FGWI Connecting Without Wires

WEDNESDAY, MARCH 22, 2006 08:23 PM

Today's Page One feature in the Knobias, Inc. (otcbb: KNBS) Small-cap ClipReport highlights 5G Wireless Communications Inc (OTCBB: FGWI).

Wireless internet is slowly but surely finding its way into homes, businesses, and universities across America. The ability to check email or surf the web without being attached to a wall outlet has many people making simple decisions as to where to eat, or where to live based on the availability of wireless.

Large cities such as New Orleans, Philadelphia, and now Austin have plans in place or are currently offering city wide hot spots. These forward thinkers are starting a trend which has many smaller cities following in their footsteps. Smaller, quaint cities that were normally set in their ways are deciding to offer the city wide access for a variety of reasons: business opportunities, positive publicity, incentives for new residents, cheap per user rate, and a higher quality of life for all.

These cities incorporate a large market in the area of wireless antennas. But a different niche that has historically been more progressive in thought is the colleges and universities. The market has been estimated as a $720 million dollar segment over the next five years according to Educause.

One company that attempts to service this market is 5G Wireless Communications Inc (FGWI). The company manufactures and distributes wireless technology which enables wireless LANs and WANs to expand their networks. The Company’s engineered antennas, packet switching management, and network security scheme combines wireless technology from the radio and data networking fields. The Company’s technology enables "campus" entities to create large and efficient wireless networks. They aim to dominate the base station portion of the infrastructure market.

The company operates with the competitive advantage they have a proven cellular architecture model which requires less hardware and less maintenance compared to Cisco’s Dense Access Point which is expensive, requires too much hardware, and is impractical to install and manage. FGWI’s product is also superior to mesh networks which are susceptible to degradation with each new node causing severely limited scalability.

The company currently serves many universities including UC Irvine, UCLA, Tiffin University, Monmouth, DeVry, California State Long Beach and others. Municipalities served include Rockford, Illinois; New Smyrna Beach, California; Pleasanton, California and others.

But the company now has its sights set on the international market. FGWI recently announced an agreement with United Arab Emirates (UAE) Corporation, DigitalSkys LLC, a provider of next generation global telecommunications. DigitalSkys will be showcasing the 5G Wireless broadband solutions and products at the 12th Annual CABSAT Middle East convention in Dubai, which presents the latest developments in the Electronic Media and Communications industry from more than 400 companies in 50 countries. The company has also gained traction in Pakistan, Nigeria, Malaysia, India and others.

With a solid product, a growing market, international traction, and a real competitive advantage, one would think that this company would have a larger market capitalization of only $2.3M. In its latest earnings release, the company reported revenue of only $250K with a loss of $50K for the period. Noted CEO, Jerry Dix on what’s holding the company back, "A quality infusion of capital would be very beneficial. Expansion of our sales team and a continued focus of marketing would be huge catalysts."

In any event, this name is certainly one to watch. The market for base station infrastructure will only increase as the economic feasibility for larger cities becomes more apparent. With a competitive advantage over the bigger players, the company is also an attractive acquisition candidate. With an infusion of capital and an expansion of the sales team, this company could definitely wave that $2.3M market capitalization goodbye.