challenge posed by DoCoMo's I-mode system which is set to debut shortly in Europe?

"I-mode is a brand and there is no doubt some great technology is built in Japan," says Mr Listwin. "But it is virtually impossible to deploy outside of Japan for a few years."

"NTT is the dominant gorilla in Japan so it can go and tell Panasonic to build a handset a certain way," he says. "Nokia won't do the same for NTT in Europe. It's not in their interest. And so WAP will remain the European standard."

Despite a dramatic slump in Openwave's share price, from a year high of more than $200 to its current $40 level, Mr Listwin is confident a US slow down will not impact on sales.

Likewise, suggestions that a slow introduction of third generation technologies would dent the firm's fortunes are similarly dismissed.

Mr Listwin believes heavily indebted mobile firms, who have spent billions on 3G licences, have an even greater need for Openwave's technology which can drive revenues.

In any case, third generation technology is not required for Openwave to grow because it is concentrating on making data work on GSM networks, according to Mr Listwin.

After all, it was AOL on dialup networks rather than AT&T on a broadband network that won the race for the wired subscriber, he says.

Speaking in Belfast last week at the official opening of Openwave's new offices, Mr Listwin was confident of growth and further investment in Northern Ireland.

The firm inherited its Belfast base following Phone.com's acquisition of the Northern Ireland firm Apion last year for $250 million.

"My expectation is there will be further investment here," says Mr Listwin. "The company is looking at a number of initiatives at how to expand the centre."

There are about 190 employees at Openwave's new development centre in Belfast and the company is considering making it a global hub for staff training. This would mean more jobs and investment.

Mr Listwin stresses the importance of the peace process if this is to happen.

"As a chief executive I am very nervous about partnering in Israel where there is a tremendous amount of technology opportunity. I am being asked to expand and reach out there but I won't," he says. "This is a commentary on what is going on here too. The peace process at an underlying level is incredibly important. The last thing I want here is to have an environment where I have to worry about the safety of my employees."

Mr Listwin's interest in politics goes beyond the peace processes in Israel and Northern Ireland. In the past few years he has helped organise a string of anti-poverty rock concerts in New York, London and Geneva and fund raising for the UN programme NetAid.

"I intend this to be my last job and I've given a minimum of five years," he says. "I would like to work with the UN on an ongoing basis."