JDM:
As Barbara pointed out a few posts ago, blanket advertising
is a totally ineffective way of recruiting business customers.
Winstar has 3 types of customers: those for which it is
just a RBOC line reseller, which is essentially a money losing
proposition with tiny margins; those on switch, who use
locally RBOC copper, but go through a Winstar switch,
if I remember correctly, margins for this type of customer
are around 30%; finally, on net customers, who use wireless
for local access, and then go though a Winstar switch.
Margins for this last type of customer are around 70%.
So the idea is to get all the customers of the third type
you can get. Those live in buildings whose roofs have a
line of sight to one of Winstar hubs. Millenium is
directly targeted at customers of this type. The other marketing
device used by Winstar are breakfasts/visits to targeted
buildings (apparently this is Nate Kantor's favorite
marketing strategy). So, Winstar uses a targeted strategy.
Mass advertising would pick up primarily resale customers.
These are fine if they can be brought ultimately on switch
and then on net, but getting too many of these customers
at any one time is really undesirable.
I do not understand very well at what stage Teligent is
in its infrastructure building, i.e., how many switches
they have installed, and how many hubs. Switches can
take literally months to install and test, and hub
installation requires also a lot of time. Hopefully,
TGNT has already deployed enough infrastructure in
the cities where it is advertising, otherwise, their
advertising campaign will be disastrous (customers
waiting for months for a service they have been promised,
or customers calling to be told they cannot be serviced).
The only positive aspect of the Teligent and Winstar
advertising campaigns is that it makes customers aware
of broadband wireless. Also, to some extent, it is
important for Winstar and Teligent to develop a brand
awareness among consumers before the arrival of
third generation (narrowband) wireless services and
satellite services a few years from now.
Best regards,
Bernard Levy |
