Proxim May Benefit From Wireless Backhaul Growth

Wireless backhaul is one of the fastest-growing areas of the tech space as it seems almost no matter how poor the global economy does, consumers and businesses need more broadband on the go. And as the devices get more powerful and do more like download podcasts and watch videos, existing wireless infrastructure just can’t keep up and as a result base stations need to be added and reinforced with more connectivity. It is difficult to predict anything slowing this trend down for at least five years.

One company playing in the space is Proxim Wireless and they recently debuted a 4G backhaul product line consisting of the Tsunami QB-8100 point-to-point and the Tsunami MP-8100 point-to-multipoint – solutions with throughput of up to 600Mbps.

I spent some time at the Proxim Wireless office in Milpitas, CA where I met with Robb Henshaw the Director of Marketing & Communications. We talked for a bit about how the company was focusing resources on municipal WiFi in past years and eventually found this market did not have the opportunity they believed.

Proxim’s current focus is on ensuring more bandwidth over more distance and Robb commented that the iPhone shows carriers that that they were unprepared for the onslaught of wireless traffic which continues to come.

Other interesting points had to do with the significant quantity of signed deals which Henshaw said evaporated from the market due to financing challenges among carriers. He says the financing market is coming back slowly and so is broadband stimulus funding. He thinks September is when we can expect more of it to hit.

The backhaul market was already on a solid trajectory before broadband stimulus funds were to be rolled out. It seems apparent that vendors in this space are in a pretty solid position as the US government and demand for consumer electronics drives the need for ever-increasing broadband capacity.

The challenge for Proxim is the company’s market cap is low at under $3 million which means they have little margin for error. But they are entering a rapidly growing space which could become a cash-cow rather quickly. Although a speculative investment, Proxim could be a play on broadband stimulus funds and the need for ever-faster data pipes at cell towers. A lot of this company’s future success depends on execution which is difficult to predict. What is known is that the tide is rising and Proxim’s boat could rise as a result.

For more information on the 4G and wireless backhaul market be sure to be at the 4GWE — 4G Wireless Evolution show September 1-3, 2009 in Los Angeles

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