Wireless web firm a breath of fresh air

Airspeed's network has grown to become a nationwide service, writes ADAM MAGUIRE

A RELATIVELY LOW profile belies the successes of wireless broadband provider Airspeed Telecom, with revenues and client numbers continuing to rise, even in difficult times.

The company – which began in 2002 with a heavy focus on managed services – now employs 35 people in Dublin and Cork and boasts big-name customers like RTÉ, VHI Healthcare and national education network HEAnet.

According to managing director Liam O’Kelly, its success stems largely from the decision to pursue natural growth from day one. “The fundamental difference between us and the other companies is that we have been built through organic business and it’s always been profitable,” he says.

“We’ve never set out to acquire a large number of subscribers just so we can attract a big telecoms company to come and buy us on the basis of our subscriber numbers.

“Instead, we’ve set out to build a business that has recurring revenue, built on organic growth, with no big venture capitalists looking over our shoulder.”

At first the majority of Airspeed’s revenue was generated from the installation of equipment for mobile network operators. Over time however, the focus has switched entirely to the company’s own wireless network, which has grown to become a nationwide service. “In the first couple of years represented quite a high percentage of our business, but we’ve converted that now to a 100 per cent recurring revenue model where we’re solely focused on our own network,” says O’Kelly.

The most recent customers to be added to that network are 31 rural schools to which Airspeed will now provide broadband on behalf of the Department of Education and HEAnet’s Broadband to Schools scheme.

This represents 40 per cent of the 78 schools covered, and schools as remote as Tory island and the Aran Islands will now fall under the company’s remit.

This is the latest in a string of deployments with educational bodies that, O’Kelly says, make up 30 to 40 per cent of its business. For example, the company provides 100Mb of bandwidth to the Letterfrack campus of Galway-Mayo IT. And, at the start of the year, it provided a WiMax trial in Dublin City University.

Besides education, Airspeed also provides services to large businesses and SMEs. O’Kelly says one of its most important strategies is to only expand the network when there is a customer already waiting at the other end. Once that connection is in place, the company can seek out other potential customers to connect to it.

“We’ve never built anything that didn’t have a customer attached as part of the deal. As the network gets bigger and we add more customers in the area, the cost is likely to get lower.”

As a lot of the clients the company has are on multi-year contracts, this allows for a recurring and reliable flow of revenue, which was €4.2 million last year.

That was up 16 per cent on 2008 and this year the company expects to increase revenues by 20 per cent. O’Kelly projects a further 25 per cent rise in 2011, with a caveat attached relating to the national situation.

All of the profit is reinvested in the network, with €2.3 million already ploughed back into infrastructure this year. Airspeed’s wireless network is the biggest outside of the mobile operators, and so it is in the rare position of being able to provide broadband independently of the likes of Eircom.

O’Kelly accepts, however, that wireless broadband’s bad reputation when compared with fixed-line has not made life any easier for the company: “Wireless technology is ever present in all communications technologies that surround us, even when we might not be aware of that,” he says. “That said, they got a bad reputation and deservedly so and things like the rural broadband scheme contributed to that.”

O’Kelly puts a lot of this blame on the lack of regulation in the market, which he says made it far too easy to become an operator.

“If I want to drive a car, I need a licence; if I want to be a radio amateur, I need a licence, but if I want to build a radio-based broadband network, I just have to fill in a form . . . I don’t have to show any technical expertise in deploying that network.”

His criticism of the Government’s rural broadband scheme, which aimed to provide consumer broadband to remote locations in the country, is particularly pointed.

He says its basis was flawed from the start, as it was modelled on an old scheme to provide running water to rural areas. He hopes the next phase will learn from the US.

“There you get a repayable loan rather than a grant. There is equipment selected and approved in advance and you need to have good engineering behind it.”

Airspeed itself has had very few dealings with the consumer market, however, besides offering infrastructure for some companies in the space. To some degree, this is because it would not fit with its organic growth strategy, but that is not to say O’Kelly is uninterested. He says it is an area he would like to operate in if only he could see a way to make it profitable.

“I feel that the consumer market is heavily flawed, first in the way that the service is delivered to the customer and second in the way the customer is fooled into the service they are buying.

“I don’t think there is a viable business model there for most of the operators currently in the market today,” he said.

“I would have an interest in it and I would love to get involved but I can’t see a business model other than one that would drag your company down.”