Geotek Communications Inc.
Geotek Communications Inc.
Sales: $92.8 million (1996)
Stock Exchanges: NASDAQ
SICs: 4812 Radiotelephone Communications; 3663 Radio and Television Broadcasting and Communications Equipment; 6719 Offices of Holding Companies, Not Elsewhere Classified
Geotek Communications Inc. is the largest holder of 900MHz specialized mobile radio licenses in the United States. The company is an international wireless communications company focused on mobile business solutions for small and medium-sized companies. Geotek pioneered an integrated offering of secure voice and packet data services which operate on a single platform, the company’s FHMA® system. In addition, through its equipment operation, Geotek develops, manufactures, and markets mobile radio network equipment and services based on its spectrally and cost-effective FHMA technology.
Services and Products
Geotek operates two different business sections: wireless communications and communications products. Essentially, the company provides mobile radio services to commercial customers in the United States, the United Kingdom, and Germany and designs, manufactures, and also distributes electronic communications equipment for commercial customers under contractual arrangements.
The wireless communications group is engaged in the commercial rollout and enhancement of its digital wireless network in the United States, principally through its PowerSpectrum Inc. (PSI) and Geotek Technologies Israel (GTI) subsidiaries, sale of digital wireless infrastructure equipment, provision of mobile radio services in the United States via PSI and MetroNet, the United Kingdom via National Band Three Ltd. (NB3) and Germany, and the development of certain mobile data applications via GMSI Inc. and Mobile Information Systems Ltd. (MIS). The enhancement of the company’s digital wireless network is taking place primarily in Israel. GMSI is located in Canada and markets its products in Canada, the United States, and the United Kingdom.
The communications products group is primarily engaged, through the company’s Bogen Communications International (BCI) subsidiary, in the development, manufacturing, and marketing of telephone and facsimile (fax) peripheral products and commercial audio and paging equipment in the United States and Germany.
Some of Geotek’s wide range of products include: Automatic Vehicle Location, a highly sophisticated tracking tool using detailed electronic maps and Global Positioning Satellite technology to enable fleet managers to instantly and accurately plot the locations of fleet vehicles from PC Dispatch Station; Mobile Messaging, which delivers a powerful and advanced two-way messaging program that allows the dispatcher to compose and send two-way text messages of up to 500 characters in length directly to the mobile worker; Voice Messenger, which enables users to communicate instantly with vehicles, receive incoming dispatches and information, and track all communications through desktop personal computers or laptop computers; Mobile Manifest, a management system for organizing daily work tasks, providing small and medium-sized businesses with the benefits of efficient mobile work-flow management; Group Dispatch, a traditional two-way communication voice dispatch service which allows dispatchers to communicate with a specific group of vehicles or with the entire fleet; and Mobile Telephony, a standard cellular-like telephone service which offers speed dialing, last number redial and dual tone, multifrequency capabilities during active telephone calls.
Since 1992, the company has devoted and expects to continue devoting substantial financial and management resources to the development and deployment of a low-cost, high-quality integrated digital voice and data wireless communications network in the United States. The company, through its subsidiaries and joint ventures, intends to deploy similar networks throughout the world.
Growth in the 1990s
The company had a huge growth spurt in 1993 and has never looked back. Geotek acquired 25 percent interest in Cumulous Communications Company in August of that year for $1.5 million and invested another $2.4 million in the provider of SMR services in California’s San Joaquim Valley.
In 1994, the company entered into a 50/50 partnership with Decision Systems Israel Ltd. (DSI) to create Mobile Information Systems Ltd., a software development subsidiary. It also contracted with Mitsubishi Consumer Electronics of America to manufacture commercial subscriber terminals and units for the company. In the same year, the chief scientist of the Israeli Ministry of Industry and Commerce agreed to fund certain eligible expenditures relating to the development of the digital wireless communications system by GTI, receiving $4.1 million, $5.9 million, and $300,000 in 1994, 1995, and 1996, respectively.
In a minor blemish on a good 1994, Geotek filed a lawsuit against Harris Adacom Corporation B.V., a Dutch corporation, in order to recoup the $3.5 million loan made to Harris earlier in the year. Harris declared bankruptcy and filed a countersuit against Geotek in Israel, claiming Geotek had agreed to purchase a significant interest in certain wireless communications business assets owned by Adacom Technologies Ltd., an affiliate of Harris, and had subsequently breached the contract. Two years later, the companies were still warring in the courts, having reached no settlement.
In March 1995, Geotek formed a strategic partnership with Hughes Network Systems Inc. to develop a portable subscriber unit., sharing equally the costs of development. August of the same year saw Geotek transferring its interest in Speech Designs GmbH and Bogen Communications Inc. to Bogen Communications International, formerly European Gateway Acquisition Corporation, in exchange for approximately $10 million and 64 percent of BCI’s common shares. Late in the year, the company also traded all of its MetroNet 800MHz radio channels for 900MHz radio channels in seven major U.S. markets that were previously held by competitor Nextel Communications Inc. Geotek also phased out the Office Automation Services product line from its BCI products group.
