Window of opportunity has opened up for Polish startup IS-Wireless, which was nominated for DigitalEurope's Future Unicorn Award 2021, having won several other awards in Europe with its innovative 5G mobile communications technologies. They have joined the Garage+ accelerator of the Epoch Foundation in Taiwan, hoping to find hardware partners from Taiwan to deliver their new model of 5G communications at lower cost and better performance.
IS-Wireless CEO Slawomir Pietrzyk recently talked to Digitimes about his visions.
Q: Could you give a brief introduction to your core team and the company's value proposition?
A: I received my PhD in wireless communications at Delft University of Technology in the Netherlands, and two of our colleagues did their PhD studies at National Chiao Tung University in Hsiunchu. The team consists of 50 highly skilled telecom professionals who have experience in building telecommunication networks, starting from 2G and 3G trough 4G and now 5G. We have also a research part of the company which is already focused on 6G. We are a company providing mobile networks of the future. We try to challenge the status quo, which is dominated by the big providers, such as Nokia, Ericsson, Huawei, etc. We are building the gears, including hardware and software for rollouts of the networks. This technology domain is getting to a point of saturation, as the big players each are trying to cover the whole value chain. This situation is called "vendor lock-in," very similar to the computer industry 30 years ago, where single vendors sold software and peripherals products incompatible with other companies. The same thing is happening in the mobile industry and reaching the point of saturation would mean the end of possibilities in this industry.
In order to release creativity and move forward, and help lower the prices at the same time, we need to do the same thing which happened 30 years ago in the computer industry, which also involved Taiwanese companies, which is modulization of PCs. Instead of using those incompatible computers, people standardized computer hardware 30 years ago, which allowed consumers to insert cards in computers made by many different suppliers, provided they complied with those standards. The software was totally different. You could install whatever operating system, and on top of that you can build different applications. Each of those elements came from independent suppliers, because the value chain was open. This is happening in the mobile industry. We are one of the few players in the world that is following this trend.
We focus on the radio access part, which is the most technologically demanding. Our value is in functionality definition and in implementation of software responsible for those functionality. Taiwanese firms are great in developing hardware, so we look forward to establishing relations with companies which develop computing hardware, such as servers, and the remote radio heads.
Q: In the Garage+ brochure, you pointed out that IS-Wireless is participating in the Open-RAN revolution and expects significant changes in how networks are built and deployed in the future. Can you elaborate that vision?
A: The things that I have been describing so far was more on the side of the providers, the functionalities and the network gears. They are installed in the mobile networks of telecom service operators, such as Orange, Verizon, etc. Traditionally, mobile service operators tend, so far, to cover all the value chain. From building the networks, running the networks, offering services, etc. But it is a very silo-based thinking, which definitely will have to change.
Let me give you an example. Building and running the sites is the least welcoming business of the network operators. Site acquisition, network maintenance, are all costly. Right now companies tend to sell those part of business to external partners. What I believe is that in the near future, especially the locations where the network gear, the base stations, and especially the radio units will have to be co-located with other type of infrastructure. Lamp posts is one example, but there are much more. We will face a massive distribution of those radio units, tiny base stations, in order to cover small area to densify the network. You need small and low-power units, like WiFi kind of access points. They can even be installed before being used by the same token as the Ethernet cables in the offices. This is the only way to provide significant capacity improvement.
The change of gravity is huge. It normally takes 15 months for European telecom operators to build huge sites, which includes acquiring site, and actual build-up of the base station. That is like the stone age for providing the services. Now with our solution, if the operator has already acquired the tiny radio gears, and the owner of kiosks or the city municipality permits the use of lamp posts and bus stops, then those non-telecom infrastructures will serve as access points of the radio gears. The time required for installation can be significantly shorten with this new business model.
The single unit of the radio gears is cheap, but you need to produce a huge number of them, in order to get the optimal network performance.
Q: It is a brilliant idea for smart city models. Are you already in talks with cities or governments in Europe for this deployment?
A: We are at the stage of getting it out of the labs. We have demonstrated the operability of our solution in the labs, and right now we are conducting proof-of-concept trials, including small-site rollouts. This is the step before commercial roll-outs in the cities. Smart city application is only one of the applications. We are also targeting industrial applications and we plan to have rollouts to address the needs for operators providing private networks, which are favored by many companies. This is especially visible in Germany, which auctioned 5G bandwidth for private operators. In addition to auctioning large chunks of bandwidth for the whole country, they allowed localizing licensing of bandwidth per square kilometer, at the price of about single thousand euros, not millions of euros as country-wide auction options. You can imagine how many more business cases can carry such affordable costs. It is seeing explosive demand in Germany and we hope to see similar situation in Poland, which is scheduled to auction frequencies for 5G in 2021. Taiwan also had a private 5G bandwidth auction, a trend we have been very much interested in.
Q: Security is a key issue for 5G, not only the geopolitical issues raised by the US in the case of Huawei. In the age of Internet of Things (IoT), networks are vulnerable to hacking. Do you have any solution for protecting security?
