From publisher to retailer to...wireless wizard

In a business sense, David Spence has tried his hand at many things. His first foray into the IT industry was with publisher Australian Consolidated Press, where he landed a job in 1989 as general manager of computer publications, overseeing titles like Australian Personal Computer, PC Week and PC User. He had emigrated from Cape Town, South Africa, to Australia in 1988.

"Up until then, I’d never had a computer job or a telco role. I’d always been in retail or distribution," Spence says.

He left publishing and went back into retail (running Freedom Furniture) before joining Sean Howard who had raised $2 million to start OzEmail in 1995.

"Sean asked me to come and run it as managing director. We grew it until we listed it on Nasdaq and in 1999 we sold it to Worldcom. We split it into three: OzEmail became a retail business, the corporate business became UUnet and all the global customers went to Worldcom.

"I was CEO of OzEmail and UUnet. After a year with Worldcom I couldn’t hack them anymore so I left."

Spence also tried his hand at the satellite broadband business through Access One, and content through the float of Chaos Music and an online advertising business dubbed emitch, which is still in operation today.

"I thought content was the next big thing to get into after internet access. I was right and wrong.

"It was the wrong time. The only broadband network viable out there was ADSL and that means reselling Telstra and there’s no life for anybody reselling Telstra.

"The only other alternative was satellite but it was costing me a fortune in terms of installing each customer," he recalls.

Spence: You can get distracted - you need to sit back and look at where the world is going, the overall trends, not just Sydney

He admits it was a tough school. "I was trying all these things and they were not going anywhere," Spence says.

He chucked it all in and went back into retail, joining a business partner at retailer OPSM. In 2003, Spence sold out.

"The day I sold, Peter Shore [current chairman of Unwired] phoned me up and said, 'I’ve found some new technology -- broadband is going to be back in again and we’re going to build the network like a mobile phone network, and I shouldn’t miss this great opportunity'."

Spence recalls suggesting that building a new mobile network would be an expensive task. Shore raised $100 million, mainly from overseas investors, and together they launched Unwired.

Spence joined in January last year. "I’ve been a little bit smarter [this time] -- we’ve been more consistent building good systems and getting our marketing right. There was a mad scramble to get the network built in eight months, getting all the systems in, billing and launching the service."

The Unwired service was launched in August last year. Two months ago, the company announced it had secured 25,000 customers, mostly residential.

"We’re going along quite nicely. We’re tracking towards our break-even point for Sydney, which is about 70,000 customers, and we’ve got plenty of dollars left in the bank. We are now starting to work out how we are going to do the rest of the country," he says.

Last month, Austar agreed to trade some of its 2.3GHz spectrum licences to Unwired in a deal aimed at spreading wireless broadband further around Australia.

Unwired is also lobbying the government to get behind alternative broadband infrastructure for the bush. Spence claims Unwired is getting its message across.

 "We think wireless broadband is the only way to get it done in rural Australia." Unfortunately, companies like Unwired get ‘outmarketed’ by Telstra in those areas, Spence says.

He is adamant that the only way to get broadband quickly out to non-metropolitan Australia is for it to be wireless. "It will take 20 years and so many billions of dollars from Telstra to do it via the copper method.

"We built a whole Sydney network for $28 million, which covers 4.5 million people. We could do 75 percent of Australia with a capital expenditure of only another $150 million," he says.

Unwired is, of course, looking for more money. "To do the rest we need money, whether it’s going to come from investors or partnerships. I do think broadband needs to be rapidly rolled out across Australia."

The development of the forthcoming WiMAX standard will also drive wireless in the future. "What GSM did for mobile phones, WiMAX is going to do for mobile data. We feel we’re in a great position owning the right amount of spectrum and have a WiMAX road map.

"Once Intel starts producing WiMAX chips going into laptops, PCs, handheld devices and phones, you won’t need 'the rabbit' [the Unwired modem]," he says. "I think [with WiMAX] you’ll see a whole lot of new developments in the internet space because of the mobility of data.

"At the moment our customers download 40MB a day -- over 1GB a with peer-to-peer business going on will change the way things are done," he says.

"The cost of running out wireless broadband is a fraction of the cost of running DSL and it’s highly convenient and very easy to use."

Spence wants to see 50 percent of the Australian population covered by the time WiMAX is deployed in a chip inside laptops in early 2007.