Communications startup xG Technology last month demonstrated its xMAX wireless voice-over-IP system, announced several new customers, delayed its first commercial launch to November and discussed the future roadmap for the company, which could include public-safety and utility applications.

Early in September, xG conducted a demonstration of xMAX operating in the unlicensed ISM band for an audience of investors and representatives of financial institutions, including Morgan Stanley's Colm Donlon, who helped engineer such high-profile mergers as Nokia-Siemens and Skype-eBay in recent years.

Initial demonstrations were undermined by what company officials described as “military-grade jamming” of the frequencies in the area. Outside calls were made the following day, when the interference disappeared.

“They had to move the demo from outside, where the interference was just too much — somewhere between 30 and 50 watts, Joe [Bobier, inventor of xMAX,] estimated — to inside,” said Stuart Schwartz, a Princeton engineering professor who has been consulting for xG Technology. “Of course, the building shields quite a bit of the interference, so people made phone calls from inside the lab.”

In addition, xG demonstrated in a hotel lobby that its core technology could deliver streaming video more than 50 feet using just 3 nanowatts of power, which demonstrates potential applications in the machine-to-machine arena, such as sensor networks, Schwartz said.

One demonstration not attempted was making calls from a moving vehicle, because “it was not ready yet,” said CEO Rick Mooers. Schwartz, who served as a consultant to Qualcomm when it first offered CDMA systems, said optimizing a system for high-speed mobility can be challenging with any new technology.

“A cellular system can be almost as complex as a space shuttle launching,” Schwartz said. “The timing has to be so precise, and the synchronization has to be so precise. They're making progress. Is it as fast as everyone would like? No. Will it speed up? I just don't know. But I've been doing a lot of analysis of the system now that it is finalized, and I think it's looking pretty good.”

Company officials expressed confidence that the technology would be fully mobile by the end of November, when ISP Far Reach Technologies of Volusia County, Fla., is scheduled to launch its xMAX offering commercially.

Initially, the Far Reach offering was scheduled to be a voice-only service started in the summer. Instead, the ISP's commercial launch will use a new xMAX phone that has a form factor similar to cellular handsets and supports text messaging as well as phones, said Frank Peake, assistant chief operating officer for xG Technology.

“We got to a point where — based on my focus groups and such — we made a business decision that the upgraded, redesigned handset that Cambridge [Consultants, the xMAX phone manufacturer,] did was going to have a much greater impact on the market than our original,” Peake said. “It's a better-looking phone, and it has a little more functionality.”

When xG Technology completes its tweaking of the xMAX system, the company will enter mass production of the base stations and handset, Peake said. The company has market agreements with service providers in Kansas City, South Carolina, north and central Florida, and a “backlog” of others, Peake said.

“A lot of people are starting to be interested,” Schwartz said. “They look at the economics and realize, ‘I don't have to buy spectrum from the FCC. I set up one tower on a high point in my town. I can communicate in a rural or suburban area easily seven miles around, so that's a town with a radius of 7 miles. That's 150 square miles, and a lot of towns fit in 150 square miles.’”

While mobile VoIP is xG Technology's first application, the company remains on track to unveil the first 4G wireless broadband service late in 2008, Peake said. In addition, the company plans to explore using its technology in sectors outside the commercial arena.

“For a couple of years, we've said that content providers are probably our best partners and probably number two may be the utilities — probably the two largest, well-heeled groups that want a network but don't have access yet,” Peake said.

Mooers said he believes xMAX's fundamental characteristics are ideal for the public-safety market, which he described as “a huge opportunity.” Not only is the technology power-efficient, it also supports peer-to-peer communications.

“We have a feature in our handset that allows phone-to-phone calling that does not have to go through the base station,” Mooers said. “You don't get the same range, but you get up to a two-mile range on it. That is a disaster-type scenario. If your systems go down and all your infrastructure goes down, if you get within two miles of who you're looking for, their phone will work without the base station.”