Fixed Wireless Providers

Downturn hits segment hard, leaves some unhinged

Hopes once were high for fixed broadband wireless, technology that uses antennas instead of wires to deliver high-speed services, until the segment was ravaged by the market carnage that has devastated competitive telecom providers.

IDC had predicted 65 percent annual growth in domestic fixed broadband revenue, rising from $800 million in 1999 to $7.4 billion in 2003. Since that forecast, three operators — Advanced Radio Telecom, Teligent and Winstar Communications — have filed for bankruptcy protection. XO Communications stock value has been floating at less than $5 per share since early April.

The Multichannel Multipoint Distribution Service segment, with players such as Nucentrix Broadband Networks, Sprint and WorldCom, is also struggling. These companies, like their colleagues mentioned above, are waiting for cheaper and more efficient technology before they roll out service aggressively. They also face losing their spectrum, as the Federal Communications Commission considers rescinding it and offering it instead to mobile wireless players for next-generation services.

Fixed wireless operators, like other competitive providers, have been hurt by the market downturn, as investors shy away from supporting companies that may not see profits for years. Fixed wireless proponents say their technology can deliver broadband connections at a fraction of the cost of wireline alternatives. However, most operators have sought to build extensive nationwide networks quickly, a proposition that requires substantial cash and time. Judging from the fates of ART, Teligent and Winstar, investors are growing less willing to wait.