FRIDAY INTERVIEW:Mike Fitzgerald, Altobridge chief executive
FOR A company that specialises in connecting people in some of the most remote parts of the world, it comes as a surprise that the inspiration behind Kerry firm Altobridge emerged in California.
Engineer Mike FitzGerald was transferred from China to run Ericsson’s business there in the 1990s, focused primarily on Pacific Bell Wireless. “Having arrived in California assuming they wouldn’t have the same challenges, the first problem I found was that places like Lake Tahoe and the valleys couldn’t get proper cellular coverage, or proper transmission,” he recalls.
A fix was found but, even at the time, it was seen as little more than “the best of a bad lot”.
FitzGerald and the then chief technology officer of Pac Bell saw a gap in the market and decided to pursue it. A first venture – Microcellular Systems, based in Tralee – was essentially a technology reseller, FitzGerald says, but it was good at it and confirmed a market to target.
When the company was sold on at a tidy profit to Nasdaq-listed Interwave, FitzGerald turned to a more ambitious approach. There were countless small villages and groups in places as far flung as Africa, Latin America, southeast Asia and even the Antarctic simply not accessible with more traditional networks.
Tapping a generation of Irish engineers, many of them emigrants who had made careers for themselves in the telecoms sector, FitzGerald and two partners – Guy Waugh and Bart Kane – focused on developing their own solutions. Altobridge was founded in 2002.
The technology they developed is complicated, although it sounds simple enough – using satellites to connect callers with mobile networks on the ground.
Despite the company’s focus on remote communities, it was the altogether more sophisticated world of airlines in which the company first made its name. A decade ago, finding a means of making mobile phone calls inflight was the subject of great interest.
A wireless mobile industry player reviewing their feasibility study for remote area access tipped them to the wider applications of the approach. Immediately, Altobridge saw the opportunities. “We thought that if we designed the technology to accommodate that particular vertical, it would be the same software for all markets and plus we would make money earlier [in the development cycle than planned].”
Having a background in marketing as well as engineering, FitzGerald knew also that such a move would provide priceless brand recognition. The Gulf airline Emirates now uses the technology across its fleet and Altobridge is also involved in merchant marine communications through a related company, Blue Ocean Wireless.
But finding low-cost, efficient communications links for remote areas remains the focus and FitzGerald sees the decision this week of venture capital funds tied to tech giant Intel and the World Bank to invest significantly in the firm as a major boost in that endeavour.
“We have our growth market, which is remote, and we are 100 per cent focused on that. We are landing the deals we said we would get to and we want to drive that forward,” he says.
Most recently, the company landed a major contract with the second-largest mobile operator in Indonesia despite intense competition from nine rivals, some of them the largest players in the global telecoms sector.
FitzGerald concedes there is now intense competition in the sector. Altobridge’s success, he says, comes from the efficiency of its system and its ability to keep maintenance costs low.
“Other companies might be able to sell a cheaper box [base station] but within a few months we start to be superior to them. It’s about operational efficiency. As long as we can maintain a lead in that, we won’t be vulnerable to the low-cost box.”
The arrival of Intel Capital and the World Bank’s International Finance Corporation gives Altobridge the financial muscle to compete, but that doesn’t mean it intends to embark on a rapid expansion. “With the cloud of uncertainty that surrounds the globe at the moment, we choose to focus on the existing customer base right now. There’s enough from that base to deliver the next three years of growth.”
There is one area, however, that excites both the company and its backers. With University College Cork, Altobridge has spent the past 18 months investigating approaches to easing data congestion on wireless networks. In its remote sites, the initiative continues its focus on increased efficiency. But there are wider applications.
“Operators the world over have a problem. Increased data traffic means they have to keep throwing transmission cost behind running their network at the very time when average revenue per user is dropping. The challenge for them is to get somebody in to tidy up from an efficiency perspective and we’re saying ‘yes, that’s our space’.”
This summer, FitzGerald’s team will take the first working prototype to an operator in southeast Asia. “We are going to demonstrate just over 50 per cent reduction in data bandwidth that’s being taken across this particular remote network and then focus on the commercialisation of that.”
Back in Cork, research and development to deliver the application to a broader market, including urban areas in the developed world, continue. While coy on the financial performance of the business, FitzGerald says the company was satisfied with turnover in 2010 and very confident that its growth projections for this year will also be met.
FitzGerald says the UCC research shows the importance of venture funding for innovative business. He points to Enterprise Ireland, a consistent backer of the company from the outset, and says that without that support, Altobridge might not have undertaken the cost involved in the UCC research that now looks set to deliver a quantum leap for the business.
He is also grateful for the belief of other successful Irish entrepreneurs such as Tony Ryan, Gerard Power, Dómhnal Slattery and Declan Hogan, who have taken and held on to investments in the business.
Having found the funds, one of the FitzGerald’s next challenges is finding the talent to successfully commercialise the research.
“We have never had a problem filling jobs until now but right now, it is an issue. People didn’t realise it but the backlash from the dotcom crash discouraged people from doing computer science and engineering [courses] to a certain extent and what we have found is that there is a bit of a vacuum.”
With a lot of companies chasing limited talent, FitzGerald anticipates the security of having backers of the calibre of Intel and IFC will make Altobridge a more attractive proposition.
“I hope it will attract a couple of key people. Certainly, if there are people out there with data optimisation and telecoms experience, we could really do with them.”
Having seen three brothers emigrate in the 1980s, FitzGerald says the thing that bothers him most in the current climate is watching the return of forced emigration.
Minister for Enterprise Richard Bruton was on hand this week to announce the latest investment. FitzGerald recognises the tight situation in which the Government finds itself.
“They only have pennies [to invest] but it looks like they are doing the best they possibly can with those pennies.”
It’s up to the venture capital community to build on those funds, he argues.
“What you would have to say is take that chance, make that punt; the more punts you make, the better chance we [entrepreneurs] have of getting traction. Not everyone is going to succeed. Success and failure and neighbours but we have to take that risk.”
On the record
Name: Mike FitzGerald
Age: 43
Position: Chief executive of Altobridge
Family: Married with two young boys.
Interests: Being at my sons' beck and call when at home.
Why he is in the news:Altobridge has just received a major injection of funds from venture capital funds linked to Intel and the World Bank.
Something you might expect: With most of the company's business tied to remote parts of developing countries, he spends a considerable amount of his time travelling.
Something that might surprise: Despite his Kerry roots and that of his company, he was actually born in the Bronx.
