Interview with Eliot Burdett, Founder of UpTangent and Member of the Ottawa Wireless Cluster Executive Committee
November 13th, 2002.

Q: What is the profile of Ottawa’s wireless sector?

A: Ottawa’s wireless ecosystem encompasses over 60 companies offering world-class hardware, software, services and infrastructure solutions. We currently employ more than 2,000 engineers with startups launching every day that will benefit Canada and bring new wireless applications, services and devices to the global marketplace.

Q: A lot of people say the wireless industry is at an all-time low point. How true is this?

A: I don’t see it as a low point at all, but a time of great change. For many years, the wireless business was built on growth in subscribers. The industry is now facing lower growth and the focus is on strengthening what we have. For the carriers that means focusing on churn reduction, switchers from other carriers and increasing ARPU (Average Revenue Per User – per month). Since most carriers in North America are losing money, spending is flat on new infrastructure. A lot of the business is becoming commodity, so carriers are looking for ways to differentiate with new services and exploring how to make money from new application technologies.

At the same time, there are a lot of good things happening. The carriers have introduced new high speed, packet-based networks, device manufacturers have introduced new data ready handsets and many new innovative applications have been brought to market.

There is also a growing desire for people to become more mobile. We see lots of applications with mobile devices like notebooks and hand-held devices in general business and verticals. Huge growth in residential and business wireless LANS are creating a mobile population that will want to access their information everywhere.

Q: There are two executives from Canadian cellular carriers speaking at the Ottawa

Wireless Cluster this week. Why are the carriers so important? A: The wireless carriers are in the middle of a long value chain between technology vendors and consumers. The carriers purchase infrastructure, devices and applications that are then bundled and sold to business customers and consumers. To a large extent, the carriers dictate what services will be adopted by the market meaning that they dictate the pace of the industry and ultimately, the success and failure of many wireless companies.

Ottawa has a long history in telecomm and it is no surprise that we have many companies that are partnering with the carriers to advance the wireless sector.

Q: What about the handset manufacturers? Are they a powerful influence?

A: Absolutely. There are some very innovative new devices coming from the handset makers. Devices are evolving from single use such as voice only to smart, multi function devices with colour and the ability to run business applications and play games.

Q: Where are the application vendors in all of this?

A: The boom years saw the birth of many companies focused on delivering features rather than real value. Now resource strapped, these companies are under pressure to redefine themselves and without sufficient finances, a lot of startups are incapable of meeting carrier grade performance and scaling requirements.

The good news is that Ottawa boasts several innovative companies that are developing the software infrastructure required to deliver the next generation of wireless applications - TrueContext, Taral Networks and Zim, to name a few.

The other piece of good news from a startup perspective is the number of bright and talented software people that are looking at ways to create value. These people used to be embedded deep in the large systems manufacturers in Ottawa. Now they have to find smaller opportunities that leverage their software skills. One of the best ways to do this is to create applications that people can use.

Q: What do consumers want?

A: I think most wireless consumers want to buy things that make a difference in their lives. They want simplicity and freedom from technology overload. Voice is still the killer wireless application for most people, with email close behind. The average consumer is confused by all the hype around new wireless services, advanced phones, different networks and operating systems, so it is incumbent on the industry to educate the consumer on how they can use wireless to improve their lives.

Q: What has to happen in order for the industry to continue to prosper?

A: I think the industry needs to be open-minded about partnering across the wireless ecosystem. A good example of this is SMS interoperability. Last year, Canadian carriers began working together to enable SMS messages to be exchanged between carrier networks.

Another great example of partnering is that the carriers have established formal programs to invest in external research and development. A prominent Canadian example of this is the Bell Mobility Investments program that provides grants to companies that can help leverage Bell Cellular's existing service infrastructure. Technology vendors involved in BMI's program benefit from access to Bell's technical team as well as its market of subscribers. Each party has a vested interest in seeing the other be successful.

Here in Ottawa, we have established a wireless cluster organization devoted to developing Ottawa's wireless ecosystem. The Ottawa Wireless Cluster provides networking, marketing, awareness, events and advocacy for companies in Ottawa working in the wireless space. We work with business, government (federal, municipal and provincial), and institutions (universities, colleges, education) and organizations (OCRI, SmartCapital, other business forums) to promote the development of Ottawa's wireless ecosystem.

Q: So how will this all play out and where can we expect new growth?

A: Wireless has phenomenal growth potential. Total subscriber numbers are still rising, even if at a slower rate.

WLAN technology will open people's eyes to the possibilities of high bandwidth wireless and drive the demand for new applications.

Gaming is also beginning to catch on and will drive new demand for wireless.

An area where we should see new growth are from people replacing wire-line services for wireless - people are increasingly using cell phones as their primary phone and not having a phone installed in their home.

Another area where I think we will see strong growth is in machine-to-machine communications. As computers become cheaper and intelligent devices become pervasive, I think we will see wireless as the primary method for computers to talk to each other. Already, vending machines communicate with supply depots to notify distributors restocking is required.