Wavecom embraces CDMA technology

Issy-les-Moulineaux, France -November 07, 2001

Wavecom SA (Nasdaq: WVCM; Nouveau Marché: 7306), a leading developer of digital wireless standard modules (WISMO™), today announced that it was broadening its offering to include CDMA (Code Division Multiple Access) technology. By embracing CDMA the company is opening up new development horizons.

This strategic decision reflects Wavecom's aim of offering products based on the most broadly accepted wireless standards. Whereas GSM/GPRS is at present the world's most widely used wireless communications standard, CDMA accounts for nearly 40 per cent of the market in North America and is making inroads into Asia, particularly in China. Both regions are strategically important for Wavecom.

Commenting on the decision, Wavecom CEO Aram Hékimian said: "Having established the WISMO concept in the market for GSM/GPRS, we have now set our sights on CDMA, the second most popular technology in the marketplace, in order to address the diversity of technologies used in wireless communications. The major advantage for our customers is that they will be able to offer in the same product either GSM/GPRS or CDMA capability."

To implement its CDMA-compliant WISMO offering, Wavecom is acquiring the assets and workforce of the US company Iconn Wireless for consideration of approximately $5 million. The agreement is effective on 7 November, with closing expected to take place in early December. The closing is contingent on final agreement on the terms of the purchase and upon shareholder approval.

The consideration includes approximately $3.8 million for the purchase of tangible and intangible assets of Iconn Wireless, of which approximately $3.5 million is expected to be allocated to goodwill. The remaining $1.2 million is in the form of deferred compensation to be paid to Iconn Wireless employees and founders, contingent upon the successful launch of the CDMA-compliant WISMO offering.

Based in California, Iconn Wireless designs wireless modules based on CDMA technology. Iconn's engineers will report to Wavecom Inc., the US subsidiary of Wavecom. Says Hany Neoman, chief operating officer of Wavecom Inc.: "With this deal, Wavecom Inc.'s US core team will be expanded by the arrival of twenty CDMA experts familiar with the design of wireless communication solutions".