R&D key for business with plan for rapid growth

Finding the fastest, cheapest and easiest-to-use broadband service can be seen as something of an obsession for both consumers and businesses nowadays. Sasha Williamson, CEO at London-based Urban WiMax, believes that, when it comes to businesses, the company he heads can provide a solution to meet those needs.

For those who don’t know, WiMax (Worldwide Interoperability for Microwave Access) is a wireless broadband technology that apparently offers increased service ranges, greater speeds of use and better levels of security for users than other forms of wireless broadband, such as the more commonly used WiFi.

In 2004, Williamson set up Urban WiMax to provide its service to businesses in central London, with a view to rolling out to other major cities across the UK. ‘We help to speed up processes to make businesses more efficient,’ he says.

After setting up the company, Williamson says one of the core elements in trying to get the business right was conducting robust market research. By way of example, he says that in 2004 the company put out four wireless networks to different markets to gauge reactions and learn from the feedback.

Williamson’s message to other businesses is to ‘do the R&D – understand the software, hardware, the regulation’. He adds: ‘It’s all in being prepared. We spent 2 years or more in getting the preparation right and the foundations in place.’

The plans for growth to build on these foundations are aggressive. Earlier this year, a forecast by private equity firm and lead financier for Urban WiMax, Charles Street Securities, estimated that subscribers to the wireless service should rise from 81 at year-end 2006 to 4,593 by year-end 2009. Over the same period, revenue is anticipated to rise from approximately £8,000 to just under £19 million.

Williamson is confident such growth can be achieved and even surpassed. However, what interests him now is ensuring the service is right for customers. He believes an opportunity is there to be seized upon as, he says, ‘small businesses have not been looked after’ by the larger telecommunications companies.

WiMax Serving SMEs

The core market for the company is made up of the 615,000 small- to medium-sized enterprises (SMEs) in the UK which are comprised of between 5 and 49 staff. The preference among the larger telecommunication companies like Bulldog, Cable & Wireless and Colt, he argues, has been to tap the consumer market, leaving many small businesses searching for other service providers.

When it comes to prices, Williamson says that Urban WiMax can, among other services, provide businesses with high-speed symmetric bandwidth – meaning that uploading occurs at the same speed as downloading – at a cost which is 30 to 70 per cent cheaper than comparable services.

He says the company can be this competitive because it knows its target market: ‘We are very focused. Unlike Colt or Bulldog, we don’t try to cover the whole of the UK.’

In addition to this, Williamson notes the maintenance costs are minimal which means that overheads, such as when a company sends out an engineer, do not figure in Urban WiMax’s outgoings. ‘We do things differently. We are proactive in monitoring problems – customers rarely have to call us,’ he says.

Around four months ago, Urban WiMax arranged for trials of its WiMax service in the London Borough of Westminster. Williamson says the feedback has been good, leading to 20 trial customers ranging from its core market to organisations like the BBC and the National Probation Service.

As for the company, it became a Plc at the beginning of the year and has a total of 19 staff, five of whom are part-time. Williamson notes the recent appointment of non-executive director Robert Hayim, a managing director with Charles Street Securities, and regulator and political advisor, Sir John Hannam, who was the Secretary of the Conservative 1922 Committee from 1987-97.

The company has agreed a three-round funding arrangement with lead financing of £16.95 million. The first round has already been completed, raising £2 million. The second round is expected to be completed shortly and should raise approximately £3 million.

As for how the company will develop over the coming year, Williamson expects it to be profitable by Spring or Summer 2007. If all goes to plan, he hopes the customer base should rise from 20 to well over 200.

Williamson comments that he doesn’t want to go over 50 permanent staff as the company evolves. He says: ‘It depends on how effective we are with how we deliver a service. We are a modular business, aligning infrastructure to demand.’

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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