Sparkplug Inc. builds on Prairie iNet's niche

By Joe Gardyasz
Senior Staff Writer
joegardyasz@bpcdm.com

Much like the scalability of the wireless broadband capacity it offers, Sparkplug Inc. believes its ability to ratchet up its services to meet increasing client demands will be a key to its success.

The Chicago-based company, which in July 2006 merged with West Des Moines-based Prairie iNet LLC and Telespectra LLC of Scottsdale, Ariz., now provides wireless broadband services to businesses in eight states, including Iowa.

With a $22.5 million round of equity and debt financing announced on Jan. 16, Sparkplug has "a tremendous opportunity" to further expand its wireless network, said CEO Bill Malloy. With that expansion, Sparkplug's West Des Moines location, which currently employs 22 people, will also serve as a customer support center for all of the company's clients.

A privately held company, Sparkplug does not reveal revenue or income data, but says its eight-state territory makes it one of the largest service providers in the emerging business wireless broadband market.

Businesses are beginning to consider wireless broadband as a primary service rather than a backup system, Malloy said in a telephone interview from his office in Chicago.

"What drives it a lot of times is that a business has very unique demands that call for very large bandwidth," he said.

"We're starting to see the advent of more video services, for instance, and businesses are asking, 'How do I scale up my broadband needs?'With our service, it's literally a phone call or an e-mail away to size it up."

In Greater Des Moines, Sparkplug sees particular opportunities in serving the financial services industry and the legal and architectural professions, each of which typically require the ability to send large volumes of data.

Prairie iNet is in the midst of rebranding itself as Sparkplug in Greater Des Moines, but will retain its original name in the remainder of the state, said Steve DenHerder, Sparkplug's vice president of business operations in West Des Moines.

"We have plans to hire additional people this year as we bring on new territories and new markets," DenHerder said."They're great jobs with a technology- based company, from accounting and customer and network support to the operational parts of the business."

Sparkplug's merger with Prairie iNet and Telespectra brought together three broadband providers that were successful in their respective markets, Malloy said.

"When we brought together the three companies, we had very strong revenue and profitability," he said."This round of funding was put together to continue to build out our networks and to grow in other markets."

In addition to Iowa, the combined company serves markets in Illinois, Arizona,Tennessee, Nevada, New Mexico, Colorado and California, and will focus on building additional business in metropolitan markets such as Greater Des Moines.

Malloy, previously a senior executive with McCaw Cellular Communications Inc. - a pioneer cellular telephone company that AT&T Corp. bought in 1993 - leads the combined company with Jeff Hardesty, CEO of Telespectra and head of Sparkplug's Southwest division. Neil Mulholland, a co-founder and CEO of Prairie iNet, serves on the company's board.

Sparkplug's chairman, former AT&T Wireless CEO Steve Hooper, is also a founding partner of Ignition Partners, a venture capital firm in Bellevue, Wash., that led the $22.5 million private financing deal. Other partners in the financing round were The Greenspun Corp. of Henderson, Nev., a real estate, media, travel, gaming and technology company whose holdings include SkyMall magazine and travel Web site LasVegas.com; and Trilogy Equity Partners, also a venture firm in Bellevue,Wash.

As a combined company, Sparkplug has a network of hundreds of antenna sites, which are tied together with network operations centers in Chicago, Phoenix and West Des Moines. "We build and maintain that architecture ourselves, so that is a key piece of what we do," Malloy said.

In contrast with Wi-Fi services, which might provide wireless broadband hot-spots in public buildings, or the emerging Wi-Max systems geared toward communitywide coverage, Sparkplug provides a dedicated service for each client, which can be scaled from 1 megabyte per second to as much as 200 Mbps, depending upon the business's needs.