1996 as a Watershed Year
The following year, 1996, was one of growth for Geotek. Company founder Yaron Eitan as chairman of the board, replacing Winston Churchill (no relation), and Stephen Crane was named president & CEO, and Geotek was off and running. Early in the year, the company paid $800,000 for shares held by a minority stockholder in the company’s subsidiary, GTI. April saw Geotek purchasing MacDermott Communications Inc., a private company with an SMR license, for $2 million in stock. In July, the company bought out the remaining 50 percent of MIS from DSI for $2 million and purchased 181 10-channel blocks of 900MHz Spectrum in 42 regional service areas (called “Major Trading Areas”) for $30.9 million and another $11.7 million of 900MHz blocks throughout the United States. And in November of the same year, the company entered into a partnership agreement with RWE Telliance A.G. to merge each company’s respective German mobile radio networks upon the approval of the appropriate regulatory authority in Germany. Under the terms of the agreement, both the company and RWE will own 50 percent of the merged entity. Geotek’s investment was $23 million. December 1996 saw Geotek unloading its Geotest Inc. subsidiary, located in Irvine, California.
In June 1996, The Korean Ministry of Information and Communications awarded a consortium, Anam Telecommunications Co. Ltd., also known as Anam Telecom, in which Geotek holds a 21 percent interest, a license to operate a nationwide trunked radio system in Korea. Anam Telecom also includes over 50 Korean companies, among them Anam Industrial Co. Ltd. (Geotek’s joint venture partner in Korea), Hyundai Electronics, Korea Express, Korean Mobile Telecom, and Ssangyong Corporation. Geotek invested $7.7 million in Anam’s initial capitalization and another $1.8 million to the Korean Ministry of Information and Communications for the licensing fee, as well as agreeing in September to provide $14.8 million in 800MHz infrastructure equipment. However, this was offset by an advance payment of $9.5 million for the equipment. GTI entered into a subcontractor agreement with Rafael Armament Development Authority under which Rafael will manufacture the base station equipment for the U.S. and Korean wireless networks.
Geotek, via its wholly owned subsidiary Geotek Financing Corporation (GFC), entered into a series of agreements with Hughes in September 1996 under which Hughes agreed to manufacture at least half of certain components utilized by Geotek in its 900MHz infrastructure equipment through June 1999 in exchange for a security interest in the components manufactured and a $24.5 million intercompany note of Geotek License Holdings Inc., a wholly owned subsidiary of GFC. The same year, Geotek entered into a manufacturing agreement with Farbell Electronics in which Farbell would also produce subscriber terminals for the company’s digital wireless system.
Geotek Communications Inc. is more than a provider of a voice and data wireless network. Rather, it is an international creator of wireless business solutions for small and medium-sized companies, supplying them with tools that allow them to manage the flow of information to and from the field, ultimately improving the way they operate.
In 1996 Geotek also raised $245 million in new financing, including $55 million from Bronfman, Renaissance Fund and the George Soros Group. Network services were launched in Philadelphia, Baltimore, Washington, D.C., the New York Tri-State area, the Greater Boston area, Dallas/Ft. Worth, Miami, and Orlando.
By introducing high-value network services, equipment, and software applications as bundled business solutions, Geotek is significantly reducing the work required to manage fleets of vehicles and mobile workers, positioning itself for a future in which more and more people are telecommuting as well as on the road.
Bogen Communications International Inc.; Geotek Financing Corporation; Geotek License Holdings Inc.; Speech Design GmbH (Germany); Geotek Communications GmbH (Germany); Geotek Communications Inc. (U.K.); Geotek Israel; Geotek USA/PowerSpectrum; Geotek Technologies Israel; GMSI Inc. (Canada); Mobile Information Systems Ltd. (Israel); National Band Three Ltd. (U.K.).
“Adacom-Geotek in Legal Dispute,” Israel Business Today, July 1, 1994, p. 5.
Arnst, Catherine, “From Israeli Missiles to Cellular Phones; Geotek’s Military Technology Could Help in the Wireless Wars,” Business Week, October 31, 1994, p. 118.
Benson, Barbara, “Geotek Taps Niche of Wireless Market,” Business Marketing, September 1994, p. 20.
——, “Mobile Radio Firm Signaling Growth,” Grain’s New York Business, July 25, 1994, p. 22.
Blodgett, Mindy, “Geotek Enhances Specialized Mobile Radio Network,” Computerworld, December 4, 1995, p. 72.
Davis, Jessica, “Geotek Increases Competition by Planning Wireless Services,” Philadelphia Business Journal, August 19, 1994, p. 13.
“Geotek Communications Inc.,” Wall Street Journal, October 29, 1996, p. B9(E).
“Geotek Communications Inc.,” Wall Street Journal, February 11, 1997, p. B7(W).
“Geotek Communications Inc.,” Wall Street Journal, July 21 1997, pp. B10(W);B6(E).
“Geotek Extends to Dallas,” PC Week, June 3, 1996, p. 39.
“Geotek Goes Commercial,” Israel Business Today, February 12, 1996, p. 22.
“Geotek President Crane Resigns But Will Get Salary Up to A Year,” Wall Street Journal, July 8, 1997, pp. B8(W); A4(E).
“Geotek Wireless Network Gains Net Technology,” PC Week, October 28, 1996, p. 43.
Moore, Mark, “Geotek Rules 900MHz with Wireless Net,” PC Week, May 6, 1996, p. 41.
——, “IBM-Geotek Alliance to Bring Wireless Enhancements,” PC Week, July 14, 1997, p. 97.
von Daehne, Niklas, “A Killer Application,” Success, July/August 1995, p. 16.
—Daryl F. Mallett
"Geotek Communications Inc.." International Directory of Company Histories. . Encyclopedia.com. (September 18, 2018). http://www.encyclopedia.com/books/politics-and-business-magazines/geotek-communications-inc
"Geotek Communications Inc.." International Directory of Company Histories. . Retrieved September 18, 2018 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/geotek-communications-inc
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