Local startup Spotwave Wireless continues to chug along the track to profitability with a key deal struck last week in the U.S. and handful of layoffs on Thursday to keep the lid on costs.

The company, founded in May 2000, is developing the technology to improve wireless phone reception within large office buildings.

According to Sue Rutherford, director of marketing and communications, Spotwave has product in the hands of customers and is generating revenues.

"We're in a very strong position with carriers," she said, adding that the company is enjoying quarter over quarter revenue growth.

However, the privately-held firm remains tight-lipped about what kind of revenues it is seeing or when it expects to break through the all-important profit threshold.

On Sept. 23 Spotwave announced a deal with U.S. Cellular, a key player in the U.S. wireless market with four million customers in 25 states.

U.S. Cellular will use Spotwave's adaptive repeater to improve wireless reception in buildings of up to 100,000-square-feet.

"That certainly represents a significant move forward for us," Rutherford said.

While the company builds out its customer base, the focus is on keeping costs contained to stretch its bank account.

On Thursday the company cut five staff, three in Ottawa and two from its U.S. sales offices. The cuts reduce the overall headcount to 53.

"What we're really trying to do is make sure that every position in the company is driving toward revenues," she said.

To date Spotwave has received about $27 million in venture capital with the last round, worth $23.9 million, coming in January 2002.

"We continue to talk with investors," Rutherford said. "We haven't ruled out seeking additional financing."