Drivers for Mid-Market Fixed Wireless Access

ARTICLE

Drivers for Mid-Market Fixed Wireless Access

By Jeff Orr, Senior Analyst - Consumer Electronics
Contact the author at jeff@maravedis-bwa.com

A lack of uniform and widely available broadband Internet services keeps dial-up phone services a reality for many parts of the world. If sufficient and adequate telecommunications networks were in place, dial-up Internet access would no longer remain. India, Brazil and Russia are examples of countries dominated by dial-up users. Low-cost broadband wireless CPE is necessary to overcome the dearth of wired infrastructure and address entry-level price-points.

Developing countries are introducing Internet access on portable and mobile devices where the installed base of PCs is limited. All this pressure on access in more places for broadband Internet data is driving the need for high-speed, IP backhaul. Interviews with network operators suggest they are well aware of the changes that must occur towards the core of their network, though many have not taken action. Growth in broadband wireless network backhaul will occur, however our research suggests that it is still a guessing game when the major capacity increase expenditures will be triggered.

In addition to changes mandated in the operator’s network to support the increasing need for more and more data capacity, broadband wireless carriers are looking for ways to differentiate their service from being a basic pipe that carries IP traffic. One compelling area in the near-term is consumer value-added services. Services that have the most traction today include home networking, music downloads, online gaming, video on demand (VoD), and voice over IP (VoIP). In an effort to attract the power user and vertical market segments, wireless operators may also choose to optimize broadband wireless services for low-latency or higher data speeds compared to wireline competition.

Numerous opportunities for fixed wireless services exist in mid-markets. Mid-markets refer to the needs of communities sized between the metropolitan cities and rural townships. The greatest example of a mid-market broadband wireless provider is Clearwire USA, who established its business tackling markets in Tier 2 and Tier 3 cities that other broadband providers overlooked as costly. Today, Clearwire has nearly 500,000 BWA subscribers and the company is forming a joint venture with Sprint Nextel and a handful of U.S. cable operators to develop a nationwide mobile broadband network based on WiMAX technologies.

Responding to local market needs. Unlike national carriers and those with wired infrastructure, the mid-market needs are overlooked in favor of macro business model uniformity. Fixed wireless operators who reside in the market they serve are more likely to adapt to an evolving micro-market.
Spectrum flexibility. Mid-market providers also make a greater use of available spectrum choices. Some will choose to license or lease spectrum, while others will leverage license-exempt frequency bands.
Value-added services. Another clear differentiator in mid-markets is through value-added services. These range from: VoIP; secure Virtual Private Networks for access to corporate networks from remote sites; home networking; and responding quickly to scaling of capacity requirements.

A possible ally for broadband wireless service providers are national governments. Several government initiatives to reduce the digital divide are making gains for broadband wireless. Countries including Australia, South Korea, Taiwan, and the United States have programs in place today that broadband wireless operators can use to receive grants, loans, subsidies, and other incentives to launch or expand services to underserved customers. These government programs also extend to regulatory change. The European Commission, for example, has made a strong push for more flexible spectrum policies that introduce competition and provide access to radio frequency spectrum for mobile broadband services.

While many parts of the world remain reliant on dial-up Internet and lack sufficient broadband choice, the middle market opportunity for fixed wireless access exists today. BWA provides flexible capabilities for serving immediate mid-market needs. The technologies also scale well to support incremental capacity requirements as new applications are popularized. Sound business models are still necessary to realize mid-market requirements.

For more information you can contact the author: jeff@maravedis-bwa.com