INDUSTRY TOUTS FIXED WIRELESS PROSPECTS BUT CUTS EXPECTATIONS

Participants agreed broadband offerings would be key to growth of fixed wireless in both Latin America and Europe, although there wasn’t consensus on exact shape that product mixes would take as more fixed wireless systems started. “Wireless is not going to come into Europe and push everything else out,” said Stephen Lowe, product development dir., Telewest, and chmn., Broadband Wireless Assn., European counterpart to WCA: “People are looking to push it with other technologies to get broadband out there.” He also stressed that speed of residential offerings was less important than always-on feature in Europe, where customers still were used to paying per-min. rates and could be wooed with monthly one-rate plans.

Primary voice lines provided through fixed wireless connections will continue to be “killer app” for revenue in next few years, said Dave Gibbons, AT&T Fixed Wireless Services vp- chief architect: “There isn’t enough revenue being generated out of broadband data today… Second-line voice is not a proven business model. So primary line voice is our target.” Average revenue per unit per month generated from voice is larger than for any other single service, he said, estimating AT&T receives about $60 per month from its fixed wireless customers for voice services. “For that, we give them a few kilobits of bandwidth one or two times a day,” he said. For broadband data, customers get access to multimegabit pipes “as much as they want, for about 50% of the revenue,” he said: “However, the technology challenges for equipment makers and operators to get to that revenue are really significant.” Those include offering required landline services such as Enhanced 911 and toll-quality voice. AT&T Wireless has trial in Ft. Worth-Dallas area and as rollout continues plans to have 100,000 subscribers by year-end, he said. Half of company’s fixed wireless customers take only voice service, he said, and big attraction is free intraLATA calling between Tex. cities for which RBOC charges 20 cents per min. In other areas, while carrier now is using existing switches for voice traffic, it will begin voice- over-IP in mid-2002 to help reduce network costs, Gibbons said.

“Where is fixed wireless success? That question is being asked all around,” Medeisis said, noting markets and technology both generally seem ready for services. While Western European markets are shaped by factors such as relatively high costs that customers are willing to pay, in central and eastern Europe “the picture is less clear,” he said. Those markets have less teledensity, consumer pockets that aren’t as deep and in some cases monopoly incumbent retain control over fixed wireless, Medeisis said. Monopoly protections are set to end beginning next year and ranging up to 2013 depending on particular country. In that region, “the broadband services market is not yet mature,” he said.

One area of apparent growing interest for deploying fixed wireless in Europe is 2.4 GHz band, which ITU has designated as unlicensed spectrum. “Most countries allow or at least don’t forbid this,” he said, and some impose notification requirements if services are being started in band. One drawback to using bands is that operation can be done only on nonprotected basis, Medeisis said. In U.K., that unlicensed spectrum has drawn keen interest of educators and health care providers who see it as inexpensive means of deploying local area networks, said Lowe, who is member of U.K. Spectrum Management Advisory Committee. “We have been having some discussions about how we will stop” such communities from using spectrum, he said of govt. advisory panel. Concern is that growing use of band for commercial wireless applications will cause interference for such nonprofit use in future, he told us after panel discussion. “What we have to do is find another band,” he said. He said he had bought 2.4 GHz wireless phone during his trip because such units weren’t yet widely available in U.K.

Sagging economy has made need for standards and interoperability even more important, panelists said. On one hand, economic downturn has created opening for fixed wireless broadband solutions as DSL providers fall on hard times, several participants said. Financial uncertainty that makes standardization essential for driving down equipment costs was theme of several panel discussions here Sun. Among standards in development that fixed wireless operators are monitoring is 802.16.3, under way at IEEE and set for publication next year, although some have speculated here that completion could be further off.

Numerous fixed wireless licensing programs are moving ahead in Europe, including plans for 24 GHz in Sweden, 3 GHz in Greece and 10 GHz in Denmark, Medeisis said. He and others said tendency was away from auctions to focus more on beauty contests, which make licensing decisions based on business plans. Regulators planning beauty contests are paying more attention to financial aspects of operator plans, not just technology, said Nicky Sutton, dir., U.K.’s Invention Mktg. “Regulators are being quite tolerant of the lack of buildout,” she said. Leeway in some cases is being provided for operators who demonstrate they are serious about starting services and need additional time, she said. In general, “very few licenses are being returned” to govts., despite delays, she said.