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CAG - Corporate Overview 1/1 (P)

Australian Associated Press

CAG - ASX Company Announcement
$tel4
26 April 2000
Part 1/1
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CAPE RANGE WIRELESS LIMITED
---------------------------
HOMEX - Perth
-------------------------
Corporate Overview
In late 1997, the Board of Directors of Cape Range Wireless Limited
committed the Company's total resources to the telecommunications
industry.
The Company's first telecommunications investment was the acquisition
of a controlling interest in bandwidth supplier, Paradox Digital Pty
Ltd. In January 1999 Cape Range Wireless provided the venture capital
to develop Internet Protocol Multiple Access (iPMA) technology, an
internet protocol suitable for delivery of high speed data and voice
by wireless over distances of 50 kilometres.
In February 2000, the Cape Range Wireless interest in iPMA was merged
with Silicon Valley based Arcadian Wireless Inc.
Following the merger, Cape Range Wireless became a 20% shareholder in
Arcadian, was appointed the exclusive representative for iPMA
products for Australia, New Zealand and Hawaii, and appointed a
non-exclusive joint venture partner in certain other regions.
While the Company has a number of telecommunications investments, the
future of Cape Range Wireless is linked to the worldwide acceptance
of Arcadian Wireless iPMA products. (A detailed description of iPMA
based applications follows this Company overview.)
THE COMPANY'S TELECOMMUNICATIONS INDUSTRY INVESTMENTS ARE:
* 20% holding in Arcadian Wireless Inc;
* active and exclusive distribution of Arcadian products in
Australia, New Zealand and Hawaii;
* active and exclusive distribution of Arcadian products in
Hawaii where the Company has formed a joint venture company through a
30% holding of Hawaii SATV Inc;
* a non exclusive joint venture with Arcadian to pursue major markets
for Arcadian Wireless iPMA products in other regions; and
* a controlling interest in Paradox Digital Pty Ltd, a distributor of
broadband in Australia.
Cape Range Wireless is in discussions that are likely to lead to
significantly higher ownership in Arcadian Wireless.
The SATV and Paradox investments remain well placed to contribute to
the Company's growth. These two investments provide excellent launch
sites for certain Arcadian products.
The success of the past year has resulted in Cape Range Wireless
being included in the ASX 300 Index. This inclusion and recognition
will assist us in achieving our goals in the year 2000 and beyond.
The role of highly skilled and specialised staff and consultants with
international experience will continue to play an increasing role in
achieving our goals.
In describing below the operations and future of each of these
investments, we would like to remind shareholders that this will at
best be a description that may change in a matter of weeks, given the
level of inquiry that our Company is now receiving from industry
players.
The technology of the iPMA based wireless is so strong that new
opportunities are being presented every week. We are sure that many
of these will lead to benefits to Cape Range Wireless and its
shareholders.
ARCADIAN AND IPMA - LEADING THE WORLD IN WIRELESS TECHNOLOGY
The Arcadian Wireless technology, incorporating iPMA, is a last mile
solution (wireless local loop) that enables greater efficiency in the
transmission of data between base and remote stations without the
drawbacks of systems based on conventional protocols.
iPMA maximises available bandwidth at substantially lower
implementation costs. Voice and high speed data can be transmitted
simultaneously over distances of 50 kilometres.
Following successful trialing in India during 1999, assembly of
commercial boxes is now being completed for testing in major
telecommunication networks. These tests are confidently expected to
lead to sales measured in the tens of millions of dollars.
The technology partnership developed between Arcadian and Texas
Instruments in April has greatly assisted Arcadian in the pursuit of
major world contracts.
The appointment of Arcadian as one of the few beta sites for Texas
Instruments' next generation of C6000 family of digital signal
processors (DSPs), the industry's highest performing DSPs, will
enable Arcadian access to the latest technology and engineering from
TI at an early stage.
This represents a significant competitive advantage and gives
recognition to Arcadian's worldwide leadership in wireless
technology.
COMMITMENT BY TEXAS INSTRUMENTS
At a press conference on 18 April 2000 announcing the partnership
between Arcadian and Texas Instruments, the Managing Director of
Texas Instruments, Singapore, Mr Larry Tan, stated:
"On behalf of Texas Instruments, we thank you for attending this very
exciting technology partnership event. We are indeed very pleased and
proud that Arcadian Wireless Inc. is incorporating our world fastest
DSP chip into its soon to be commercially available state-of-the-art
wireless local loop products.
