Airspan heads back to private status after Chapter 11 filing

Airspan heads back to private status after Chapter 11 filing
By: FierceWireless Posted On: April 02, 2024 View: 15

  • The prepackaged bankruptcy proceeding allows Airspan to eliminate debt

  • Airspan will emerge as a private company after regulatory approvals

  • Airspan is still bullish on open RAN, private networks and small cells, even though none of those areas have grown as fast as expected

It’s tempting to say “another one bites the dust” in reaction to Airspan Networks’ March 31 Chapter 11 bankruptcy filing.

But like others that went public through the special purpose acquisition company (SPAC) process, it expects to come out the other side as a leaner – and maybe a little meaner – competitor.

In 2021, Airspan went public via a merger with New Beginnings Acquisition Corp., trading on the NYSE under the symbol “MIMO.” But debt piled up and heading into 2022, the markets started to close down, making it more difficult to raise financing. After a couple rounds of painful layoffs, it’s now heading into Chapter 11 proceedings with the support of 97.4% of its funded debt creditors.

The plan is to eliminate all of its existing funded debt and secure up to $95 million of new equity financing, with funds managed by Fortress Investment Group. Airspan said in a press release that it will continue with uninterrupted operations during the financial restructuring, paying employee wages as well as vendors and suppliers “in full in the ordinary course of business.”

New lease on life

Airspan President and CEO Glenn Laxdal, a former Ericsson executive, told Fierce that the company will come out of the bankruptcy proceedings better positioned to execute its plan to capitalize on growth opportunities in public and private network markets.

“We now have a new lease on life to be able to go after these growth opportunities,” both with mobile network operators as well as in private networks, he said.  

Airspan is certainly a much leaner organization than it was a few years ago. It went from about 800 employees in the first half of 2022 to around 307 employees today, most of whom are outside of the U.S. Last year, it sold its Mimosa business to Radisys, a subsidiary of Jio Platforms, bringing in $60 million in cash.  

Inside the U.S., Airspan’s biggest customer is Gogo, the air-to-ground broadband provider. Other U.S. customers are Charter Mobile and NextWave, as well as small, regional operators and Wireless Internet Service Providers (WISPs). But about two-thirds of its business is outside the U.S.

Airspan’s manufacturing is in Vietnam, where its partner is Foxconn.

Customers lower their spending  

As major macro 5G buildout winds down, vendors of all sizes are feeling the burn, especially in the Radio Access Network (RAN) market. After big years of spending, operators are lowering their capital expenditures. Meanwhile, U.S. operators also are taking a lot longer to move from non-standalone (NSA) 5G to standalone (SA) 5G and network slicing than many expected.

At the same time, the market for private networks has been slower to take off, with enterprises more focused on proof-of-concept deployments versus commercial deployments. In North America, most of Airspan’s private networking business using CBRS has been 4G LTE based.

Recon Analytics analyst Daryl Schoolar said he was not surprised to hear of Airspan’s bankruptcy protection filing amid executive turnover and falling revenues in 2023.

“It is not easy being a small RAN vendor,” Schoolar told Fierce via email.

“Margins in the base station business are small, which means vendors need to sell in large volumes," he continued. "Airspan had placed its recent bets on open RAN and private wireless networks. Neither of them have developed quickly, and larger RAN vendors like Ericsson, Nokia and Samsung are all competing for the same opportunities in open RAN and private wireless networks.”

Still, Airspan remains bullish on open RAN, private networks and small cells. All of Airspan’s software is open RAN compliant, and AT&T’s decision to go all in with open RAN – even though it’s with Ericsson – is seen as an huge endorsement of open RAN. Airspan’s neutral host networking business is starting to pick up in North America, where it’s offering in-building coverage using CBRS spectrum. And small cells? It’s only going to grow from here, according to Laxdal.

One reason for Airspan’s optimism on small cells is the expectation that 5G will drive more small cell deployment. Broadly speaking, the spectrum bands in 5G are higher than 4G, which was concentrated in the 800 MHz – 2 GHz range. With millimeter wave and higher spectrum bands come the expectation for more small cells.

The company deployed a large number of small cells in the densification phase of 4G LTE for companies like Rakuten Mobile in Japan and Reliance Jio in India. In 5G, the densification phase has yet to come, but Airspan expects a similar densification phase in 2025-2026 as operators look to add capacity closer to the end user.

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