The canal which once snaked Bradford’s woolly garments to the high seas has long since expired as an export link. But on its banks, at Shipley, the global trading of Yorkshire wares is alive and well thanks to a thriving technology maker.
In seven years Radio Designs has grown from zero to a 275-staffed international empire. It made the first filter technology to enable network sharing by major telecom companies and now supplies parts to the industry’s biggest global players.
In the year to March 2014, turnover surged from £14m to £22m and mobile phone users across the globe are now connected by the firm’s innovations and fixes.
The company, with additional facilities in India and China, makes wireless infrastructure ‘sharing solutions’ and RF filter systems. Put simply, they enable mobile phone networks to share infrastructure – as is the growing trend currently – and for new technologies to be overlaid onto existing infrastructure, as is required in the push for 4G capabilities.
“Last year around half of our business was abroad,” says Eric Hawthorn, the engineer turned entrepreneur who founded the business out of the ashes of redundancy in 2007.
“This year it’ll be more like 70%, but also our UK market isn’t shrinking. There are lots of other markets we haven’t even addressed yet, so we’re going to have a good year this year.”
Hawthorn’s confidence looks well placed given that current mobile industry trends are playing directly into Radio Design’s hands.
The roll out of 4G continues apace at home and abroad, and the Shipley firm has a lead role. At the same time capacity-boosting moves by major networks to share infrastructure are increasingly the norm. Hawthorn says: “We had two or three years where we were stuck at the same [turnover level] partly because our business was more dominated by the UK market. The UK was going through some changes, for example the 4G auctions [which dictated which operators would be involved in 4G]. Also O2 and Vodafone wanted to create a joint venture, which actually was quite good for us in the long term.
“But while they were deciding what they would do they had a sharp intake of breath and stopped spending on existing networks. So all those factors redoubled our focus on international markets.”
And that shift in focus has since paid dividends for the Scotsman’s business. His navigation of overseas markets has also benefitted local enterprise influencers, with Hawthorn joining the Leeds City Region’s Local Enterprise Partnership board earlier this year. This came after he spent three years on the LEP’s Business Innovation and Growth Panel, and helped spearhead the ‘We are International’ campaign.
We meet at the firm’s HQ which stands within a few feet of the Leeds Liverpool Canal.
We’re on a smart desk-filled floor well away from its manufacturing base down the canal at Salts Mill. But even here there’s a very faint whiff of solder in the air.
This, alongside the chunky metal components piled here and there, perhaps indicates a leadership team whose problem solving is not only done with pens and keyboards.
Certainly Hawthorn, in his company polo shirt, looks to be a boss whose technology engineering days haven’t been killed off by the onset of corporate power.
He struggles to remember exactly what started his interest in mobile communications. Perhaps it was formed from a jumble of experiences, he suggests, like playing with phones made from tin cans and string as a kid, a love of physics at school and later dalliances with ham radio.
A young Hawthorn even once took apart his Auntie’s prized radio to put it back together. The fact that it never worked again is a rare blemish on his rise as the world’s leading radio frequency engineer.
He graduated with an electronics and electrical engineering degree in Aberdeen in 1984 – a time when even breezeblock-sized car phones were in their infancy.
Resisting the pull of engineering work in Aberdeen’s offshore sector, save for a summer assignment developing underwater communications for divers, he took a job in the avionics division of electronics plc Plessey in Havant, on the South coast.
He spent two years working on defence-related “radio frequency stuff” for use on fighter jets. It was an interesting time, he says, during which he “truly learned” how to be an engineer.
But Hawthorn was troubled by the nature of defence technology development in that “after years of research a project could be cancelled at the stroke of a pen in Whitehall”.
He moved within Plessey onto developing a pioneering system of communications called Transparent Tone-In Band, which was aimed at replacing FM radios in business fleets and taxis.
His Plessey days also took in work to improve radio links between RAF bases. In a sector which advances quickly from one breakthrough to the next, however, takeovers by rivals were never far away. And so, with a consortium of giants preparing a bid for Plessey, Hawthorn sensed trouble and fled to Ottawa, Canada, to join Bell Northern (which later became part of Nortel).
