Cantech Letter talks to Edgewater Wireless President Andrew Skafel

Through takeovers, mainly by larger US-based firms, the Canadian markets lost some of our best and brightest last year. A closer look reveals that Ottawa was hit particularly hard.

Firms like MOSAID, Bridgewater and Zarlink are no longer Canadian. The biggest hole to fill, of course, is that of Nortel, which declared bankruptcy on January 14, 2009. Ottawa tech legend Terry Matthews says there is a limited window of time to capitalize on the heritage of talent and infrastructure in our nation’s capital.

Matthews says tech in Ottawa has a “…shelf life of seven years at most..” adding, “This is a really good time to start a new company before the talent disappears.”

In January, Edgewater Wireless (TSXV:YFI) went public through an RTO. The company, which has twenty patents in the wireless space, thinks it may have the right solution at the right time for easing the traffic burden that iPads, BlackBerrys and Android smartphones have placed on already stretched networks. Recently, Cantech Letter recently caught up with President Andrew Skafel.

Andrew, could you tell us a bit about the history of Edgewater Wireless?

Edgewater Wireless is a spinoff of an established defense R&D contractor, Edgewater Computer Systems. Edgewater Computer Systems has been around since 1988 and it predominantly works with the US air force developing advanced data bus infrastructure for things like the F-16. Over the course of time, Edgewater Computer Systems built and acquired a portfolio of IP in the wireless space. And what we have done is spun off the IP and some key staff to be Edgewater Wireless. Our core products are in the next-generation wi-fi space.

Can you talk about your patents and where you see the company deriving value from them?

A good starting point to note is that we are really at the end of an era today. Traditional wi-fi technology uses a single channel per radio. What we are finding is that is just not good enough for all the bandwidth generated by things like iPads and iPhones. Traditional wi-fi delivers the equivalent of a single lane gravel highway. For example, if I was driving down the highway in my minivan and you were driving down the highway in your Porsche and you were stuck behind me, you can only go so fast. Traditional wif-fi is like that. What Edgewater wireless has done is we developed a next generation wi-fi solution that uses a multi-channel radio. So we are delivering the equivalent of a multi-lane highway, where I can drive in the slow lane, you can drive in the fast lane, and someone else can have a third lane. Our patent portfolio is around the multi-channel wi-fi space.

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This story is brought to you Zecotek Photonics (TSXV:ZMS). As of November 16, 2011, Zecotek owned title to or controlled more than 55 patents and applications. Click here to learn more.

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We spoke with Dave Caputo of Sandvine a few months ago and he described bandwidth as a “Field of Dreams”; if you build it they will come. The data usage of wireless devices seems unquenchable…

I couldn’t agree more with that statement, The drivers of bandwidth usage are really hammering mobile providers networks. 3G network operators like a Telus or Rogers, their network capacity or bandwidth is being taken over by the proliferation of these network hungry devices. And that’s really the space Edgewater Wireless plays in. We relieve or solve the problem using patented proprietary technology.

What particular verticals are you going after here? Where’s your sweet spot?

Well we believe we are bringing a highly differentiated product to the market, and so we have a wide range of addressable markets. A couple of key areas we focus on: we focus heavily on the 3G data offload market, helping mobile operators relive congestion on their networks. That’s one very defined segment for us. We also target the municipal wi-fi segment, especially in emerging markets like the BRIC nations. Brazil, for example. They are really driving to get basic internet access to the masses. Wi-fi is an excellent technology for getting low cost internet access. Third, there’s the wireless ISP space. In many emerging markets there’s no wired infrastructure. Even in remote areas in Canada there’s no wired infrastructure. They use products like ours that sit up on top of a tower to bridge the last mile. Finally, we also have a real demand in the enterprise wi-fi space, such as convention centers or football stadiums where there is a high bandwidth density. That really plays well with our products.

The “last mile” has become a buzz phrase. What does it mean?

In a place like Canada most of our houses and offices actually have telephone lines or cable lines connecting them to the outside world. We call the mile from the telco to your house the last mile. In many emerging markets they don’t have a wired infrastructure in place. That last mile is where we can fit in.

The more mature markets are having trouble with capacity issues. Is it your contention that even if you get the problem solved there that you have room to grow because you then have the rest of the world to deal with ?

Exactly. The problems that Verizon or Rogers face are problems that the emerging markets face as well, but for different reasons. When AT&T launched the iPhone and iPad their networks were absolutely hammered by the deluge of data the devices were taking. That type of dynamic is something that is a global dynamic.

What’s the environment like in Ottawa right now. Is there still a wide telecom talent pool for you to hire from?

I think the depth of the talent base in phenomenal. I have spent a lot of time in other regions of the world and the thing that always impresses me in Ottawa is that you have a highly skilled engineering base. We have access to folks who worked with Nortel and other major telco vendors. The strength of our team is phenomenal.

What’s your financial position like right now?

In our RTO we had an oversubscribed private placement, in which we raised about $6.5 million. And there’s another $10 million in warrants outstanding so the cash position of the company is quite good at this time. I think our baseline business is funded well today.

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