In Arcadian's leading edge state-of-the-art wireless local loop
("WLL") system, two members of our C6000 family, the C6201 DSP and
C6211 DSP are used in the remote station and base station.
In these DSP devices, Texas Instruments delivers shear processing
horsepower of up to 1600 million instructions per second. This
enables Arcadian to meet a high data rate spec of up to 2Mbps while
optimising the design with fewer DSPs and, hence, reducing the cost
per channel.
More importantly, these devices are programmable. This means that
Arcadian can provide software upgrades to enhance system performance
without the need to design and install hardware changes.
The other DSP core is the C64X that will deliver the highest
performance DSPs in the world, with clock speed of up to 1.1
GigaHertz (GHz) and performance near 900 million instructions per
second MIPs). This delivers 10x the DSP performance of the current
industry leader, the TMS320C62X which is used in Arcadian's leading
edge wireless local loop products.
The C64, an extension of the C6000 family, builds on TI's C62X
already the top choice for wireless and broadband communications
infrastructure applications such as the base stations. We are indeed
very delighted that Arcadian has committed to develop future WLL
products with the entire TMS320C6000 series, including this new and
very exciting C64 based DSPs.
As our new C64X DSPs are software compatible with the present family
of C62X DSPs, the product and software engineers at Arcadian can
immediately take advantage of the new capabilities of C64X. This will
save years of time in developing new products.
Arcadian becoming a beta site for TI's new generation of C64X DSPs is
a major recognition of the high calibre design team Arcadian has
established in Malaysia.
By any measure, today's announcement marks a key milestone and is a
huge step forward for Arcadian Wireless Inc, Texas Instruments and
Malaysia".
Cape Range Wireless initially secured its 20% interest in Arcadian by
completing venture capital funding of US$1.5 million and the payment
of 15 million shares and options of Cape Range Wireless. The
Directors believe Cape Range Wireless to be a world class company
with a leading position in wireless technology, applicable for
connection to both the internet and to conventional telephone
exchanges.
iPMA is a last mile access solution to deliver high speed data and
VOiP using standard analogue telephones in an urban environment,
bypassing existing telco networks. It has even larger immediate
demand in developing countries where existing networks are sparse or
absent. The market for iPMA products is substantial. It is estimated
that there are approximately 3 billion people in the world who have
never used a telephone. Future economic growth and success of
developing countries will require widespread improvements and
availability of basic telecommunication infrastructure. In terms of
overall requirements for new lines in these markets, wireless access
will be the prominent technology.
In developing countries such as Malaysia, Indonesia, India and China,
with large rural populations, the up-front investment required to
offer wire line service is prohibitive. Low cost fixed wireless is
the solution.
In the urban and suburban areas of developing countries, potential
subscribers are often expected to remain on waiting lists for several
years before receiving a telephone. Fixed wireless offers instant
connectivity without the need to develop costly infrastructure.
The development of telecommunication networks continues to be driven
mainly by economic growth. At the same time, rapid expansion of
telecommunication networks works as a stimulus to improve the economy
and social conditions of a country.
In recognising the role played by telecommunications, Governments
have been quick to encourage and provide incentives for various
commercial ventures undertaking telecommunication projects,
especially in the area of rural access.
The average of a range of forecasts from top analysts predicts that
over 50 million wireless local loop lines will be installed by 2000
and that, by 2003 over half the fixed lines being installed in the
world will be wireless.
Arcadian believes that 20% of that market is an achievable goal given
the head start the Arcadian technology delivers.
The Arcadian product is competitively priced at approximately 50% of
other systems, which cannot match Arcadian's performance. Arcadian
has achieved this as a result of early access to advanced technology
including that provided by Texas Instruments.
New products already under development include the ability to
increase traffic speed from 2Mbps to 11Mbps over a distance of 20
kilometres.
Along with the obvious commercial benefits of the exclusive rights
for iPMA products for Australia, Now Zealand and Hawaii, the
non-exclusive joint venture with Arcadian for developing countries
allows Cape Range Wireless the opportunity to benefit both directly
and indirectly from growth in a substantial segment of the wireless
local loop market.