The company was embroiled in something of a space race to pioneer the infrastructure that would facilitate the looming mobile phone boom in North America. It was a war between two communications systems each vying to become the first digital cellular standard in a potentially vast market.
But the battleground for Hawthorn was not in white-coated sterility of technology labs, but in the dusty underbelly of urban America.
“We were taking demo equipment out on field trials and setting up trial networks for customers. We’d go round in a big truck with our mobile radio. On one occasion we set up a route in Dallas and put equipment in big Portakabins under the freeway with an armed guard, chainmail fence and chickens outside.”
The hard yards paid off and Hawthorn’s camp won the contest.
“When I started out in Canada, Nortel wasn’t into mobile phone infrastructure at all but then it grew to be a multi-billion dollar business for the company,” he says.
Looking back to that battle of twin technologies, Hawthorn believes a current – if less game-changing – equivalent can be seen in the fight to take 4G connectivity forward.
While 3G made it possible to access the internet more effectively through mobile phones, the fourth generation of mobile telecoms technology has brought with it significantly faster web surfing and higher download speeds. So where next?
Hawthorn says: “5G is still a theory at the moment but there are companies investing heavily in it and there could be another battle in terms of different companies with vested interests trying to show that their way of doing it is the best. It might be five or 10 years round the corner, as there’s still a lot to come from 4G, and it may require fundamental changes to the whole network design.”
But does the mass market really need further cranking up of internet velocity on mobile phones? “When 3G first started people asked ‘what’s the point in that?’ But I don’t think anyone with a smart phone asks that anymore,” he says.
After his Canadian posting, Hawthorn was approached by a US firm to head up a team working on amplifier products and technology.
The Boston giant M/A-COM enlisted him to the helm of a fast-growing start-up division at a time when other sectors within the group were declining and cutting staff.
It was here the path emerged which would take him to Yorkshire, and entrepreneurialism.
Through a joint venture, his employer was linked to Filtronic, the Shipley electronics empire. He proved a good fit with the group in his involvement in the joint venture and eventually was appointed as Filtronic’s global engineering director.
“At the time they were focusing radio frequency filter technology and developing products for and to the specifications of the big OEMs [original equipment manufacturers] like Nokia, Erikson, Siemens, AT&T and Motorola. So we ended up supplying to all of the major players in the cellular comms world and became the biggest merchant supplier of filter technology into these companies.
“For the first year I was spending two weeks in the US, two in the UK, going backwards and forwards. We then acquired a company in Finland so spent a lot of time there as well.
“I was also quite customer facing so we would spend a lot of time promoting our technology and working with them to get us designed into whatever was coming next. You’re always working with R&D teams to see what they’re developing and how we can be involved in it.
When it came to the filter part, they wanted to make it smaller and cheaper, with the same performance as before, but at the same time new frequencies kept coming. So for example you might have done one for European GSM frequency, but because the customers were having success in places like India and China, they needed different regional variants of
After 11 years at Filtronic Hawthorn was made redundant when a US firm acquired the filter technology portion of the business, and shut down its UK engineering capacity.
But he had been planning his own enterprise for some time, having second guessed the American group’s intentions. He left Filtronic on a Friday in the summer of 2007 and the very next Monday, Radio Design was born.
He took 10 of “absolutely the best of the best” colleagues from his Filtronic days, while investment came from his brother Doug’s Scottish company Trac International Ltd, an engineering services provider.
But getting the filter technology to market as a networking sharing solution was a tough sell.
“To begin with, in spite of all the history and relationships we’d had with these big OEMs, they were saying ‘we know you’re a good team but there are only 11 of you and you have no credibility, so we can’t pin our future on you’.” A breakthrough was made when T Mobile expressed its intention to share its network with fellow mobile operator Three.
“They hadn’t worked out the technology they were going to use to share the antennae. So we came up with a customised product bespoke to their requirement and within four weeks had developed a prototype. Since then we’ve shipped over 40,000 of them.”
