Wilson Electronics Buys Cell-Signal Booster Rival zBoost as booster certifications roll in
By Phil Goldstein | March 5, 2014
Wilson Electronics bought smaller rival zBoost, consolidating the niche market for cell-signal boosters. The deal comes as the FCC is certifying new boosters from Wilson and its competitors under stricter rules for the devices.
Wilson bought zBoost in January but did not publicly disclose the deal until now. Wilson, with $50 million in revenue, is aiming to use the deal, as well as the FCC’s new certifications, to expand its business this year both at home and abroad.
In an interview with FierceWireless, Wilson CEO Bob Van Buskirk said the deal made financial sense and was an opportunity to consolidate an industry that he thinks is bound to grow in the years ahead. He also said that zBoost had a retail presence in some channels that Wilson was not strong in, and the deal will allow Wilson to pursue a dual-brand strategy.
“We do have retail partners who have directly told us, that for [them] to invest in flagship products, we need to have two brands,” Van Buskirk said. “Retailers also like to have a better-best” strategy for products, he said.
Wilson-branded products will be positioned as the premium brand, while zBoost will be the value brand. Both companies use Amazon.com heavily and Van Buskirk said that the dual-brand strategy could also be expanded to big-box retailers like Best Buy. He said Wilson is exploring opportunities at Staples, Fry’s Electronics and The Source in Canada.
Van Buskirk said the FCC’s new rules will open the market for boosters. He said Wilson expects that 80 percent of its fiscal 2014 revenue will come from products certified under the new rules.
In February 2013 the FCC approved new rules for cell phone boosters, giving booster makers a major win after years of acrimonious debate over the issue. In the past, the CTIA and wireless carriers have tried to ban the sale or use of cell phone boosters, arguing the devices can cause substantial interference in their networks and result in dropped calls and blocked calls, including 911 calls. In addition, operators maintained that finding and fixing interference caused by these boosters is extremely difficult. But the FCC managed to get the nation’s wireless carriers to agree to the new rules.
However, the 2 million wireless customers with existing boosters who had been using the devices to improve their mobile signals were required to register with and get permission from their carriers to continue to use the gadgets.
In its order, the FCC created new, stringent technical rules for how booster makers need to manufacture the devices. Boosters amplify signals between wireless devices and wireless networks. Under the agency’s new regime, boosters for consumers must adhere to what the FCC is calling its Network Protection Standard, which most carriers agreed to.
On Feb. 11, the FCC extended until April 30 the deadline by which all consumer signal boosters marketed, distributed or sold in the United States must comply with the FCC’s new technical standards. The deadline had been March 1.
Wilson said last week that its most popular in-vehicle boosters are now certified by the FCC for the new standards, and that shipments of both the Mobile 3G and the Sleek will begin shortly and be available at retail. Van Buskirk said Wilson has six product platforms now certified under the new rules but that the company still has a few more products it aims get approved ahead of the new deadline.
Other competitors are not standing still. Earlier this week Nextivity announced that FCC certified its Cel-Fi Smart Signal booster for T-Mobile US (NYSE:TMUS) subscribers, and an AT&T Mobility (NYSE:T) version is in the works. SureCall, formerly Cellphone-Mate, said the FCC certified its first product under the new rules, the Flex2Go cellular booster kit for vehicles.
Van Buskirk said SureCall is one of Wilson’s main competitors. Wilson does not compete with the likes of CommScope and Powerwave Technologies in industrial boosters, which have different use cases and technical requirements.
Van Buskirk said Wilson will look to target Asia as a major international growth opportunity this year, but he declined to give further details.
Van Buskirk said right now there is “tremendous opportunity” for the booster market, but that awareness of signal boosters as a solution for coverage and signal problems “is in the low single digits.” The zBoost acquisition will be part of Wilson’s push to raise awareness in the market and tell consumers “we’ve got a cure for their disease.” Unfortunately, he said, “many of them don’t even know there’s a cure.”
Source Article: FierceWireless.com