Broadband Fixed Wireless Is Dead

As operators continue to struggle, the Phoenix may yet rise from the ashes

Broadband fixed wireless supporters still have a lot of confidence in the technologys potential. Although independent providers continue to struggle for survival, incumbent carriers with powerful financial resources patiently wait for the market to bloom.

AT&T Wireless, Sprint and WorldCom have been cautiously deploying services that can deliver data and, in AT&Ts case, voice services over fixed wireless links. Because they have other business units to supplement their income, they can afford to deploy inefficient current-generation technology.

But the startups dont have that luxury. Companies such as Winstar Communications, which built a reputation as one of the strongest broadband fixed wireless providers and then filed for Chapter 11 bankruptcy protection, have been punished for trying to build too much too fast. "They need to go to one market, get a cash flow, then move on, instead of shooting for 50 markets by the end of the year," said Brian Modoff, a Deutsche Banc Alex. Brown senior analyst.

Even in Europe, the entrenched operators are the ones aggressively moving ahead. Spike Broadband Systems recently signed a deal to supply gear to the Danish mobile operator Sonofon, which has plans for a nationwide broadband fixed wireless network. Sonofon has a revenue stream that gives the operator the flexibility to try different services and can also market offerings to existing customers, said Christian Parrino, Spikes vice president of marketing.

Still, independent companies are convinced that there is tremendous demand for broadband services and that fixed wireless is the technology positioned to meet it. "Theres a robust need for efficiency-producing services," said Winstar Chairman and CEO Bill Rouhana. "What there isnt is the capital needed to provide those services."

"Our challenge is not funding," said Michael Keith, president of AT&T Fixed Wireless Services. AT&T has proven that the technology works and that the market exists, but now it faces the challenge of scaling the service across many markets.

Keith said operators targeting the high-end business market may be wasting their time. A wiser tack would be to target larger groups, such as residential users or small businesses, that may have fewer options for service.

"There might be 100,000 buildings that can justify 100-[megabit- per-second] connections and they are well-known," Keith said. The broadband wireless operators that target those buildings are "using spectrum to replicate other technologies, so theres no competitive advantage."