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
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.
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.
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.