Don't underrate the influence of small WiMAX players

A new report from analyst firm Maravedis [1] cautions us not to underestimate the influence other U.S. players besides Sprint and Clearwire will wield in the WiMAX market.

"The conventional wisdom is that there are only two operators in the US with a mobile BWA/WiMAX opportunity, namely, Sprint-Nextel and Clearwire," said Tim Sanders,  co-author of the report. "In terms of mobile BWA/WiMAX, they clearly have the best opportunity. However, our research indicates there is more opportunities for other service providers in both fixed/portable and mobile broadband wireless than previously thought."

According to this report, both licensed and unlicensed wireless ISPs will benefit the most from the short term opportunities with BWA/WiMAX. This will not generate massive adoption but will contribute to building credibility of the WiMAX business case. For WISPs, a fixed and/or portable application with strong service models, integrated back-office technologies, and value-added services is a powerful enough proposition to go to market. The "tipping point" for greater WiMAX adoption will likely be in 2009 or 2010.

To wit, companies such as Towerstream and MetroBridge are both targeting that sweet spot in the high-speed business market: that high-speed gap between ADSL and fiber. Traditional fixed-line service has a gap between 4 megabit services and 45 megabit services. Towerstream and MetroBridge, which both are using pre-WiMAX solutions today, use the flexibility of wireless to offer speeds in the range of 10 megabits. Such a strategy creates an ARPU of about $500.

Towerstream currently offers service in eight markets with plans to expand to 20 in about a year. MetroBridge, which operates in the 2.5 GHz and 5 GHz bands, is growing through acquisitions. It recently acquired Utah Broadband for $5.4 million and has operations in Vancouver and Phoenix.

Dorian Banks, president of MetroBridge, estimates some 1500 independent WISPs exist in the U.S. market with about 300 residing in metropolitan areas. The company's goal is to test these companies out and see which ones would be interested in joining, Banks said. Most of these WISPs average about $500,000 in revenue and have hit a wall in not understanding how to market it. MetroBridge can step in by acquiring these players for a cash-stock deal and providing them with the capex, lease-lines and know-how to grow the market.

Meanwhile, mobile WiMAX rolled out in Madison, Wis., last week, and NextPhase Wireless announced the FCC approved its application for a nationwide license [2] to provide WiMAX wireless services in the newly released 3.65 GHz band (3650-3700 MHz).

TDS Telecommunications, owned by Telephone and Systems Inc., is providing VoIP and broadband access to some 65,000 people in the Madison area during the initial stages of rollout. As for NextPhase, President and CEO Robert Ford said the company plans to offer a portfolio of business-grade broadband services, much like Towerstream and MetroBridge. NextPhase is combining the new license with its recently acquired LMDS spectrum in certain markets across the U.S.

2008 should be an interesting time to watch some creative WiMAX business plans come to fruition.--Lynnette [3]