M/A-Com Tunes in Run For State Radio Deals

By William Welsh, Staff WriterFollowing up on a surprising win in Pennsylvania last year, digital radio manufacturer M/A-Com Inc. now is aiming at nearly a dozen states that are considering buying public safety radio networks.M/A-Com of Lowell, Mass., in June 1999 defeated communications powerhouse Motorola Inc. to garner a $95 million contract to build a statewide public safety radio network for Pennsylvania that ultimately will link more than 20 different state agencies.With California, New York and a handful of other states also looking to build statewide networks that link the police and other public safety agencies, M/A-Com officials intend to use the Pennsylvania project as a showcase for its wireless voice and data communications technology."There is an insatiable demand for communications systems that can communicate with each other, and right now they don't exist for multiagencies," said Roy Hebert, director of business development for M/A-Com. "We are targeting those states that have expressed an interest in doing something similar to the project in Pennsylvania."M/A-Com is providing the state with its Open Sky Wireless IP Network, which uses Internet protocol to take advantage of the Internet's ability to move voice and data."We think of [Open Sky] not just as a radio network, but as a mobile information network," said John Vaughan, the company's vice president and general manager of wireless systems.M/A-Com's effort is one piece of the $222 million Pennsylvania Public Safety Radio Project. Other companies winning contracts as part of the project are Alcatel USA Inc., Rohn Industries and RCC Consultants Inc.Income from M/A-Com's multiyear contract should provide a decent chunk of the estimated $600 million revenue the company expects in fiscal 2000. The company, which also builds large commercial sector voice and data networks for companies such as Federal Express, is a division of telecommunications and electronics giant Tyco International Ltd. of Exeter, N.H. Tyco had 1999 revenue approaching $23 billion.While the Pennsylvania loss caught Motorola by surprise, the Chicago-based company remains the leading provider of radio communications hardware and services for state and local governments. Motorola, in fact, controls an estimated 85 percent of the market in wireless public safety communications systems, according to Greg Poldy, program manager with TRW Inc. of Cleveland.The company has played a major role as the equipment provider and systems engineer on public safety radio projects in 17 states, including a $187 million contract with Michigan, said Chuck Jackson, vice president of product development at Motorola.Losing in Pennsylvania was especially disappointing "because we felt like we had demonstrated time and time again that we have this expertise," said company spokeswoman Patricia Sturmon. "We don't like to lose any of these contracts."As Motorola and M/A-Com are squaring off on upcoming statewide competitions, other manufacturers of land mobile radios are looking to join in, either as partners or competitors. One of these is Waseca, Minn.-based E.F. Johnson, a unit of Transcrypt International Inc., of Lincoln, Neb. The parent company manufactures security products for voice communications while E.F. Johnson manufactures land mobile radios. Approximately $25 million of Transcrypt's $55 million 1999 annual revenue came from E.F. Johnson, according to Karen Vahouny, principal at Poretz Group, the company handling investor relations for Transcrypt."We've been in business for 76 years and are leaders in public safety and trunking systems," said Michael Jalbert, president and chief executive officer of Transcrypt. The company, which has licensed products from Motorola and M/A-Com, is open to teaming with any company in the public safety radio market, he said.While M/A-Com and Motorola fight for opportunities to help state governments build backbone systems, E.F. Johnson plans to focus on getting awards from small and medium-size government entities, Jalbert said.Another potential competitor is the recently formed ComNet-Ericsson Critical Radio Systems Inc. of Lynchburg, Va., which last month was awarded a contract for the Florida Statewide Radio Communications Project. Under this contract, ComNet-Ericsson will help build and operate a communications system for state agencies.The company was created in January when privately owned ComNet Inc. of Pittsburgh purchased Swedish-owned Ericsson's land mobile radio division. Before the sale, the division had annual revenue of $300 million in 1999, according to a ComNet spokesperson. The company provides a wide range of services that include manufacturing of mobile radios, installation of trunked dispatch radio systems, and construction of wireless antennae sites, and will be competing for various opportunities in the state and local government market.TRW is another familiar face in the public safety radio market and a frequent partner with Motorola on city and state radio projects. In the same way that Motorola dominates the radio side of the public safety business, TRW is a leading systems integrator for public safety. The company is especially active among cities and counties, with a list of customers that includes Austin, Texas, and Atlanta, Baltimore and Los Angeles. "Most of the major [police] departments in the country have mobile ata systems in place," said Poldy, TRW's program manager for 911 Los Angeles. "They are either used as secondary or, in some cases, as the primary dispatch tools."TRW also was the prime contractor for a multiagency public safety and communications network in Ohio. "We're looking at the next generation of integration beyond 911 [communications] to actually integrating public safety and transportation management," Poldy said. The need for intra-agency communications remains strong, as do the business prospects of those companies in the public safety radio network arena. A proven track record and name recognition can take a company far in this area, Poldy said. "The public safety community is tight knit and news travels fast that you can help them accomplish something that they couldn't accomplish on their own," he said.