Entropia: both Two-Way-Radios and network ‘as-a-service’
At the end of last month Entropia announced setting up a TETRA network together with KPN Critical Communications and Motorola.
There's a great deal going on at Entropia Digital. At the beginning of last month the enterprise caused a huge stir in the world of two-way radios by wanting to accredit 15,000 radios via a tweet.
At the end of last month they announced setting up a TETRA network together with KPN Critical Communications and Motorola, and in the meanwhile they've introduced an operator model. What's happening in Bruges?
Philip Vercruysse and Rik Bailliu are relaxing in the spacious conference room of their new offices. Although there's still some work to be done - an enormous television set is parked against a wall awaiting installation - the building radiates a kind of power. Is it perhaps because the office sticks out somewhat above the tops of the adjacent offices and the rooms at Entropia Digital look out across this part of Bruges like a penthouse?
Philip Vercruysse is the CEO who founded Entropia Digital 23 years ago with an investment of €250. As a minority shareholder Rik Bailliu is a co-owner who is responsible for Entropia Digital's commercial routes. The duo are seated at the table as real winners. That's understandable. After having sent the accreditation invitation for 15,000 radios, the collaborations between Motorola, KPN Critical Communications and the 'operator model', the Belgian network owner seems to have found the proper flow.
Congratulations on your successful achievement. You've not been this strong for quite a while. Finding funds in times of crisis is pretty difficult. What's been the reason for you being on the right track now?
Vercruysse: “I can quite understand that there was doubt about our commercial and financial strength. And it's not always been so prosperous. However, there have been demonstrable reasons for this. Until 2005 we'd always managed quite well and there wasn't a problem. In that year, together with an investor, we were granted a Telecom Agency licence for an analogue network. We set up that network step by step, but then suddenly the former minister Guusje Ter Horst, said that there was no alternative for the C2000 system in the market. While we were rolling out a network and also having an obligation to rolling it out.”
Bailliu: “What we did was reinvest every euro that we earned into the network. That's not favourable for one's cash flow. But on the other hand, by continuously rolling out, you've suddenly got a network that's worth €12.5 million.
Vercruysse: “What we actually did was undertake long term investments with short-term cash flow. In retrospect it's successful, but it's also very risky. And finding funds was pretty difficult, but we got there in the end.”
What is the current financial status?
Vercruysse: Since 30 June we no longer have debts and we've acquired a substantial capital by means of the Crowd funding principle. And the funds that we do have, are reused to roll out the network even further. We don't need a bank for this.”
Bailliu: “With the current positive financial status we can utilise the network very well. In the forthcoming decade we have a perfect supply for the market. At the end of 2013 all redundant switches, including the first 100 masts, must be converted or built. In the first half of 2014 another 100 masts will be added. The old Dimetra 5.2 TETRA network is comprehensively being replaced by the new state-of-the-art Dimetra 8.2 network. This will significantly accelerate Entropia's countrywide roll out plan.”
Accelerate! What's the rush?
Vercruysse: “Up to now we've always built everything ourselves, but that takes time. Nowadays we outsource more; we've selected a company that will build the masts for us. They work according to a fixed pattern, a kind of Entropia Design Guide.”
Bailliu: “We've standardised the construction of the sites. Every site will be given a standard look and feel, designed on the requirements that we and our users demand from a network.”
How soon will there be a nationally covering network?
Vercruysse: “The countrywide coverage is almost in place. The Entropia network will be ready by about June 2014.”
Great, then you have a network. What then? An operator model?
Vercruysse: “The operator model is a deliberate strategic choice. We're busy with a marketing plan to put Entropia Digital's services into the marketplace.”
Bailliu: “We're focusing on coverage. That's our product: radio coverage, both indoors as well as outdoors. Where it concerns indoor coverage, we can deliver customisation. Outdoors has already been achieved via our radio coverage. Radios are our first step. This is followed by telemetry.”
Two-Way-Radios as a product. How should I see that in absolute terms?
Vercruysse: “A customer arrives with a need for communications. He wants communications in a region, or on a site, or countrywide, that doesn't matter. He leaves with a service-providing contract including the hardware. A TETRA radio is included in the subscription. When the radio is faulty, then there's a so-called swap formula. He can simply exchange the radio.”
Bailliu: “In brief: the user gets the services and the radios as part of the subscription fee.”
Can I compare it with my contract with the telephone provider, where I get a free iPhone and pay a subscription fee?
Vercruysse: “Yes, that's right. But we go a step further, by also providing a service like the swap formula. Our slogan used to be: you don't need to invest in infrastructure. Our slogan today is: you don't need to invest in infrastructure and peripheral equipment.”
Bailliu: “And the peripheral equipment includes the radio, the guarantee, the battery, and a protective cover. Everything's complete, the client's been taken care of.”
You recently called for 15,000 TETRA radios in a tweet. What kind of order was that?
Vercruysse: “We requested an accreditation for 15,000 TETRA radios. We need those radios to be able to migrate all analogue clients to digital in a couple of years. That would be for all our current clients. In addition there are now some projects in which the clients are doubting to take the necessary steps to switch because of a costly capex (investment in non-consumables, ed.). They don't need to concern themselves about those costs anymore, we've already made the investments. And thirdly we foresee growth taking place on a national level. We want to be prepared for that.”
Bailliu: “With our network we can deliver customised communications without the clients having to worry about infrastructure and radios. We'll need good radios for that. Plenty of good radios. So we called on the market to see who wants to or who can deliver those radios. We evaluate the quality of the equipment so that we're sure that our clients get the best. We sought three batches of 5,000 radios.”
And, have you had any responses to the tweet?
Vercruysse: “A number of suppliers have subsequently presented themselves. Our intention was to reach a market which, in essence, is very internationally oriented. We'd previously tried to explain that we really wanted to accredit a whole lot of radios, but nobody had responded. It was via this tweet that we ended up amongst the higher echelons of the suppliers. This tweet worked.”
Source: Entropia Digital
