The company, that has recently entered the list of 25 leading startup companies expected to go public in the next two years, continues to rapidly grow despite the recession, and is already developing frequency planning systems for the 4th generation of cellular communications

Schema was chosen as one of 25 leading startup companies expected to go public (NASDAQ) within the next two years. Schema provides an essential solution to a problem that concerns even the largest cellular operators and has been showing a sharp growth in income despite the recession in the wireless market. The Israeli company, which provides optimal planning solutions for cellular network operators, has conquered the US cellular market, including tier one operators, and has recently begun conquering the European market. In between, Schema is not waiting around for the introduction of 3G and is already working on wireless LAN optimal network planning solutions.

The most important advantage of Schema’s solution comes from the considerable savings it allows the cellular operators. The growing needs of operators to minimize expenditure while increasing capacity or transitioning from TDMA to GSM or other advanced cellular technologies, increase the demand for Schema’s system.

An agent of the US cellular market explains, “The migration to new technologies forces the cellular operators to increase the capacity of their networks, but the high cost of spectrum poses a difficult problem. This problem is one of the reasons for the growth in Schema’s revenues and this is also the reason why tier one American operators prefer Schema’s solutions over others”.

The urgent need in the industry for such systems is one of the main reasons Schema was chosen by Venture Reporter magazine to be one of the leading 25 startup companies, among the companies expected to file for an IPO on NASDAQ in the next two years. The magazine examined software, biotech, semiconductor, internet and medicine companies. Some of the other companies included in the list were: Kadiri, Majisto Systems and Prometheos Labs.

So what does Schema do?
The technology developed by the company allows the cellular operator to plan the location of antennas (base stations) and angles in a manner that allows maximal capacity utilization without interference or dropped calls. Raising a cellular antenna is a very costly action. Optimal planning of antenna location and angles allows considerable savings in the number of required antennas. Schema’s solution for UMTS networks (3G technology), for example, enables the operator to reduce the number of required antennas by 20% during initial network deployment.

Schema is now also looking into the 4th generation of wireless technology – Wireless LAN. “We are pursuing this avenue especially in the area in which wireless LAN companies are attempting to increase their coverage areas from ‘hot spots’ to ‘hot areas’”, says Dr. Yosi Ben-Dov, CEO of Schema. “It is important to understand that while the industry deals only with ‘hot spots’, there is no need for frequency planning or systematic network planning. Any restaurant, coffee house, airport, hotel or other establishment can set up a local ‘hot spot’ allowing wireless communication within the immediate vicinity. The ‘hot spots’ provide roughly 100 meters of coverage around the wireless communication station (WIFI)”.

“Technology exists today that is said to increase the coverage area of these ‘hot spots’ to areas of 2-4 km. The transfer of this industry to wider coverage areas may result in overlapping ‘hot spot’ areas and RF channel interference. Therefore, expanding the coverage of wireless LAN networks will create a need for frequency planning solutions such as those offered by Schema”.

In the meantime Schema is focusing on frequency planning solutions for 2.5G and 3G cellular networks. “One of the important dilemmas that concern operators is how to allow for the maximal number of available channels per antenna, to increase network coverage, in a way that will not cause frequencies to interfere with each other, disconnecting calls”, says Dr. Ben-Dov. “In other words, how to increase network capacity and maintain quality at the same time”.

What is the alternative to your technology?

“The alternative to increasing network capacity is to acquire additional antennas, while decreasing the coverage and power of each antenna. However this causes two main problems: first, more antennas mean more expenditure and regulatory approval requirements. Secondly, environment activists do not like to see many antennas”.

What are the markets in which you operate?

“Most of our sales are in the US and South America. We have recently begun selling in Europe and the Far East as well”.

Who are your competitors?

“To the best of our knowledge, there are currently no competitors for our new GSM/GPRS and CDMA/CDMA200 solutions that are intended for hybrid networks. For our other products we have smaller competitors such as ComOpt and Scoreboard that perform frequency allocation optimization. However these companies do not utilize Evolutionary Algorithms (see box below).

How does your solution work in the field?

“First we build a computerized geographical map of the operator’s coverage area. To this map we add the locations of the operator’s existing antennas and the frequencies allocated to each. In the next stage, we define the location constraints and objectives, headed by savings in terms of expenditure. By the way, expenditure can also result from less than optimal allocation of resources. After these stages are completed, our algorithm examines possible solutions for network deployment, systematically rules out the less worthwhile options and offers the optimal allocation”.

