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WiMAX - a boost as Aricent raises new funds?

The injection of new capital into "ideas outsourcing" firm Aricent could be seen as giving quite a boost to the WiMAX hopes in non-emerging countries - if that's the right term for "established Western telco markets" because Aricent is working hand in glove with Sprint and Clearwire in trying to find new markets.

Aricent announced the new funding this morning. It describes itself as "a global innovation, technology and outsourcing company focused exclusively on the communications industry," and this morning, Sanjay Dhawan, [picture, right] president and COO, told NewsWireless that one of his areas of focus would be WiMAX "in old markets," rather than the obvious opportunities in emerging areas.

The new money, from existing stockholder KKR (a large private equity firm, and major shareholder in Aricent) was combined with an injection from Bahrain investor, The Family Office. Figures weren't available for just how much extra money was being provided by each.

Dhawan told NewsWireless that he wasn't impatient about the development of new markets for WiMAX. "It's about 20 years since I last worked on writing IEEE specs," he said this morning. "That last job I did was setting initial specifications for the 802.16 spec so these things take time."

What has to happen, Dhawan said, "is for new markets for 4G services to emerge." As a company which offers what he calls R&D outsourcing to the communications industry, Aricent is working with Sprint, "looking for new sweet spots where mobile applications can grow."

He said: "In emerging markets, the return on investment for WiMAX is very clear. For example, in my home in New Delhi, in India, WiMAX is the only available option if I want broadband; there isn't anything else. But in San Francisco, it's different and the "last mile" application is fully supplied with cable, with copper and fibre services established. So we have to look for new 4G ideas."

Examples? "Well, just one - for example in cars, we might look at replacing broadcast radios, with broadband radios - Internet radios - based on a WiMAX data network. Ideas like that - next generation services on the mobile platform - will be where the return comes from."

In the short term, Dhawan conceded, there are still issues involving the lack of WiMAX devices. "But with the new Intel chipset, that looks as if it would solve some of those problems."

In the official announcement of the capital injection, Aricent today quoted James H. Greene, member of KKR:

"In 2007, we invested in and partnered with Aricent to help make a world class company even better.  Today’s announcement builds on the company’s strong results, providing Aricent with additional capital to continue to grow,"

and also quoted Gartner, which forecasts the global market for outsourcing will exceed $1 trillion in 20121. Kamlesh Bhatia, Principle Research Analyst, Gartner, was the researcher who was quoted:

"The global market for Telecom Operations and Management Systems alone will grow steadily, from $74.6 billion in 2008 to $96.8 billion in 2012. We expect to see vendors begin to take a more vertical approach to address this multi-billion dollar market. Customers too are increasingly considering domain expertise and innovation in their buying criteria along with traditional implementation cost considerations."

 Aricent also stated that it has achieved record business results in its Q1 FY ‘09 quarter, including: 

The announcement ended:

Aricent plans to use the investment capital to accelerate the momentum of engagements with leading infrastructure, application and service providers worldwide, as well as expand the company’s business activities in the Middle East.