Wireless Gear Companies Seek New Channels

 
 
By eweek  |  Posted 2001-05-28 Email Print this article Print
 
 
 
 
 
 
 

Broadband wireless gear makers are setting their sights on different markets now that one fixed broadband wireless segment in the U.S. is quickly disappearing.

Broadband wireless gear makers are setting their sights on different markets now that one fixed broadband wireless segment in the U.S. is quickly disappearing.

Last week Teligent — the competitive access provider that uses fixed wireless technology — filed for bankruptcy, not long after its peers Winstar Communications and Advanced Radio Telecom did the same.

The bankruptcies leave smaller vendors, many of which sold gear to bigger names such as Lucent Technologies, struggling to stay afloat and seeking new niches. Theyve taken a big hit:

Ceragon Networks, which sells point-to-point radio equipment, is out $100,000 due to ARTs bankruptcy. Before entering into bankruptcy, Winstar made up about 40 percent of Ceragons business, estimates Yaser Moustafa, an analyst at Lehman Brothers Holdings.

Netro, a point-to-multipoint equipment supplier, lost its original equipment manufacturer agreement with Lucent, the company that accounted for 85 percent of its revenue in the first quarter of 2000.

Ensemble Communications, another point-to-multipoint vendor, also lost its Lucent business. Ensemble now anticipates reducing its dependence on OEM relationships, said Dave Twyver, president and CEO of Ensemble.

But many vendors believe they can switch gears to weather the storm. For example, Ceragon is moving into the market created in both the U.S. and Europe, where incumbent operators are beginning to turn to fixed wireless, said Shraga Katz, president and CEO of Ceragon.

In addition, mobile cellular operators have traditionally used fixed wireless to backhaul traffic from cell sites to switches. As operators. especially in Europe, invest in next-generation networks, they will need to build more backhaul capacity to accommodate increasing data traffic. Ceragon hopes to be a supplier, Katz said.

Ceragon also hopes to cater more to the enterprise market, which turns to fixed wireless for broadband access on corporate campuses.

Netro plans to continue to focus on international markets. "Europe is our largest market and always was," said Roni Floman, director of business development at Netro.

Ensemble claims to have been hurt less than others because it offers point-to-multipoint gear, which was not widely used by any of the bankrupt companies. Ensemble continues to focus on customers in Europe and the U.S. that take different approaches to the market than Winstar and Teligent did.

Despite the carnage in the fixed wireless space in the U.S., most believe the market will rebound. The vendors hope theyll still be around when that happens.

"Its a matter of survival. Whos burning through cash at what rate and who can weather the storm the best," said T.K. MacKay, a security analyst at Morningstar.

 
 
 
 
 
 
 
 
 
 
 

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