Fixed Wireless Business

Wholesale Models for Broadband Wireless — continued

Keeping it simple
St. Petersburg, Fla.-based Progress Telecom traces its roots back to the old Carolina Power and Light Company (now Progress Energy). CP&L began deploying fiber, and eventually spun off a separate telecommunications company to service its markets in the Carolinas and Florida.

This past year, Progress Telecom bought an Orlando-based broadband wireless ISP headed by Carlos Olivardia, now General Manager of Fixed Wireless for Progress Telecom. Olivardia explained that Progress has looked at wireless service carefully.

"We look at broadband wireless like any other circuit we provision," said Olivardia. "Our whole business model is wholesale."

Olivardia explained that residential service just doesn't fit its model. Olivardia added that it's natural customers for broadband wireless would be independent ISPs or CLECs.

Progress offers wireless circuits at 1.5 Mbps, 3 Mbps, 5 Mbps, and 7 Mbps. Its fiber capacity can supply up to several gigabits per second.

The company uses a variety of equipment from Alcatel, Motorola, and Western Multiplex (Proxim), with Motorola Canopy its primary multipoint gear. The firm does use some licensed backhaul.

The fact that Progress uses unlicensed band technology (at least at the edge) gives its wireless links greater range and lower equipment cost. However, its wireless link bandwidth capacity won't scale to the level its fiber can. But since Progress Telecom is also a fiber provider, that is not a problem. It would simply provision large circuits via fiber. Of course, with unlicensed spectrum, interference could be a problem.

"Interference has not been an issue for us," said Olivardia. "Self-interference has been a slight problem."

Fiber is cheaper than many believe. "It can be surprising how close in costs a fiber link can be to a broadband wireless link," said Olivardia. "At some levels of service it makes sense to use fiber instead."

Progressive tools
Progress provides complete simple network management protocol (SNMP) tools for its customers to monitor connections.

The company prefers to provide the end-user installation for its clients' customers.

"We build templates and site surveys for each customer," said Olivardia. "Currently, we have this service in Orlando and soon will have it in Tampa, Fla."

The company also provisions fiber to the tower for wireless ISPs in some cases. In this model, it serves strictly as a bandwidth pipe provider.

Progress does not attempt to provide Tier 1 support or billing services to its clients' end-user customers.

Conclusion
The broadband wireless business is new. The oldest wireless internet providers have been providing narrowband since perhaps 1992, but fixed wireless broadband is a more recent phenomenon. Some believe new technologies like WiMAX will enable WISPs to serve more markets than ever before, but the technology will take time to mature. Broadband wireless is still a fragmented marketplace with competing proprietary standards.

Yet even in this nascent marketplace, firms in the broadband wireless space believe wholesale models already make sense. Unlike the monopolies with their cross subsidies, these companies need to make money from data business, and are therefore willing to work with partners.

Clearly, these companies have made some smart choices. They wisely avoided any residential approach, focusing instead on high-value business class offerings that generate much higher revenues. They chose market segments where potential wireless weaknesses (in the mass market) are actually strengths. For example, a truck roll to a high end business customer is a value added opportunity to cement a relationship. In the mass market (with low price points) it would be an untenable expense.

If these models prove viable in today's still fragmented and still somewhat expensive broadband wireless market, then new technologies, once proven, can only improve the fixed wireless broadband industry as a whole.

The future may be brighter than it seems.

—End

 

Wholesale Models for Broadband Wireless, page 1: Framing the challenge

Wholesale Models for Broadband Wireless, page 2: It's all about the partner

Wholesale Models for Broadband Wireless, page 3: Progress Telecom