Adaptive Broadband Signs $100 Million Contract With I3S for Broadband Wireless Access Equipment; Contract Signals Beginning Of New Wireless Broadband Industry
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 27, 1999--Adaptive Broadband(TM) Corporation (Nasdaq:ADAP) announced today it has signed a contract valued initially at $100-million over five years to sell AB-Access(TM) broadband wireless service equipment to I3S, Inc., the Irving, Texas, high-speed data services provider.
AB-Access provides Internet access at 25 megabits per second, a speed up to 400 times faster than dial-up service over a 56K modem.
"This contract initiates the wireless broadband marketplace for all practical purposes. It's the largest single contract of its type in the world to date, and signals the start of a whole new industry for broadband wireless communications," said Frederick D. Lawrence, chairman and chief executive officer of Adaptive Broadband.
AB-Access will initially be deployed in the unlicensed U-NII (National Information Infrastructure) band, which Adaptive Broadband cites as instrumental in meeting the demand for affordable, ultra high speed Internet access. AB-Access will allow users to download full-streaming video, use real-time video conferencing and surf the Internet -- all at the same time over a single connection.
I3S contracts with owners of REITs (real estate investment trusts) and other on property service providers to provide broadband Internet access to multi-tenant residential buildings nationwide. The exact number of AB-Access units purchased under terms of the contract was not revealed, but is in the six-figure range, with I3S having the option to increase that number. Commercial deployment of the AB-Access broadband wireless solution at I3S-served MDU properties will begin in October. Once fully deployed, the I3S national broadband IP network will reach from 20 to 30 million residences in over 48 major metropolitan areas throughout the U.S.
"We chose Adaptive Broadband as a strategic partner because of its focus on leading-edge broadband wireless solutions," said Jim Price, chairman and chief executive officer of I3S. "We made an exhaustive study of all alternatives, and AB-Access was the only technology available that met all of our requirements in speed, bandwidth management, flexibility and price."
I3S will work with Adaptive Broadband to develop the U.S. market for both fixed and portable applications of AB-Access. Adaptive Broadband is currently developing a family of portable AB-Access products that will allow users high-speed, wireless connections to the Internet from laptop computers and other mobile devices. The first of these products is planned for year 2000.
A Vote Of Confidence
"I3S is one of the up-and-coming stars in the delivery of high speed Internet access to consumers in multiple dwelling units," said Brian Adamik, senior vice president with The Yankee Group, Boston. "Their selection of Adaptive Broadband's technology is a strong vote of confidence by a company that understands the Internet as well as anyone."
Battle for the "Last Mile"
According to Lawrence, this is the largest sale in the company's history. The first commercial application of AB-Access was made earlier this year, signifying the company's new focus on end-to-end broadband wireless solutions. "Just as significant, this is the industry's largest-ever sale of wireless broadband technology to an ISP," Lawrence said. "That sends a clear message to the telecommunications industry that the battle is on for the 'last mile' -- that stretch from the long-distance network to individual homes and businesses that has become a bottleneck for Internet traffic."
"As a leading provider of broadband data services for the residential multi-family industry and other emerging data communications partners, such as electric utilities, I3S needs an array of 'last mile' high speed data solutions to deliver our Broadband NOW!(TM) high speed data service," said Matt Hutchins, president of I3S. "The AB-Access wireless solutions is a perfect 'last mile' fit to allow our BroadbandNOW!(TM) service to become the 'first mile' gateway for our customers' high speed Internet access experience."
For nearly 20 years, industry experts have debated the merits of various alternatives for last-mile high-speed connectivity, including ISDN (integrated services digital network), xDSL (digital subscriber line) and cable modems. "But as advocates of wired solutions have debated, new wireless networks have emerged," Lawrence said. "Wireless solutions provide the benefit of rapid provisioning and relatively low cost -- important factors as the industry seeks to keep pace with growing demand for Internet access that's both fast and affordable."
During the coming five years, it is projected that up to 20 million homes and businesses across the nation will subscribe to high-speed data services, defined as 128 kilobits per second and faster, with the initial wave of this demand being driven by small to medium-sized businesses and telecommuters. "While that's just a percentage of all potential users, it shows there is significant pent-up demand for high-speed Internet access," Lawrence said. "And within this market, wireless broadband alternatives are very attractive."
Data Traffic Growth Builds Demand For Broadband Wireless
The commercial emergence of broadband wireless technology comes at a time when data traffic has surpassed voice traffic in volume. Providers have been responding to this change by moving from dedicated circuit-based networks to packet-based network infrastructures. These packet-based networks offer providers an efficient way to supply Internet, data, video and multimedia applications over the same infrastructure -- but they require high transmission rates and superior bandwidth management. Adaptive Broadband's AB-Access product provides advantages over competitive alternatives in both respects. Furthermore, the patent-pending design of its MAC software layer provides carriers with an instant provisioning capability and customers with portability for Internet and other data transmission needs.
