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Cambridge, Mass., Wireless Firm Lands Deal with Canadian Carrier

Posted on: Monday, 22 March 2004, 06:00 CST

Mar. 22--Digit Wireless LLC, a Cambridge startup that has spent more than three years developing a reformatted wireless phone keypad with A-to-Z letter keys for sending text messages, expects to finally hit the consumer market by year's end through a new deal with Canadian carrier Telus Mobility.

Telus, which has 3.4 million subscribers and was an early financial backer of the seven-person start-up, said sometime later this year it will begin selling phones made by South Korean handset manufacturer LG Electronics that incorporate Digit's "Fastap" system as well as a digital camera. Fastap includes 26 letter keys inserted between the 10 numbers, #, and * on the phone keypad. The price for the phones, and the exact launch date, are not being disclosed.

While use of cell phones for sending short text messages has boomed in Europe and is beginning to grow rapidly in the United States, the hassle of having to press number keys up to four times to make letters has widely been seen as a drag on potential growth in usage.

Nokia, the world's leading handset maker, last year rolled out a 6800 model whose cover flips open to reveal a QWERTY-style keypad, and carriers including Nextel Communications Inc. and AT&T Wireless sell full-keyboard Blackberry messaging units that also work as wireless phones. T-Mobile USA's $250 Sidekick phone-messaging device is another approach to easing wireless text communication.

Fastap's system requires users to master yet another arrangement of letter keys, but Mathew George, vice president of Telus Ventures, the carrier's investment arm, said, "We believe that Digit Wireless has developed and implemented a keypad technology that is poised to have a significant impact on wireless data usage" and increase revenues. Telus has been promising to roll out Fastap phones since July 2002.

Digit has also closed a $4.3 million second round of venture capital funding from Telus Ventures and the investment arm of Qualcomm Inc., the San Diego maker of wireless network and handset software used by Verizon Wireless, Sprint PCS, and other carriers.

David Levy, the founder of Digit and a former top product design executive with Apple Computer, said Digit and Telus are starting with a camera phone because Fastap can help address one of the major inconveniences for users -- entering an e-mail address to send a digital photo. Levy said Fastap, which is designed to be installed on virtually any existing model of cell phone, can help carriers generate $100 a year more data-service revenue from a subscriber.

Adam Guy, a senior wireless industry analyst with The Yankee Group in Boston, said landing a first customer to prove the concept to the wireless industry "is a big deal for Digit."

"If Telus shows an incremental difference in data traffic by offering Fastap, then I don't see any reason why every carrier wouldn't want this," he said.

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