HIGHLY EXPERIENCED ARCADIAN EXECUTIVES AND BOARD
The establishment of Arcadian, which was announced in Kuala Lumpur in
February 2000, has provided Cape Range Wireless with access to
leading authorities in the telecommunications industry.
Mr Franc deWeeger is CEO of overall operations at Arcadian and
represents the company to the US business and investment community,
Mr deWeeger was the former CEO and President of Zilog Inc., and
former Managing Director for the Asia Pacific region in the
Semiconductor Products Group of Motorola Inc.
Cheam TatInn recently resigned as Managing Director of Compaq
Malaysia to serve as President of Arcadian.
Dr. Charles Sutcliffe, former CEO of Cisco Systems Inc., serves as
adviser to the Arcadian board.
Dr Ron Wise, Cape Range Wireless Chairman, is soon to be appointed to
the Board of Arcadian.
OTHER INVESTMENTS
PARADOX DIGITAL PTY LTD
Cape Range Wireless has maintained its investment in Paradox Digital
Pry Ltd. Paradox supplies bandwidth and related services to
approximately 100 ISP's in Australia. Turnover is growing at
100%-plus per annum. Paradox recently doubled the amount of bandwidth
available for sale to meet this growing demand.
Andersen Consulting has been retained to consider various
alternatives in recapitalising Paradox following receipt of a cash
offer for the company from a US Corporation.
SATELLITE HAWAII TV (SATV) INC
Cape Range Wireless has a 30% equity holding in Satellite Hawaii
(SATV) Inc which serves a potential market of 100,000 dwellings
(primarily multi-dwelling units such a condominiums), luxury hotels,
resorts and the Hawaiian Government.
In April 2000 the Echostar V satellite began to broadcast America's
top 70 TV channels plus 2 movie channels to Hawaii. This service is
expected to increase to 250 channels by the end of the year.
SATV has contracted approximately 120 residential connections and the
first multi-dwelling unit of a 22-floor condominium complex
containing 192 units has also been signed up for connection. This
building had previously been supplied with cable for over 20 years.
A further seven buildings in the vicinity of this installation,
representing over 2,000 units, will be approached on completion of
the first installation. Demand for the new service in Hawaii has
exceeded expectation.
These high rise condominium complexes are ideally suited for the
supply of Arcadian Wireless' iPMA technology together with the
integrated touch screen e-commerce and security system that is to be
provided by Safebouse Technologies Ltd.
Safehouse also owns 30% of SATV Hawaii Inc with the management owning
the remaining 40%. This investment is set to become a separately
listed public corporation later in the year. The total package
offered to customers of SATV Hawaii includes entertainment, security,
internet data and telephone services on a single network.
The ability to demonstrate an integrated service in Hawaii will
provide a stepping stone to expand the established direct to home
satellite installations and provide additional security and high
speed Internet services to customers on the USA mainland. The ability
to compete with existing cable installations augurs well for the
company.
CAPE RANGE WIRELESS FUTURE LINKED TO IPMA'S SUCCESS
The future for Cape Range Wireless will be determined by the success
of Arcadian to further develop iPMA products.
iPMA is suited to the world's growing economies. It is a unique
digital protocol which enables more efficient delivery of voice, data
and video to the internet via fixed wireless networks.
Fixed wireless networks involve point-to-multipoint transmission
using a base station and a series of fixed remote stations typically
being rooftop antennas.
THE WALL STREET JOURNAL HAS REPORTED:
"Its called fixed wireless and it has fast become a fixation of many
big communications companies. The service is attracting attention
because it allows companies angling to sell interactive video,
internet connections and phone services to reach potential customers
directly - rather than having to pay tolls to go through the regional
bells or to build their own expensive wired networks."
The New York Times has estimated that sales in the fixed wireless
industry in the United States will increase from US$1.3 million in
1998 to US$8.5 billion by 2007. Growth in the Asia Pacific region is
estimated to be double than that in the US.
CONCLUSION
As the demand for iPMA and wireless local loop products develops,
Cape Range Wireless will remain at the forefront of wireless
technology through the Arcadian investment.
Dr R Wise
CHAIRMAN
ends - AAP
-04 1634
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