Devoted to the wireless ISP industry, WISP Centric offers various features including industry news, a global initiatives resource, press releases, etc.
Start a WISP Knowledge Base - Are you interested in starting a wireless ISP but don't know where to start? Do you need help writing your business plan and could use some samples?
My apologies for being away for so long, the new job accompanied by tons of responsibilities take up just about all of my time even leaning in on my family time.
However, the last two weeks have been nothing short of a full scale assault on the traditional telecommunications industry and I felt I had to comment on this all - especially for any of you that might have missed any or all of this news. As usual, it is the cumulative effect of all the news stories and press releases along with the analysis that tells the entire story - not just one or two news stories at a time.
Let's start off with the 800lb gorilla in the room that nobody seems willing to discuss at any great length.
In Barcelona, Spain the 3GSM conference recently completed. Steve Ballmer (Microsoft) delivered a keynote address that quietly contained one of the most disruptive announcements that I can ever remember. To add to the beauty of this announcement, Mr. Ballmer chose a show that focuses more on the Cell Phone industry than anything else to announce that Microsoft would be releasing a product that was going to become the Cell Phone Providers' biggest challenge to date.
"Ballmer announced the upcoming availability of Office Communicator Mobile, a package that provides offers workers with mobile device capabilities that "go beyond just simple voice services."
Microsoft describes Communicator Mobile as a "unified communications client" that combines voice services, security-enhanced instant messaging (IM), presence awareness, and VoIP telephony. The client is said to offer a consistent experience across both PCs and smart mobile devices."
Office Communicator Mobile is going to turn the standard hand help PC into a more versatile tool that the usual off-the-shelf cell phone? Hmm, I wonder what application people will find to use that color LCD screen for?
"Nokia Corp. and Motorola Inc., the world’s biggest branded handset makers, both unveiled phones at a trade show here last week that switch between cellular coverage outdoors and cheap wireless Internet calling inside – all on a single phone number."
Well now, we know that Nokia and Motorola are incorporating WiFi into their phones, I wonder why. Oh right, this is so when you walk into a building your phone will automatically associate with your WiFi network and switch over to your VoIP account - and that is exactly what they are expected to say to any Cell Phone Provider that asks while keeping a straight face.
Of course, should you find yourself in a place that has ubiquitous WiFi coverage (like Philadelphia eventually may) your phone might not know it wasn't inside a building.
Now, if you live in just such a place (actually, I can't think of a city in the US right now that isn't planning some kind of WiFi roll out) and you never leave, maybe you don't even need a phone that does both Cell service and WiFi.
"The NETGEAR WiFi phone will make mobile Internet telephony a reality for Skype users. Unlike other devices that must connect with a PC, NETGEAR's Skype WiFi phone will work wherever a consumer is connected to a wireless Internet access point -- be that in a home, office, cafe, open public hotspot, or any open municipal wireless access point being deployed worldwide. The Skype experience remains the same, in that users can make free domestic and international calls, as well as host conference calls and chat, with other Skype users anywhere in the world, and to non-Skype users for a small fee. With this device, headphones or USB phones plugged into a laptop or PC are not required."
Ah well, I can't see this being much of a problem. Heck, most of the Cell Phone Providers are part of the resident ILECs anyway and they have landline revenues that will continue to rake in the money. I mean it's not like anyone is going to deploy a completely new telecommunications network any time in the near future, right?
"Strix Systems, the leader in high-performance wireless mesh networking, today announced that Accatel, Inc., an international carrier based in New York, has partnered with Nextel Telecom (Bangladesh) to deploy a citywide wireless mesh network in Chittagong, Bangladesh. The network is based on Strix's Access/One Network Outdoor Wireless System (OWS), a multi-radio, multi-channel, and multi-RF mesh solution that delivers the highest-capacity mesh system available today. The Strix network will provide phone and Internet service to residential and business customers in Chittagong.
Accatel is now installing 90 Strix OWS nodes for the initial network deployment, which will support 10,000 voice subscriber lines in an eight-square-mile area of Chittagong, a port city of 3.5 million people that is the commercial capital of Bangladesh."
Wait a minute! Something like this must cost a fortune, right?
Let's define "a fortune" as best we can.
Turning to Google I quickly found out that Strix pricing is not readily available on the Strix web site. I did manage to find a review on Strix's products dating from October 2005 that mentions pricing but I am assuming based on the article that the equipment reviewed was intended for indoor use. At that time the reviewer quoted pricing as ranging from $600 to $1,000 and I would assume this is in small quantities, again, for the indoor units.
If we were to double the price of the most expensive unit to account for the outdoor, hardened case and antennas (I have no way of knowing if this is accurate) and if we assume that at $2K/node price is at the quantity price, we can guess that the 90 nodes that are to be deployed in Bangladesh cost somewhere in the range of $200,000.
But wait, there's more!
We need to look at the cost of installing this infrastructure, connecting the equipment to power (in the case of Bangladesh there would need to be an allowance for alternative energy equipment added in) and there is a need for CPE (we'll let the customer pay for CPE, hey they pay for telephones, right?) we can realistically assume that this network could supply an eight mile section of an entire city (and approximately 10,000 telephone lines) for maybe $500,000!
Okay, so that's voice, so what? Most of the ILECs here are going after the "Triple Play" because they know that's where the money is.
In fact, this story is predicting that many of the traditional ISPs are going to have a tough time meeting the demand for large enough pipes to supply customers with video. Cell Phone companies are also scrambling to build out capacity on their networks so that their customers can surf the net on their cell phones not to mention watch TV on them.
Verizon is convinced that the triple play is why Fios is the way to go and is busily negotiating television rights for their Fios networks. Verizon is also building out Fios networks as fast as they can even though they are now clearly saying that they have no intention of building out the Fios network in many areas and may "prune" their network by roughly half in the future.
"Layered on top of the high-speed service is Verizon’s nascent FiOs TV service, which kicked off in Keller, TX last year. In Keller, FiOs TV has quickly obtained 20% penetration and Verizon will shortly launch FiOs TV in California, New York and Massachusetts, Seidenberg said.
The fiber-based network passes around three million homes today, and will pass an additional three million homes this year, and each following year, until Verizon hits 15 to 20 million homes passed, which will make the telco the third largest broadband provider behind Comcast and Time Warner. Seidenberg is more confident than ever that FiOs is the right strategy, and the internal numbers seem to back him up.
“All of our metrics are getting closer to our long-term targets. We’re very bullish about the fact that as we build this out we will get to a business model that works,” he said. (In terms of the 10 to 15 million homes in Verizon’s territory that aren’t projected to ever have FTTP available, Seidenberg said that by 2010, “we could make some judgments to prune [our] portfolio of access lines,” meaning that these territories are ripe for sale to another company.)"
I'm thinking that's got to hurt the guy who has the job of trying to convince investors that the traditional telephone, TV over Fios and cell phone networks are the place to invest in. Of course, as usual, I could be wrong.
FAIR USE NOTICE: In accordance with Title 17 U.S.C. Section 107,
the information in this website is distributed without profit to
those who have expressed a prior interest in receiving it for
research and educational purposes. The WISP Centric Group is making such
material
available in an effort to advance understanding of environmental,
political, human rights, economic, democracy, scientific, and
social justice issues, etc. The WISP Centric Group believes this
constitutes a 'fair
use' of copyrighted material as provided for in the US Copyright
Law.
Industry Commentary 
Advanced Search
