Wi-fi venture proving hot stuff

Tomizone's Steve Simms aims for number one spot in wi-fi

Steve Simms talks the kind of language that gets investors interested. Seated outside a Starbucks cafe in Auckland, one of his latest customers, he offers a prediction: "In the next two to three years we'll be number one in the key markets of a billion [people] plus."

It's a big call, but Simms runs a business with the potential to deliver such ambitions.

Simms founded Tomizone in 2006 on the back of a simple idea take a standard wireless broadband router, download his proprietary software and bingo, you've created an instant wi-fi hotspot.

Wi-fi has been around for several years and is widely used in public places such as airports and cafes, allowing travellers with laptops to get internet access on the move. With Tomizone, however, anyone can have a hotspot and get a slice of the revenue Tomizone generates from it users pay $3 an hour, $6.50 a day or $30 a week.

This means Simms's hotspots can spread quickly and cheaply, an important attribute in a market where the service has become commoditised.

Business has been "crazy" in the past 18 months, says Simms, but it's been growing "exponentially in the last six".

"The efforts of our staff are really paying off".

In New Zealand there are about 2500 Tomizone hotspots, about a quarter of them in high-profile areas capable of earning good revenues. That's not bad, but the teeming markets overseas are the main attraction.

"Our recent deal with [technology retailer] Reliance World in India is an example of that," says Simms.

"There are currently 1600 hotspots in India.

"By the end of September, Tomizone will probably have 2000, so Tomizone could be the number one service provider by the end of the year.

"In China we're going to expand to 7000-8000 these are with blue chip clients like China Mobile. They understand our proposition and how it complements their service."

Simms won't be drawn on the financial implications of those numbers, save to say the company is "pretty close to break-even".

The wi-fi market worldwide is growing at 15-20% a year and currently generates annual revenue of $US2.4 billion ($3.7b), he says. "We'd like to take a good chunk of that.

"In the quantum of hotspots, Tomizone has 5% of the market. In the next three or four years we'll have 20% of the global market."

Three years ago the Tomizone story so impressed Warehouse founder Stephen Tindall he invested in the company and emailed everyone he knew to tell them how great it was.

Today, Companies Office records suggest he owns 51% of Tomizone, with the remainder owned by Simms and business partner Phillip Joe.

This month the company is seeking further backing from professional investors through an offer of "series A" securities.

— Photo: Michael Bradley

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