Fixed Wireless Remains Viable Broadband Option

Despite some high-profile problems at fixed wireless providers such as Winstar and Teligent, research by The Strategis Group found enormous potential for success in the market for fixed wireless Internet services.

From a relatively low base in 2001, The Strategis Group predicts that broadband wireless service revenues will climb to $6.3 billion by 2005 — representing a five-year total of more than $17 billion and compound annual growth of almost 60 percent.

“It’s inevitable that troubles at Winstar and Teligent — as the most visible players in the market– would reflect poorly on the whole industry,” said Peter Jarich, director of global broadband research at The Strategis Group. “The problem is that the spectrum they use, LMDS [definition], is only one aspect of U.S. fixed wireless. On the MMDS [definition] side, Sprint and WorldCom continue to make news and the unlicensed spectrum space just saw a major operator, Clearwire, pull in almost $100 million in new funding.”

LMDS and LMDS-based carriers won’t be going away anytime soon, according to the research. Driven by new operators, new technologies and an installed base of networks, millimeter-wave is expected to maintain its prominence, accounting for almost half of broadband wireless revenues in 2005. Many 28 GHz and 39 GHz licensees are still just preparing to launch networks and, at the same time, operators like E-Xpedient are shaking things up by using unlicensed 60 GHz networks to offer service at low prices.


U.S. Broadband Wireless Subscribers
LMDS, MMDS & Unlicensed Spectrum
Year 2001 2002 2003 2004 2005
Subscribers
(thousands)
410 1,185 2,385 3,875 5,405
Source: The Strategis Group

The fixed wireless access market in Europe is also set to take a large piece of the broadband pie, according to The Strategis Group. Due largely to a scarcity of viable broadband alternatives, the fixed wireless market in Europe will reach $8.6 billion in annual revenues by 2006. The business sector will remain the main revenue generator for fixed wireless operators for some time, as operators select high-revenue customers from urban business districts. The 15 main European markets will generate more than $6.2 billion in business service revenue in 2006, as opposed to $2.4 billion in residential service revenue.

A survey of ISPs by internet.com Corp. (the publisher of this site) found that 40 percent of the respondents plan to offer fixed wireless broadband access in the future. According to the report “The ISP Market: Challenges and Strategies for the Future,” not only does fixed wireless avoid last-mile bottlenecks that plague DSL and cable service, it also allows operators who do not have an existing customer base to build a network without paying interconnection fees, dig holes or lay cable.

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