July 30 (Bloomberg) -- After an almost three-year delay, work is set to begin on a $200 million plan to bring mobile-phone and Wi-Fi service to New York’s subway stations.
The project was rejuvenated after the group that won the contract secured new financing from an Australian mobile-infrastructure operator, said Kevin Ortiz, a spokesman for New York City Transit.
As part of the deal, Broadcast Australia took a majority stake in Transit Wireless LLC, the group of wireless and construction companies that was awarded the subway contract in 2007 and promised New York City Transit about $46 million over 10 years. The system will give New York’s commuters a service people in Singapore, Berlin and Tokyo have had for years.
“We’ve been scanning for opportunities like this one,” said Chris Jaeger, managing director of international business for Broadcast Australia. “The project fits very neatly with our business aspirations.” Broadcast Australia’s subsidiaries include Radio Frequency Engineering Ltd., which oversaw the wireless retrofitting of Hong Kong’s subway system.
Work on the New York project stalled before a single station was outfitted as Transit Wireless ran into financing troubles during the recession. Ortiz said New York City Transit gave Transit Wireless the go-ahead this month because of Broadcast Australia’s financial commitment.
Under the accord, Transit Wireless was given two years to wire six subterranean stations near 14th Street on Manhattan’s West Side to transmit mobile-phone signals to passengers on the platform. It was afforded as many as four more years to complete the remaining 271 underground stations.
Charging Verizon, AT&T
Transit Wireless will begin installing smoke detector-size antennas in six stations within the next two months, said Alex Mashinsky, chief executive officer of Q-Wireless Inc., one of the companies participating in the group. Stations could be completed at a rate of 10 to 15 per month, he said.
The project will cost about $200 million to complete, not including the $46 million Transit Wireless will have to pay the transit authority, Mashinsky said.
Transit Wireless has already completed much of the planning work, including blueprints and surveying work, said Jaeger.
Once the project is done, riders will have mobile service on the platform, mezzanines and portions of the tunnels, Jaeger said. Carriers such as AT&T Inc., Verizon Wireless and Sprint Nextel Corp. would pay Transit Wireless to use its network.
The first six stations include those for several trains along 14th Street at Sixth, Seventh and Eighth Avenues and at 23rd Street and Eighth Avenue, Ortiz said.
The revenue from the project would come at a welcome time for New York. The Metropolitan Transportation Authority, the New York state agency that runs the city’s subways, buses, commuter rails and some bridges and tunnels, has been cutting service and paring jobs to help close a budget gap of more than $900 million this year. The agency is considering a proposal to raise monthly subway and bus fares by at least $10 to help raise cash.
Jaeger declined to say what Chatswood, Australia-based Broadcast Australia’s financial or workforce commitments were.
The work on the subway system wouldn’t interfere with regular train service because it’s limited to the platforms, Jaeger said.
He said he hoped to arrange for Transit Wireless to wire the subway tunnels for full service too, though there are no immediate plans to do so.
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