New cellular company targets O'ahu consumers
By Sean Hao
Advertiser Staff Writer
Cell-phone users in O'ahu could soon have another option when shopping for plans. Coral Wireless LLC, a Delaware, Md.-based company, yesterday said it lined up $8 million in financing to build a wireless communications network on the island.
If successful in launching a communications service, Coral would take on established wireless competitors such as Verizon Wireless, Sprint PCS, AT&T Wireless and T-Mobile USA.
The company will offer wireless phone service, but hasn't decided on what other types of wireless services — such as video or data — it will offer, or what it will charge.
"It's a highly competitive market, and we're not real anxious to tip the competitors to what we're doing," said Stephen Johnston, a principal in Pacific Communications LLC, which is related to Coral and holds the Federal Communications Commission license Coral will be using.
The company was drawn to Honolulu by its small size and dense population, Johnston said.
Before Coral can compete, the company faces hurdles, including a Sept. 29 deadline to begin service to at least one-third of O'ahu's population. If Coral doesn't meet that deadline, its license could be in jeopardy.
Coral and the Jackson, Miss.-based Pacific Communications are seeking a delay in the FCC deadline until June 29, 2005. The two companies, which have similar ownership, said they are prepared to have the service running by Sept. 29, but could do it more cheaply and provide better quality if the deadline is extended.
However, it's not easy for companies to get extensions to build their networks.
"I can tell you that they have a tough row to hoe in getting an extension of a build-out deadline," said Lauren Patrich, an FCC spokeswoman.
The company received the $8 million startup investment from Boston-based M/C Venture Partners during the fourth quarter of last year, according to PriceWaterhouseCoopers MoneyTree Survey.
Coral's other investors include Alexandria, Va.-based Columbia Capital, which also was an investor in former Honolulu tech startup Pihana Pacific. Pihana, a company founded by kama'aina Silicon Valley veteran Lambert Onuma, garnered more than $240 million in venture money to build a network of Internet data centers in Pacific Rim nations. It was subsequently acquired.
To build it's network Coral will need "tens of millions of dollars" said Johnston, who added that the $8 million invested by M/C Venture Partners represents a fraction of total investments.
"We're adequately funded to complete the endeavor," he said.
Ted Liu, director for the Department of Business, Economic Development and Tourism, said Coral investor Columbia Capital has a good track record when it comes to investing in communications companies. Liu was a partner at PacifiCap Group LLC when the Honolulu-based private equity firm also invested in Pihana.
"They're definitely for real," Liu said of Columbia Capital. "They've invested in Hawai'i so they're already familiar (with the area) on that basis."
Plans were to launch the service several years ago, however, the license in question was tied up in a lengthy battle with former license holder American Wireless License Group LLC, Johnston said.
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
