WiMAX operator Towerstream announced plans to purchase fixed wireless business assets from One Velocity, which operates in Las Vegas and Reno, Nev., and gave more details on its plans to offer a third-party Wi-Fi offload network for mobile operators.
Towerstream, which operates in 11 markets that include New York City and Los Angeles, said the deal is expected to close this quarter. As a result of the announcement, Towerstream increased its revenue guidance for the second quarter to between $6.4 million and $6.7 million.
Meanwhile, the operator revealed that is Wi-Fi offload program totaled $1.2 million in the first quarter 2011. In January, Towerstream revealed it was getting into the Wi-Fi hotzone game with an aim of becoming a wholesale provider to operators desiring to offload heavy mobile data traffic. After a pilot project in midtown Manhattan that saw an average of 250,000 connections and more than one terabyte of data transferred per day, primarily by handsets that just found the free trial network, Towerstream was convinced of a business model.
The company, which is using equipment from Ruckus Wireless, is now developing an initiative to build out additional hotzones throughout New York City and other key markets, including San Francisco and Chicago.
"We continue to achieve significant progress building what we believe is the largest and fastest Wi-Fi offload network in Manhattan," said CEO Jeff Thompson in a release. "The NYC network will be ready for customers in the second half of 2011."
The company reported a net loss for the first quarter of $1.5 million on revenues of $6 million.
"Adjusted EBITDA profitability from our core business continues to increase and our financial position remains strong," said CFO Joseph Hernon. "Cash balances decreased only $1.2 million in the first quarter even though we invested approximately that amount on our Wi-Fi offload program."
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