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TWO FIRMS TAKE ADVANTAGE OF RF FINGERPRINTING OPPORTUNITIES

NEW YORK-Amid an expanding arsenal of competing fraud detection and prevention options, just two radio frequency fingerprinting companies have staked out a potentially lucrative niche in the analog cellular arena.

Cloning, the illegal interception and reuse of a legitimate cellular customer’s electronic information, will cost the industry an estimated $1 billion this year. This fact provides a growth opportunity for the two contenders in RF fingerprinting as a fraud prevention tool for analog systems. Corsair Communications Inc., a privately held company headquartered in Palo Alto, Calif., started selling its PhonePrint product in 1995. Cellular Technical Services Co., a public company headquartered in Seattle, began deploying its Blackbird Platform last year.

If the opportunity is so great, why then are there just two RF fingerprinting players? Frederick C. Moran, managing director of Furman Selz L.L.C., New York, offered this explanation: “(As recently as) a year ago, people were skeptical that RF fingerprinting would work, so only two companies spent the research and development money on it, and they now are uniquely positioned.”

RF fingerprinting compares in real time the unique radio frequency fingerprint of each cellular phone to subscriber information stored in a carrier’s database, and permits immediate cutoff of the call if the two don’t match. “RF fingerprinting has no impact on base station equipment and requires no changes to subscriber handsets,” said Corsair on its Web page.

Worldwide, there are an estimated 70,000 analog cell sites, of which about 30,000 are in the United States. At year-end 1996, only about 2,200 of those sites, all in this country, were equipped with RF fingerprinting from either Corsair or CTSC, but that number is expected to grow substantially this year, Moran said.

Domestically, the number of analog cell sites is growing at a rate of about 5 percent yearly, while the growth rate outside this country is averaging about 10 percent to 12 percent annually, he said. The modest but steady growth in the number of analog cell sites continues even as digital cellular and personal communications services go into operation. Moran compared the advent of digital cellular and PCS in wireless to the deployment of fiber optics in wireline, where fiber-optic cable has enhanced rather than replaced outright the existing copper wire transmission system.

“Although CTSC and Corsair provide similar products, the two companies have drifted toward two sides of the market,” said Moran of Furman Selz, a securities firm that is a market maker in CTSC stock. “CTSC has focused its Blackbird Platform on the `B-block’, or wireline operators, while Corsair has targeted its PhonePrint product toward `A-block’, or non-wireline operators.”

The two RF fingerprinting companies’ products aren’t now interoperable. However, a number of the major analog cellular carriers have their footprints in both blocks, including 360

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