OptiWay reduces cost of optical communications

Israeli startup OptiWay Ltd. has developed a technology intended to reduce the cost of using optical communications and improve the performance of communications inside buildings.

An Israeli startup called OptiWay Ltd. has developed a technology intended to reduce the cost of using optical communications and improve the performance of communications inside buildings. In October 2006, the company raised $5 million from Canadian investment bank ASG, after one of the bank's executives, Leo Grunwald, was impressed by the company's commercial potential. Today, the company is trying to raise an additional $1-2m., in order to develop technology that would enable adapting WiMAX technology to mobile communications. In the communications sphere, optical communications provide a much cleaner technology than copper wires, for example. However, optical communications are expensive due to the need for end units that convert the optical signals into electronic signals, and vice versa. Many companies, such as Israel's Mobile Access, US-based Andrew, as well as OptiWay, have developed end-unit communications in an effort to lower the cost of using optical communications. The company's solution is intended mainly to serve cellular networks. OptiWay CEO Luka Bercovici tells TheBpost that the technology developed by his company will reduce the costs of using optical communications by about 40%, and they will be equivalent to the cost of copper-wire communication infrastructure. The use of optical communications in enclosed buildings is problematic, due to the multiplicity of formats, which requires building restrictive communication infrastructures, and mainly restrictive antennas. One of the solutions to the problem of cost is to connect the cellular operators in Israel in a single, common communications infrastructure that would reach the end customer. OptiWay's product, the AllSystem, is based on technology called OTDMLL (Optical Time Division Multiplexing by Locking Lasers), which enables convergence of a number of applications using different communication technologies. These applications include fixed-line telephone services, cell phones, Internet, and video, which would be operated through a single optical fiber - in other words just one unit converts optical signals into electronic signals, and vice versa. The AllSystem is especially adapted to the cellular communication infrastructures in an urban setting. The system enables various providers to work together on one communications network, to increase the capacity of the new or existing infrastructure, and to provide expanded cellular communication services, without increasing the number or power of antennas. OptiWay makes it possible for cellular operators to share infrastructure, in an effort to reduce the number of antennas (more partners on one antenna). By using technology that improves the quality of coverage and reduces the interference in transmission between the operators, OptiWay's solution for sharing infrastructure makes it possible to maintain each provider's independence and separateness, and complete control over communications. Thus, for example, in multi-storied office buildings about 20 antennas are spread out over each floor in order to provide effective coverage for all of the operators. In order to upgrade a communications network that would also suit the needs of 3G (third generation), it is necessary to increase the number of antennas by at least a factor of three. OptiWay's integrative technology in that space would make it possible to unify the four providers, so that one antenna would do the work of four. That would lead to a significant reduction of setup and maintenance expenses. Similarly, communications would be a lot more efficient, since the technical interference caused by the large number of antennas would virtually disappear. The company's technology enables the transfer over one optical fiber by OTDMLL. On each optical channel, the light source, the laser, receives its own transmission time, and at any given moment one laser transmits and transfers the data in the shortest amount of time. The technology significantly improves the existing technologies' performance. Using this technology on the cellular infrastructures, for example, would yield a significant cost savings, since the optical fiber's capacity is four times greater than that of the existing coaxial connection (which is based on copper cable). Increasing existing infrastructure systems' capacity would upgrade them to 3G communications. Using the integrated optical fiber eliminates the need for installing additional antennas to strengthen transmission. The new technology also enables the operator to adapt the network's capacity to the amount of traffic it desires. OptiWay began marketing its systems in the third quarter of 2006, and in 2007 it forecasts sales of about half a million dollars. According to ABI Wireless, a consulting firm, the cellular companies' infrastructure in an urban area is estimated at about a billion dollars. Potential customers include cellular operators in Israel (Pelephone, Cellcom, Orange and MIRS), and similar companies abroad. The company is marketing itself through integrators that install the infrastructure for the cellular operators, as well as set up and maintain cellular sites. Besides the AllSystem, which has been marketed for nearly half a year, the company is using its core OTDMLL technology in order to develop another product, called AllAccess MAX, which would provide a solution for the technological problems of installing WiMAX antennas inside buildings. According to ABI Wireless, this market will see turnover of more than $3 billion by 2010. WiMAX is a revolutionary technology that will enable entire areas to connect to the Internet for free and, more importantly, to use IP (Internet Protocol) phones for free. When the technology is installed in enclosed buildings, like an airport, hotels, train stations, etc., it will be possible to connect to the Internet for free using a laptop computer and to talk for free on an IP phone. The AllAccess MAX is expected to reach market this April, before its competitors, and for that purpose Bercovici is doing a private placement of $1.5-2m. "We will have a time advantage, as well as a technological advantage, and I believe we will reach sales of $10m. in 2010," Bercovici says. However, Bercovici knows that a small company like his is incapable of competing in this huge and competitive market without the backing of a large company since millions of dollars in investment are needed in order to establish a suitable marketing system. Bercovici is hoping for a strategic partnership or, in other words, to be acquired by a large multinational company, which would market the products worldwide.