A rare and cherished event - a press release from xG Technology, Inc. The company, inventor, sole guardian and careful custodian of the xG wireless data system, is pleased to announce that it has signed a deal for 1,000 base stations at the very pleasant price of $75,000 per pop - with an option for 4,000 more. If that gets exercised, xG is looking at $375 million. Initial deliveries are slated for the end of 2008, with 'the majority' of the 1,000 order due in 2009.
From thereon in, things get a little more difficult to unpick. The writer of the ubercheque is one Treco International S.A., which is owned by whoever it is who owns Casper Holdings, Ltd, a 4.4 percent shareholder in xG. You can, if you wish, go Googling for more details, and good luck to you - xG's director of communications, Chris Price, tells me that these are "private investment vehicles", and the emphasis seems to be on the private.
Do Treco/Casper have any experience in mobile networks? No comment. What will they/he do with a warehouse full of base stations and no handsets? Handsets are coming, says xG, with Cambridge Consulting having successfully tested prototypes a couple of weeks ago (yes, I missed that too), a couple of hundred due to be hand-built and the plan then being to hand off to a Chinese manufacturer at the end of the year. I'm very keen to find out how these get to market: the base stations, meanwhile, will be leased by Treco on a region-by-region basis to people who've bought those rights from xG.
$75k seems quite a plump figure for a base station, but with xG's claimed '$39.99/month' flat rate pricing plan for consumers and a bit of knowledge of depreciation, leasing ratios and the like, it may be possible for the first time to do some sensible sums on whether anyone (other than xG) will make any money at this lark.
That rather depends on whether the tech works, and if so how well.
With the roll-out due to start in the next three months, no public performance figures, no independent confirmation of xMax' capabilities, no deals announced with any regional carriers, ISPs or other entities prepared to offer a service, and a history of missed deadlines, failed contracts and ambiguous pronouncements, I think I can stand by my description of xG's approach to things as "idiosyncratic". This deal, which is as impenetrable as any, doesn't much shift my view.
However, you will be as delighted as I am that xG has promised to take me to lunch and answer any questions I may have. Those questions haven't changed much since 2005, but I look forward to asking them and reporting back.