Additionally, Adaptive Broadband is working to develop higher data rates -- from 25 up to 100 megabits per second, which will allow carriers to add more users without compromising their throughput capability.
Lawrence said Adaptive Broadband projects the global market for value-added broadband wireless communication will reach $100-billion. He bases that projection on Adaptive Broadband's unique vantage point from closely working with U.S. long-distance carriers, RBOCs (regional Bell operating companies), many CLECs (competitive local exchange carriers) and ISPs, as well as international carriers.
"Granted, that's a huge market," Lawrence said. "But it's a global market. And compared to the $12-trillion local loop market that exists globally, it's just a small slice of the pie. The opportunities for value-added broadband will start right here at home. We believe that fully one-half of the market emerging within the next two years will be within this country."
Wireless broadband will most universally meet end users' needs for affordable, high-speed Internet access because it can be instantly provisioned, it is most portable and ultimately mobile, and it has attractive pricing. For carriers, broadband wireless can be rapidly deployed, it is the least expensive to build out, migrate and upgrade, it provides the opportunity to combine products and services, and it provides the best opportunity for near-term, universal penetration.
Greater Opportunities Now in the U-NII Band
AB-Access is initially being deployed on the U-NII band, which is free and allows for instant provisioning. These are huge benefits to emerging service providers seeking to claim their stake of the last mile by being first to market with a completely packet-based network that seamlessly converges Internet, data, and voice traffic over the same pipe. The FCC opened 300 megahertz of spectrum for U-NII devices in 1997, believing "this will facilitate rapid and inexpensive wireless access to information resources by educational institutions, business, industry and consumers."
Until now, the unlicensed U-NII band spectrum has been questioned for potential channel interference. But Adaptive Broadband has successfully addressed this issue with mitigation features built into the AB-Access Media Access Control (MAC) software.
A Family Platform: AB-Access at Any Frequency
This technology was engineered to work at any frequency from 2 to 42 GHz. Adaptive Broadband's first releases of AB-Access are for applications that use the 5 GHz (U-NII) and 2.5 GHz (MMDS) frequency bands. Other frequencies are currently under development.
Wireless Internet -- What Will It Look Like?
I3S will install AB-Access subscriber units -- each the size of a laptop computer -- on the side of multi-tenant apartment buildings. "The subscriber unit will interface with an I3S proprietary architecture called a Data Envelope to provide Internet service to all subscribers in the building," said Salvatore S. Benti, Adaptive Broadband senior vice president. "The base stations for this service will be located in most cases in the leasing office of the building, where they can be bundled with gas, electric and cable service. I3S can also install the base stations at their POPs (points of presence), where they can serve many properties and residences."
Convergence of Technology and Demand
"This is a watershed agreement," Lawrence said. "It hits in the 'sweet spot' of our business strategy, which is in the unlicensed U-NII, MMDS and other frequencies under 6 GHz. And while that's naturally gratifying, it also validates that there is an emerging wireless broadband market for technologies using these unlicensed frequencies."
"This contract with I3S is unique in many ways," Benti added. "It will result in the largest-ever deployment of AB-Access. And it's the first major residential application of this technology. The timing for this was right -- demand is converging with cost-effective technology. By using unlicensed spectrum, we are able to bring a product to market quickly and inexpensively."
Wireless Broadband Focus
In just two years, Adaptive Broadband has reinvented itself to take advantage of the opportunities it saw in the wireless broadband market. At that time the company sold its defense business and created a new strategy -- one committed to participating only in markets expected to grow at least 20 percent annually. Its portfolio of new products reflects this new strategic focus. In addition to AB-Access, Adaptive Broadband offers MCR CodeRunner(TM) and Twinstream(TM), digital replacements to analog technology for electronic news gathering; SpectraCast(TM) IP Transport, a family of multiplexers, gateways and receivers used to support satellite networks; and TransIT(TM), a wireless online transaction processing system.
Based in Irving, I3S (http://www.IS3.com) is a leading provider of broadband data services to residential communities across the nation, with more than 1.5-million multiple dwelling units (MDUs) and other potential subscriber passings currently under contract, nationwide. The company's consumer product, BroadbandNow!(TM), is a suite of high-speed Internet services offering subscribers a true, broadband experience including streaming video and CD quality audio. I3S is expanding its national private IP ATM network to deliver its BroadbandNow!(TM) Internet service in 30 major metropolitan markets in 1999. Since 1994, I3S has utilized Multiple Broadband Access Technologies, or mBAT(TM), including xDSL and cable modem technologies to deliver the BroadbandNow(TM) online service. The company is currently developing high-speed data solutions for the lodging and hospitality market, and providing high speed data services for emerging data communications partners, such as electric utilities. |
