NextWeb, SkyPipeline to Merge, Creating Nation's Largest Wireless Internet Service Provider
Combined Company to Provide Service to Country's Largest, Most Lucrative
Broadband Services Market
FREMONT, Calif. and CAMARILLO, Calif., Feb. 24 /PRNewswire-FirstCall/ -- California's broadband fixed wireless leaders NextWeb and SkyPipeline announced today that they have entered into a definitive agreement to merge, creating the largest Wireless Internet Service Provider (WISP) in the country. The deal, valued at more than $25 million, paves the way for businesses in California to benefit from nearly ubiquitous, cost-effective Internet service based on fixed wireless broadband technology. The combined company will operate under the NextWeb name. In 2003, the two companies pioneered the SkyWeb Alliance, a ground-breaking partnership that brought a cost-effective broadband alternative to a broad set of small- and medium-sized businesses currently accessing the Internet through cable and telephone service providers. With the merger of NextWeb and SkyPipeline, it is now possible for enterprise customers across California to get business-class broadband Internet service cost-effectively in a number of days rather than the typical weeks or months, with traditional carriers. "We are at the dawn of a whole new era in high-speed business Internet service," said Graham Barnes, CEO of Fremont-based NextWeb and the President and CEO of the combined company. "Our business model will leverage our larger network, based on licensed and unlicensed wireless equipment, to bypass the local telephone and cable company infrastructure, and bring high-speed, scalable Internet service to enterprise customers of all sizes throughout the State. NextWeb and SkyPipeline, more than any other WISPs in the country, have not only proven that this business is extremely viable, but that it also delivers a tremendous product and value advantage to the market. As a single company, we intend to strongly leverage that advantage to become the dominant player in the California business broadband service market, and beyond." NextWeb operates throughout key markets in Northern and Southern California, and SkyPipeline has a network covering the majority of Santa Barbara, Ventura and Los Angeles Counties. The combined service area will cover more than 2,700 square miles and reach hundreds of thousands of businesses in population centers that include nearly 25 million households. "When we started SkyPipeline three years ago, we knew that it was possible to use fixed broadband wireless technology to break the stranglehold that large service providers had on the business broadband market," said Ryan Blair, CEO of Camarillo-based SkyPipeline. "With this merger, NextWeb and SkyPipeline are demonstrating that this is not only possible, but that it is achievable on a significant scale. We are delighted to be joining NextWeb to create the largest, most powerful WISP in the country." Leading research firms forecast dramatic overall growth in the WISP market over the next few years, estimating that total US WISP revenues will reach nearly $2 billion by the year 2008. "The Yankee Group has been following this market for quite some time, and we believe that consolidating the WISP market is a great step for the industry," said Lindsay Schroth, Analyst, Broadband Access Technologies, The Yankee Group. "The focus on offering a flexible, lower-cost solution to business customers is a great strategy, and this merger should be closely watched by other WISPs. By creating a scaleable company with brand recognition and greater buying power, we believe that NextWeb is poised for success in the market." NextWeb and SkyPipeline's service offerings give business broadband customers unprecedented flexibility in their Internet service. Customers will get precisely the bandwidth they need and can scale it higher as their business needs change. As with current service from each company, the new NextWeb business-class broadband can be installed as quickly as the next day, as opposed to the weeks or months after signing up with traditional service providers. NextWeb installation and service requires no equipment purchases, and there are no local loop charges, hidden taxes or fees -- potentially saving enterprise customers hundreds or thousands of dollars each month on their Internet service. "The value proposition for wireless service is very clear," said Umrao Mayer, President of Kush Games, developer of the popular ESPN College Hoops and ESPN NHL Hockey video games. "We installed SkyPipeline service at our headquarters in Camarillo," Mayer added. "Once the service was up and running, we were blown away by the quality. We are a big bandwidth user, and we need our Internet service to work perfectly. SkyPipeline has delivered in both quality and service. Signing up with them has been a 'Slam Dunk' and I would recommend them to anyone that values the quality and speed of their Internet connection. We are very happy with our service, and are excited for SkyPipeline and NextWeb to be doing this deal." This is NextWeb's fourth merger or acquisition in the last 14 months, and both parties expect the deal to be completed rapidly. The two companies will integrate their operations on a "best practices" model, using the best business and operational techniques, and drawing on marketing and sales expertise from each company. About NextWeb NextWeb, Inc. is California's largest and fastest growing wireless Internet service provider, providing high-speed service to more than 1000 enterprise customers in Northern and Southern California. NextWeb's service is available in over 50,000 business locations in more than 60 cities. Typically installed in just three to seven days, NextWeb's service is 30 percent faster than a T1 at approximately half the cost, easily scaling to six times the speed of a T1. The company is generating positive earnings and is backed by leading venture and strategic investors including Monet Capital, Kaiser Permanente, Asset Management Company and Sunsino Venture Group. Additional company information is available at www.nextweb.net. About SkyPipeline SkyPipeline, Inc. is a leading Southern California provider of broadband services to business and high-end residential customers. SkyPipeline provides reliable and scalable wireless broadband service to more than 800 business customers using off-the-shelf equipment from leading suppliers such as Cisco Systems, Motorola, and others. The company's state-of-the-art, carrier-class network extends over a 220 mile backbone, and covers Santa Barbara, Ventura and Los Angeles counties, SkyPipeline has received funding from Chaos Ventures, Sage Venture Partners, The Cambria Group and Falcon Capital. To contact the company, call 866-SKY-PIPE (866-759-7473 toll-free), or visit the SkyPipeline website at: www.skypipeline.com.
SOURCE NextWeb, Inc.
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