Power line communications control system.

A team of developers is sitting quietly at Nisko's offices in Ramat Hahayal, making the last preparations for increasing our band width. No more ADSL solutions or algorithmic tricks. We're talking electricity here.

This is not the first time we've heard of the possibility of transmitting information via electricity grids. Israeli company Ituran announced a similar solution and roped in an investment from Microsoft. NAMS seems to be close to the desired result, but until its product was revealed at the CeBIT exhibition, the project was shrouded in secrecy.

Here is how it unfolded: Nisko, traded on the Tel Aviv stock exchange, was very active in the metering field, mainly for the electricity sector. It spent five to six years developing meters for remote data reading. The idea grew out of a cooperation venture with Siemens International, in which Nisko serves as an informal development center. Siemens liked what was being done, and decided to transfer more and more projects to Nisko.

Nisko liked being involved in more projects, and decided to announce its autonomy in the field. In December 1998, NAMS was founded. "We reached the decision that we could do more interesting things by ourselves," says company president and CEO Ron Gafni. Nisko alone has invested $10 million in development. The group launched a family of electricity metering products based on electromechanical methods about a year ago, which are already being sold. NAMS is a wholly owned subsidiary of the Nisko group.

NAMS' electricity meter is, in fact, a command and control station. It can measure data on the customer's electricity consumption, and by studying the pattern, allocate energy to him as required, and plan further appropriate allocation of electricity and infrastructure. It also enables the customer to choose his electricity supplier, and can even serve as an excellent solution in countries in which electricity fee collection is low, since it is capable of identifying electricity theft. Moreover, it can serve as a good alternative in places where electricity needs to be purchased (namely developing countries, but also in Britain where it is still necessary in some places to go to the post office and purchase a sort of key for a certain amount of electricity). NAMS' meter enables this to be done by smart card.

The company's meter is more expensive than others, but not significantly so, according to Gafni. Meters are read either by a wireless or land line mechanism; the data transmission is done by voltage wires at speeds of thousands of bytes per second. The company came to the conclusion during development work that it was possible to attain even higher speeds. The company is already on its way to 1 Mbps, and the distance to 10 Mbps is then short. After witnessing these speeds, the NAMS team understood that the electricity system could turn into a modem for the physical world.

"Globes": So you reached it almost by mistake?

Gafni: "Whoever believes that Newton invented his second law when the apple fell on his head will believe we arrived at it by chance."

NAMS decided to keep the discovery quiet and concentrate on existing ties with customers. Gafni: "We have very strong ties with energy companies. There's a great deal of de-regulation in the field, and hysteria for added value by the companies supplying energy. We offered them an automatic reading and measurement meter, and we can now offer them unlimited applications putting them in competition with communications companies. The marketing-financial power we offer them, I would say even political power, is huge. They will overturn the world in order to find solutions for standardization problems."

Among the applications Gafni mentions are: security systems, control of lighting, traffic lights, and industrial processes. For some reason, Gafni declines to mention the major application: Internet. The high-speed at which a NAMS electricity meter can transmit could turn the electricity system into the number one broadband platform.

Aren't giant communication companies trying to develop a similar product?

"Yes. Nortel invested a great deal of money in it, and then froze the program when it entered into dead-end technology."

Gafni is aware of the competition, but he says that competitors talk of chips. "Chips are not the problem; if they come up with the right chip, we'd be happy to examine its use in our system. We provide turn-key solutions and we already sit on the lines."

In the last quarter of the year, NAMS plans to launch a communications product at a speed of up to 100 Kbps. A few months afterwards, even higher speed products will be put on the market. Replacing equipment will not be necessary, it will be upgraded. Terminals will be sold for tens of dollars and the company will benefit from royalties on revenues.

In the meantime, the group plans to raise $6-8 million in a private placement from a strategic investor. Negotiations are already under way, and Gafni is not divulging any information. Reading between the lines, it could be Siemens with whom Nisko has had strategic ties for many years, but time will tell.

Published by Israel's Business Arena on 6 March, 2000