More business came when other operators – including O2 and Vodafone – saw the benefits of sharing networks. And overseas demand from new and existing customers also grew.
Like Hawthorn’s shrewd anticipation of the network sharing trend, he spotted another foreboding challenge for his customers that his team could solve. He found opportunity in the fallout from the years of fractious takeovers in tech land over recent decades, and the general breakneck pace of change that envelops the sector. Since many manufacturing giants had been felled by their inability to compete, and others crushed by the wheels of acquisition, the components they built were no longer backed up by maintenance and repair services.
“There was a situation where companies who were supplying lots of equipment into the OEMs would acquire other companies and then they’d disappear,” says Hawthorn.
“So it was getting more difficult for firms like Nokia to support equipment they’d bought from third parties. They’d send it back to the original manufacturer but as a lot disappeared that was getting harder and harder.”
The solution was Radio Design’s repair service which now has operations in China and India, as well as Yorkshire, and contributes around 15% of overall turnover.
“It started with us repairing filter systems but it’s rapidly grown into all sorts of things to do with base stations [a key component of mobile comms infrastructure]. We set up in India at the end of 2008. Our initial customers had previously had to ship products for repair to other parts of the world and then back into India, which was expensive.”
But India is not restricted to repairs for Radio Design and Hawthorn had other motivations for setting his flag there.
“In my Filtronic days I had a lot of experience in China and I had seen it develop very rapidly and starting to become more expensive and more heavily regulated, with only three operators that were all government owned.
“India had something like 15 different mobile operators at the time, a rapidly growing population, and is generally a very challenging market for the mobile operators to make money in. Today the average revenue per user for a handset is something like £1.50 to £2 a month – so you need a lot of customers to make money. So I thought that’s got to be a good market for network sharing.”
While the repairs business has thrived in India, Radio Design’s pursuit of product sales there is a slow-burner, admits Hawthorn. But the success on that front is moving ever closer.
India is a tricky market for British firms to crack in any industry. But alongside the usual red tape, Radio Design has also had to contend with a tumultuous period of change.
Hawthorn says: “India’s a place where it takes a long time to develop relationships and grow business particularly when the idea of sharing networks was completely foreign to potential customers. But there have also been all sorts of scandals about how the spectrum’s been allocated to operators.”
The ‘2G spectrum scam’ involved politicians and government officials illegally issuing licenses to private telecoms players at throwaway prices and culminated in all licenses being withdrawn and re-distributed under a new auction.
“There has been a lot of change and shakeup in the Indian market and that’s created a lot of instability. But that’s all settled down now and there are less operators and a number of bigger players that are emerging who are recognising the value of sharing infrastructure.”
In this new landscape, Radio Design’s bid for product-based work is paying off.
Indus Towers, a joint-venture which is the world’s largest telecom tower company, is interested in using Radio Design’s technology to share infrastructure on its sites.
“The more tenants they can get on site the more cost-effective it is for everybody. But it’s been a long process of educating that market and demonstrating that our products actually work there. But we’re now just setting up our own manufacturing base in India. We’ve been supplying products in small numbers there and have probably supplied to every operating and tower company in India. There’s still lots to do but the fact that there’s more stability there bodes well. Also there’s pressure on them to roll out 4G now, which suits us.”
Currently the Indian market is worth around £1m-a-year in turnover to the group, with China generating around £750,000 – but Hawthorn expects both to grow quickly once products begin to take flight.
Beyond these vast Asian markets, Radio Design has a strong presence in Europe covering “at least 10” countries in eastern Europe and several other territories including Spain, Belgium and France. Meanwhile, Africa, the Middle East and the Americas are targets.
“We’ve hired someone with experience in Africa and the Middle East. His contacts will get us off the ground and then as each market develops we’ll start to split them out.
“In terms of opening physical bases, what drives us is whether it makes sense to manufacture somewhere or just to offer a repairs service in a particular market. We’re looking at North America at the moment and at some point that will require a physical presence. So we’ll definitely be expanding into other countries as well as exporting.”
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