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Reporting period: 2017-02-01 to 2017-07-31

Luz Wavelabs is a private spanish R&D company whose objective is the design and manufacture of solutions in the photonic (optical) frequency ranges and especially in the Terahertz (THz) range. Luz Wavelabs’ core product is an ultra low-noise THz generator that makes use of photonic techniques. The signal quality offered by this generator exceeds by more than a million times the best existing commercial photonic solution.

At present, high-frequency signal generation is carried out by an electronic approach, by successive "up" conversion using multipliers and oscillators based on discrete components. The problems presented by this approach are low frequency stability, higher 3dB bandwidth of the generated frequency and higher noise, which are the most important parameters that characterize a signal generator.

Pure/ is a signal generation technology able to overcome the main limitations of both of these techniques, with a disruptive value proposition: it uses a combination of RF, photonics and high performance digital-analog electronics. LWL uses an optical comb (Nobel Prize in Physics 2005) as seed of the system to transfer the signal quality of an RF reference to any point of the THz spectrum with photonic techniques. Their optical combs are world record in energy efficiency, and the control electronics developed by LWL are 10x smaller, 5x cheaper and 100x better performance than competitors.

Optical comb technology has successfully passed laboratory tests with very good results, and is under miniaturization phase for large-scale integration in the industry. This method for the emission of EM waves is one of the most important disruptions in the technical world of the last years and will have several applications that superseed the current specifications offered by the systems in use. Also, THz technology will become one of the de facto standards for the new generation of 5G telephone in the next years.

For the evolution of pure/T technology, LWL has received the interest and support of important players in the sector of telecommunications, especially from the 5G stakeholders. With the grant received thanks to the SME Instrument Phase I, LWL has been performing an in depth Feasibility study to assess the practical and economic viability of the project in the market for wireless communications, having obtained very promising results, which have shown the viability of pure technology at a technical and economic level.
Luz Wavelabs has been responsible of the execution of the Feasibility Study as a single entity. During the last 6 months of Phase 1, LWL has carried out this study with the aim of defining in detail the market, characterizing threats and barriers for the evolution of the company, and making a detailed financial study.
The main tasks carried out during the project have been:

i) Task 1: Business model: A financial plan for pure/ has been performed to obtain a clear overview of the business performance in the future years. The intention of this task has been to understand the financial needs of the company regarding the performance on its operations and try to foresee the potential investments and new liabilities that would be needed for the business to get to the market on time, overcome any drawbacks and achieve the expected growth. The analysis has considered the following financial statements: Balance Statement, Income Statement, Cash Flow Statement, NPV calculation, IRR and payback. In this task, it has also been carried out a study of the company’s operations plan and an analysis of the Human Resources needs in a medium term.

ii) Task 2: PEST analysis: International economic factors will influence the development of 5G technology, given that it will have an impact on the global telecommunications industry by redefining work processes and changing the schemes of competitive economic advantages. For this reason, LWL has conducted an analysis that includes global economic changes that could influence the development of its product, and also includes macroeconomic changes in Spain, as LWL headquarters are located in Madrid.

iii) Task 3: SWOT analysis: Luz Wavelabs has performed a study to gather the strengths, weaknesses, opportunities and threats that could affect company’s performance in the next years.

iv) Task 4: RISK analysis: A contingency plan has been designed to help LWL to respond effectively to potential significant future events or situations that may happen. This process represents an alternative action plan to follow in case expected results fail to materialize.

v) Task 5: IPR strategy: In this task, an analysis of the intellectual property issues, both internal and external, that could affect LWL’s product has been performed

vi) Task 6: Marketing and communication plan: The last task of the project has been analyzing the potential market for pure/, sales and profitability objectives, pricing strategies, and marketing actions that could help improve the performance of the company.
According to the tasks carried out during the 6 months of the Phase 1, which have been described previously, it can be concluded that launching pure/Tto the market could be a very successful business. This period of time has been essential for specifying the most relevant elements of the business, defining risks and threats and proposing measures to reduce them, analysing market characteristics and discussing marketing and communication strategies. Summarizing:

*) The company has shown a very positive forecast evolution for the next five years, given that in this period it is estimated that the 5G technology will start its functioning. By that time, the company must have achieved a reasonable market acceptance for its product, or otherwise, adopt a decision among the contingency plans discussed previous sections.

*) With the PEST analysis, the company has identified environmental factors that could affect business performance, and has defined the actions to be performed, which can be summarised as entering the market as soon as possible to become the technology standard of 5G, and become a provider of one of the main players in the 5G sector.

*) The company has reached a deep understanding of their Strengths, Weaknesses, Oportunities and Threats. From this point, LWL will try to turn threats into strengths, and matching strengths with opportunities, to make the most of their power in the current marketplace and maximize chances of success of pure/.

*) This RISK analysis task has prepared the company not only for major events that could disrupt company’s activity, but also for smaller scale events related in the attempt to make contingency planning a normal part of the way business works.

*) Regarding IPR, an analysis to avoid violation of intellectual property LWL’s developments has been performed, outlining the importance of having an legal partner specialized on these issues.

*) With respect to the market characteristics and forecast sales, a deep study has been performed, concluding that LWL has a potential role to be one of he important players in the 5G equipment sector.

The grant awarded by the European Union to carry out this feasibility study has allowed Luz Wavelabs to confirm the viability of the pure/, so that the developments necessary for its evolution and subsequent placing on the market will continue. The company will also opt to Phase II of this SME Instrument, as the idea is very promising and can be ready to face market competition in the short term and seeks to disrupt the state of the art technology applied to 5G at a global level.