A: Certainly. Security is at the heart of our solution; we put great emphasis to this. At the geopolitical level, we are building our infrastructure locally. For this part of the world which is in collaboration with NATO and the US, we can be the supplier that is accountable not just for our homeland deployment, but also for the whole European Union, and/or allies of NATO and the US.
At the system level, our system is developed with the open model, all the interfaces can be checked by the community. You have much more people to challenge this, compared to the single, silo-based block model of the traditional vendors. Everything is hidden in the traditional model, and the customers over-pay for security which they have no idea what kind of protection they are getting.
Our system also has superiority in flexibility. For that open system, which also is equipped up-to-date security counter-measures for threats, you can use the open-system counter-measures tailored for the risks you are facing, because you can take it as a module from an independent security provider. This is very important, you can have the functionality of one vendor, while the security of that vendor can be locally verified in any country.
And we also put a lot of emphasis on certification of security. We have just initiated a project with the Polish National Telecommunications Institute, on safeguarding security between the network security functions and aligned computing resources. This is because we allow our software to run on dedicated hardware, such as servers, and shared resources, such as Amazon, Google or Microsoft Azure. That poses different kind of challenges, but we are addressing them as well.
Q: Are you seeing competitors which are also startups that are offering similar solutions?
A: There are three or four such companies globally. They are already engaged and working for rollouts. They are also providing solutions with the open radio-networking philosophy. They are on wave one, but we are considered as wave two. We believe we have better technology. In most of their cases, the software they offer is decoupled from hardware. Our software is not only decoupled but partitionable from the very beginning. Another difference is they typically start from the upgrade of 4G implementation, while we started from 5G at the very beginning. We are confident to say, after the rollout, we will deliver deployments at a much better level of quality and flexibility.
Besides, the competitors are pushing for large-sites with customers who focus on their current needs. I would say that is a technological trap, because the large-site rollout that they focus on will soon get saturated.
Q: What is your business model? Do you license IP? How do you generate revenues?
A: Very good questions. We want to address two types of customers. One is technologically savvy operators, which understand the technology and can control the whole value chain themselves. Rakuten Mobile of Japan is a good example of such kind of customer. For this kind of customer, we are willing to simply license our software and make sure it matches the hardware it controls. The second group of customers are more likely to get the low-hanging fruits faster. They are not that technologically savvy because they are from different industries. Let's imagine we are working with a railway company or with an airport. They are not telecom companies, but they have the potential of either running their private networks or deploy networks that they would rent or license to someone else. With that, we will provide total solution, including both software and hardware. We will not be producing hardware but would like to work as a partner with hardware manufacturers to offer total solution. We also provide installation and integration service to whatever is needed.
Very often we can think of running system integration with non-telecom companies such as Amazon who have access to customers. We can also work as a supplier of the network gears to provide network functionality and able to install the elements needed for localization.
Q: IS-Wireless is also preparing for the emergence of 6G technology? Will your 5G technology be obsolete when 6G takes over?
A: No, it won't happen that way. I am old enough to observe 2G, 3G, 4G and 5G, with 3G and 4G the center of my professional career. We expect that 6G will be a continuation of 5G concepts. The 5G services currently provided by large operators is not too different from 4G, regarding the technical concept. The novelty of 5G is the possibility of opening up the value chains. You can have the elements of the wireless gears, decoupled from the software. In the past, they are inseparable. 5G brings slicing of services. What will 6G be? It will be an evolution. The leapfrogging technology we are working on right now is exactly a 6G strategy. We are very confident that the future lies with the trend of software decoupling from hardware, and a bottom-up approach of building massive numbers of low-power sites versus the top-down approach of traditional 3G/4G rollouts. That is because you would not have the luxury of building a totally new network, and the limit of the wave length requires density of the network. In the future, 6G gears will have to be co-located with other infrastructures, and you need to share those bandwidths with multiple users.
Q: Is the purpose of IS-Wireless to join the community of Garage+ accelerator to get access to potential manufacturing partners in Taiwan?
A: That is one of the reasons, but there are more. The first thing is to find partners with hardware manufacturing capabilities. We already have some relationships that we would like to deepen, in the direction of computing and radio units. During my visit in 2019, I learned that there are interests from Taiwanese companies to invest in technological startups. If we can establish a collaboration with Taiwanese companies which are strong in hardware manufacturing, it would be complementary and would benefit both sides, because our strength is in software. And Taiwan is also the perfect place to propagate to the entire region of Asia. We also share similar values. Poles and Taiwanese are both good at abstract thinking and creative way of solving problems. I believe we are better than our western European colleagues as a partner for Taiwanese companies.
Q: Do you have any expansion plan or fund-raising plan this year or next?
A: We are now a company of around 50 people, which is like a teenager in the life of a human being. We are growing rapidly and learning rapidly. To build a team to support the early rollouts and trials that I mentioned earlier, maintaining customer relationships, and finishing technical work for optimizing, adding or improving our product, we are looking for investments of around US$10 million this year as a bridge-financing to get us to the point of implementing larger rollouts.
Right now we are looking for early adopters who are customers that are willing to work with us, a very agile and fast-responding company. In their domain, we can be a very strong differentiator.
IS-Wireless CEO Slawomir Pietrzyk