Fixed Wireless Business

WisperTel

Don't let the tranquil name fool you. WisperTel is making it loud and clear that they intend to develop profitable, well-targeted wireless Internet service networks. Could their business plan be a screaming success for your ISP?

by Gerry Blackwell [October 15, 2002]

You have to admire the chutzpah of a four-month-old wireless Internet service provider (WISP) with approximately 30 paying customers offering its business plan and integrated technology solution as a franchise opportunity. That's what WisperTelecommunications, Inc. of Evergreen, Colo. is doing.

Founded by telecom industry veteran Barry Pier, the privately held company is a pure-play WISP offering business and residential high-speed Internet services in several bedroom communities in the foothills of the Rockies, just west of Denver. WisperTel is a 50-50 partnership between Pier, the firm's president and chief executive officer, and InterPlanetary Web Services (IPWS), a dial-up ISP in nearby Wheat Ridge, Colo.

The company uses a combination of 8.5-Mbps 2.4-GHz point-to-multipoint radios from Samsung Telecommunications America, LLP and Nokia's 2.4 GHz RoofTop Wireless Routing solution.

"We've had over 20 expressions of interest in franchises so far," says Pier. "The majority are from displaced telecom people who were able to get out with some money. They don't want to leave where they're living and they want to stay in telecom. The others were from dial-up ISPs."

Why would an entrepreneur want to buy a franchise from an unproved franchisor?

Well, nobody has actually gone so far as buying one from WisperTel yet, but it might not be such a terrible idea. Pier and his vice president of business development, Michael Brinks, have clearly done a fair amount of research and analysis and their approach has some unique and interesting features.

Four plays
Pier and Brinks figure there are essentially four opportunities in the fixed wireless space. The first was the commercial market Winstar and Teligent went after. It's showing signs it could revive, but clearly requires huge capital resources. The second is hotspots, which Pier characterizes as "a dance of elephants" because so many big, deep-pocketed companies are now entering it, making it difficult for start-ups to compete.

The third opportunity is providing service in rural areas, but Brinks says there are questions both about how easy it would be to get bandwidth to these communities and about the level of demand for services. The fourth is the opportunity WisperTel is pursuing—targeting unserved and under served bedroom communities around major population centers.

It's relatively easy to get bandwidth to these markets using wireless access—although the mountainous terrain west of Denver did present WisperTel with some challenges. The company was lucky. It was able to put towers on three mountain tops overlooking the communities its serving. Each just happens to have line of sight back to the IPWS POP in Wheat Ridge, which features an OC-12 (622.08 Mbps) connection to Qwest Communication's Internet backbone.

Each sectorized mountain top tower also has multiple omni-directional antennas and Samsung point-to-multipoint radios, which have a range of 10 to 15 miles. The Samsung radios provide direct links for business customers and also connect the AirHeads, the neighborhood hubs in a Nokia RoofTop network.

The three WisperTel towers create a kind of "triangulation" effect which yields 80-percent coverage of businesses in the targeted communities and also makes a self-healing ring configuration possible. The network currently covers about 1,000 square miles and a population of 340,000 homes and 31,000 businesses.

Unlike the rural opportunity, the demographics are right for broadband services—upscale, educated and tech-savvy residents and businesses—so demand is definitely strong.

In the communities, WisperTel is serving the only option for high-speed Internet service was satellite, which is expensive, doesn't support virtual private networks (VPNs) and has problems with latency. Dial-up access in the region is typically sub-28-Kbps.

"There is tremendous pent-up demand," Pier says. "We already have 250 held orders now. We've only been operating since May and until 30 days ago, we were more or less in stealth mode."

The residential service sells for $49.95 for 256 Kbps or $74.95 for 512 Kbps. So strong is the demand, that where the residential service isn't available yet because WisperTel hasn't deployed the Nokia technology, some homeowners are taking the business service—at about twice the price. "And they're smiling," Pier says.

Furthermore, WisperTel could remain the only viable option for some time to come. The cable and telephone companies face significant costs to upgrade their infrastructure in these markets to offer DSL or cable modem service. But broadband rivals have no capital budget for such projects and Qwest has $126 billion in debt, Brinks notes.

Pier estimates it will be three years before any wireline competitor is in a position to enter his markets, and by then he expects to have an unmovable foothold.

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