Tuesday, August 30, 2005

IDT Spectrum (WinStar) heading back to the public

What's new? IDT Spectrum, the former WinStar, plans a new stock market offering. Parent IDT wants to raise $58m.

What's the relevance? IDT Spectrum holds potentially valuable licenses and has an extensive network, that took $5 bn to build. It could compete in the broadband wireless access (BWA) arena, assuming LMDS is a forerunner of WiMAX (as Iberbanda in Spain seems to imply, as it works with pre-WiMAX vendor Alvarion). IDT Spectrum could become a WiMAX pureplay.

The history: WinStar bought LMDS spectrum (I count at least $58m) to deploy an LMDS broadband wireless network and built a fiber backbone. Lucent supplied vendor financing (as it did to companies like XO (formerly NextLink), Teligent, etc.), In February 2000 WinStar attracted $900m financing from Microsoft, CSFB, Cascade Investments and Welsh Carson et al.
The market proved not ready for LMDS deployments: the technology wasn't ready, there was no standard-based interoperability, there was a shortage of devices and equipment and demand simply never took off. WinStar entered Chapter 11 in april of 2001 and was auctioned off to IDT in December 2001 for $40m.

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