ArrayComm, Marconi to Collaborate on Wireless Project

ArrayComm Inc., a closely held wireless technology firm, and Britain’s Marconi are expected to announce today that they have reached a $300-million deal to co-develop a device that would let wireless carriers provide better service to five times as many customers.

The companies said they will develop more modern base stations that connect wireless signals with land-line phone networks, using third-generation wireless technology that promises greater bandwidth and always-on Internet access.

The five-year deal combines base stations of the British telecommunications equipment firm and ArrayComm’s IntelliCell smart antenna technology.

San Jose-based ArrayComm said IntelliCell-equipped base stations will help lower infrastructure costs because they would need fewer base stations to serve customers. Customers should also receive better service.

ArrayComm said base stations using IntelliCell will transmit wireless signals directly to individual phones in contrast with a traditional base station, which broadcasts signals widely in all directions.

“Because you’re transmitting to people and not broadcasting, communication is much more robust, so users will experience much more solid communications, no dropped calls and much higher data rates,” Martin Cooper, chairman and chief executive of ArrayComm, told Reuters.

Already, wireless service providers have spent a combined $45 billion in Britain and $33 billion in Germany for 3G, or third-generation, licenses. In the United States, carriers spent $16.86 billion on 422 wireless licenses.

“Anything that can help enable efficiency both cost-wise as well as spectral efficiencies is a good thing. Given what operators need to spend on 3G, this is going to become critical,” said Jane Zweig, vice president of wireless consulting firm Herschel Shosteck Associates.

The new base stations will be designed for the UMTS standard, one of the major standards for third-generation cellular communications.

As part of the agreement, Marconi will take an undisclosed equity stake in ArrayComm.

Cooper said Marconi would become a major shareholder.

ArrayComm, whose investors include Sony Corp. of America, said it was still considering an initial public offering of its stock this year, but the timing would depend on market conditions.