Local News

WindChannel Sells Off Fixed Wireless Broadband Business, To Concentrate on Services

Posted May 15, 2006

— RALEIGH, N.C. -

WindChannel Communications

is getting out of the fixed broadband wireless business but will continue to offer wireless fidelity (WiFi) and professional services for business customers.

WindChannel, a Raleigh-based firm, has sold its network operations and telecommunications division to Dallas-based

airBand Communications

. airBand, which has some 2,000 customers in six metropolitan markets, touts itself as the largest provider of fixed wireless broadband services to businesses in the country.

WindChannel will now focus its efforts of helping businesses design, install and maintain wireless infrastructure as well as wireless cloud services based on WiFi technology, said Chief Executive Officer Randy Choplin.

"They made us an offer we couldn't refuse," Choplin said of airBand. "They could afford the opportunity to grow a lot better than we could."

Growing a fixed wireless broadband, or high-speed services delivered via line-of-sight transmission, network would be expensive, he added. "It's a business where if you don't have a national presence it's hard to capitalize on the amount of infrastructure you would have to invest in. We would have to invest heavily or focus on services."

Terms of the acquisition, which closed on May 1, were not disclosed. Choplin said the deal was "all cash".

"WindChannel will not go away," Choplin told WRAL Local Tech Wire. "Because the professional services segment for wireless is growing so fast and furious, we decided this deal gave us the opportunity to focus on that."

Choplin, a long-time telecommunications executive, launched WindChannel in 1999. Of its 13 employees, five will join airBand, including Chief Operating Officer Greg Berry. He will run operations in the Southeast for airBand, Choplin said.

airBand is acquiring contracts for approximately 120 customers as well as WindChannel infrastructure for fixed broadband wireless provisioning and service in Raleigh, Durham, Charlotte and Greensboro.

Choplin has plans to expand WindChannel, saying that the company is considering making its own acquisitions.

"We are still growing. Our revenues will probably be $3.5-4 million in professional services alone this year," Choplin said. "We'll be doing a lot of hiring in the next 90 days. We expect to add five to 10 engineers."

WindChannel will continue to design, engineer and furnish wireless infrastructure for clients such as local governments, the hospitality and multi-dwelling unit industries, he explained.

airBand, which is privately held, closed on $8 million in venture capital funding in February and launched an acquisition strategy. It offers service in Dallas, Austin, Baltimore, Houston, Philadelphia and Phoenix.

"This acquisition expands our coverage into the Southeast, providing North Carolina businesses with access to a robust data network that delivers a level of redundancy and scalability that can't be matched," said Mark Spagnolo, airBand's president and CEO, in a statement. "As a result, we can enable companies of all sizes to harness the power of our network to take advantage of innovative broadband solutions - including dedicated bandwidth up to GigE speeds, voice over IP and remote data protection - all of which are increasingly top of mind as companies tackle their business continuity challenges."

WindChannel, which Choplin said is profitable, is backed by two private equity funds and four high-net-worth individuals.

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