How does your system operate in hybrid GSM/GPRS networks?

“A hybrid network such as this is actually an upgraded GSM network, altered to allow GPRS services. In such a network, the operator is required to use the same amount of resources and the same frequencies used to carry voice, for the purpose of carrying data. Schema’s software allows the operator to optimally allocate resources between voice and data”.

“We expect that in the upcoming 1-2 years, the main growth of cellular companies in Europe and the Far East will come from data services provided over GSM/GPRS networks. This is why we believe our solution will be critical to operators basing GPRS technology in their networks”.

The largest American operators, headed by Cingular and AT&T Wireless, are currently migrating from TDMA to GSM networks. How does your solution fit in?

“The expected transition time from a network with one technology to one with a different technology is expected to last between five and ten years, during which time the two networks are required to operate in parallel. However the operators do not have enough frequencies to support a dual network. This is why the operators are required to utilize available resources in the most efficient manner possible, even beyond the initial network plan that was not designed to support two networks with the same range of frequencies”.

“In Cellcom (Israel) for example, such a problem does not yet exist since Cellcom was given additional channels for the purpose of deploying the GSM network. However, in the future, when Cellcom will need to transfer all subscribers form the TDMA to the GSM network, there will be a need to considerably increase the capacity of the existing network”.

What is the main factor that causes the delay in 3G network deployment, other than the debts of the cellular operators?

“Most of the operators are not completely sure of the 3G cellular business model. Most of them still suffer from the trauma of WAP. Therefore, before they invest in 3G network deployment, they prefer to upgrade existing networks to GPRS and see if the data services business model proves itself. In the upcoming two years, the operators will examine the extent of GPRS data service use. If the demand is too low, they will have no justification for migrating to 3G”.

For several years now, there has been talk about the ability of EDGE technology to provide capabilities very similar to 3G technology but at a lower cost, since migration to EDGE does not require the deployment of new infrastructure. On the other hand, cellular infrastructure vendors are attempting to promote the entrance of 3G technology, since they are interested in increasing their revenues by deploying new infrastructure for the operators. What do you think can be expected from EDGE in the near future?

“I estimate that towards the end of 2004, most cellular operators around the world will begin upgrading their networks to EDGE. EDGE is expected to arrive in the US even sooner, since American operators are deploying EDGE ready GSM-GPRS hybrid systems”.

What is expected to happen in the area of wireless LAN in the upcoming years and which market sectors are expected to generate the highest demand?

“It is safe to assume that wireless LAN will penetrate the US most quickly. Wireless LAN addresses mainly the market of mobile and handheld computer users. Since computers are used in the US a lot more than in other countries, it is expected that Americans will be the first to use wireless LAN. Furthermore, wireless LAN is expected to address mainly the business market, at least in the initial stages”.
______________________________

About Schema: From the ‘Arrow’ Cruise Missile to Cellular

Schema was founded in 95’ by Dr. Yuval Davidor who was attempting to make commercial use of Evolutionary (Genetic) Algorithms. These algorithms examine every possible solution, eliminate the possibilities and point to the optimal and most efficient solution. Evolutionary algorithms are utilized by Schema to find optimal solutions to complex problems such as optimal cellular antenna placement.

Schema initially addressed the market of security and attempted to assist in the ‘Arrow’ cruise missile development project. After this, Schema turned to the shipping market for which it assisted in solving freight loading problems. In 1998, the company set out to search for a more lucrative market and reached the cellular market. At the time, Pelephone and Cellcom were the cellular companies working in Israel. Both companies were in need of Schema’s system after encountering frequency allocation problems causing interference and dropped calls.

Among the new systems announced by Schema are a GPRS/GSM solution for optimal channel allocation in hybrid network environments and a CDMA/CDMA2000 solution.

“Every base station usually has three antennas”, explains Dr. Yosi Ben-Dov. “In order to optimally plan the network, there is a need to determine the angle and slope of the antenna and the angles of transmission. In traditional planning each antenna is tuned manually and separately. The problem with this system is that it is expensive and time consuming”.

“Schema’s system allows for all network antennas to be handled automatically. The system calculates the optimal direction and tilt parameters for the antennas while allowing the operator to remain within predefined budget, capacity and quality constraints. In addition, the system allows the cellular operators to increase the rate of data service transfer and improve the handoff of subscribers between cellular sites, or, in other words, reduce the number of dropped calls”.


Credit: Globes