News Release Details

Wi-LAN Restructures its Business to Prosper in Current Broadband Wireless Access Market

07/17/2001


Comprehensive Plan Reduces Spending While Maintaining Momentum in Key Areas 

Calgary, Canada
July 17, 2001

Wi-LAN Inc. (TSE:WIN), a global innovator of high-speed wireless data and Internet communications, today announced a restructuring plan which will improve the company's cash flow used in operations by approximately $1.5 million per month. This restructuring is in response to the slower than expected growth of the fixed wireless access market.

"We have three challenges: to live within our cash resources; to maintain the growth of our revenue and market share; and to maintain the market leadership of our broadband wireless access products and the potential of our W-OFDM technology," said Dr. Hatim Zaghloul, Chairman and CEO, Wi-LAN. "We believe that these changes will allow us to overcome these three challenges." 

The overall expenditure reduction includes reducing staff of 280 by approximately 30%. Other reductions encompass operating expenditures and a one-third reduction in overall cash compensation for executive officers. The immediate cash cost of this restructuring plan will be in the range of $1 million. 

"The bulk of our investment to date has positioned Wi-LAN as the leader in the fixed wireless access market," says Bill Hews, President, Wi-LAN. "Going forward, sales channel development, product completion and cost reduction will be based on solid market demand." 

Earlier this month Wi-LAN had increased its broadband wireless revenue guidance for the three months ended July 31, 2001 from between $6 million and $9 million, announced in May 2001, to between $7 million and $9 million, as unaudited broadband wireless sales totalled $5.2 million in May and June, the first two months of the third quarter. 

"Our broadband wireless sales in the first two months of this quarter almost equalled our broadband wireless sales in the previous quarter, allowing us to project continued quarter-over-quarter growth," said Peter Kinash, Chief Financial Officer, Wi-LAN. "This restructuring plan will allow us to significantly reduce our spending and accelerate our goal of being cash flow positive while continuing to improve our market position." 

Wi-LAN's market strategy is focussed on three areas. First, Wi-LAN is using its indirect sales channels in order to better approach distributors, system integrators, and value added resellers of broadband wireless access equipment who address product demand of enterprises and smaller service providers. Second, the company is focusing its direct sales force on service providers (CLECs, ILECs, ISPs) currently building broadband wireless access networks. And third, Wi-LAN is seeking out original equipment manufacturers (OEM's) and large scale service integrators in order to source leading broadband wireless opportunities which address large bids for bundled broadband wireless services. 

"We are currently demonstrating success on our sales and marketing plan, by building on our early successes in the indirect distribution channels, and specific vertical and enterprise markets," said Graham Smith, Chief Sales and Marketing Officer, Wi-LAN. "This approach is enabling us to focus on those opportunities, along with our direct sales opportunities which are pinpointed at generating larger revenue increments both in the short and medium term." 

Wi-LAN's wireless networking products have established the company as a leader in broadband wireless access networks where data communication is often limited due to cost or lack of traditional wired systems. Wi-LAN will now focus on delivering its innovative technology in licensed and license-exempt frequency bands for high-speed wireless networking products that are proving popular in large-scale networks in numerous developed and developing countries. 

"We are completing the development of our second generation W-OFDM-based BWS product line and our cost-reduced feature-enhanced AWE product line as planned," said Dr. Sayed-Amr El-Hamamsy, Chief Operating Officer, Wi-LAN. "Subsequently, our technology team will have fewer parallel product development projects, allowing us to focus on the products with the greatest immediate market demand that enhance our technology leadership."

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