Sprint, MCI to push wireless Net services
By John Borland
Staff Writer, CNET News.com
December 1, 1999, 7:00 a.m. PT
Fresh from the biggest merger in history, Sprint and MCI WorldCom are setting up shop as high-speed Internet underdogs.
The two companies and a number of smaller firms are looking to link homes to the high-speed Internet over wireless connections. The companies aim to make a space in an established market dominated by broadband cable and digital subscriber line (DSL) services, both of which already claim hundreds of thousands of subscribers.
Wireless Net connections use a receiver dish attached to a home to receive both television and high-speed Internet data signals from remote antenna towers. In the few cities where wireless Net technology has been introduced, it is comparable in price to cable modem services.
Companies that are focused on so-called fixed wireless Net access say they are poised to take on telecommunications giants like AT&T and the Baby Bells that offer broadband services. And there is much at stake: Analysts estimate that the market for high-speed Net access in the United States is expected to climb to $8 billion by 2002.
Only a few thousand people nationwide currently subscribe to wireless Net services, and the technology is still struggling with some speed concerns. Yet a number of companies are jumping in with products that support the nascent technology. Cisco today plans to unveil further details of its wireless strategy, and equipment giants Nortel and Lucent are working on their own wireless Net technology.
"The real driver is that Sprint and MCI WorldCom are now saying they're serious about using [this technology]," said Christopher Whitely, an analyst with Insight Research, a telecommunications market research firm. "Clearly [companies like]Lucent and Nortel will try to address those needs."
Analysts say that once wireless Net access is deployed on a wide scale, it should prove a strong competitor to cable and DSL. In Phoenix, the most advanced wireless Net service has held its own against services from local phone carrier US West and Net-over-cable service Excite@Home. The high-profile brands of Sprint and MCI WorldCom should help grab the attention of consumers interested in high-speed services.
But this needs to happen quickly, analysts say.
"There is a time to market advantage here," Brooks said, noting that cable and DSL already have a significant lead, and that satellite-based services will likely hit the market in 2002. "If they wait, the competition might be too fierce for them."
The merger between Sprint and MCI WorldCom will now place all of their joint wireless properties under the same roof.
Earlier this year, the long distance rivals began bidding against each other to buy fixed wireless companies, looking at the technology as a potential way to combat AT&T's cable buying spree. In just a few months, the two companies had snapped up enough wireless spectrum to cover about 60 percent of U.S. households.
Together the firms have told analysts they jointly want to reach 30 markets by the end of next year. Sprint spokesman Robert Hoskins says the company plans to independently introduce high-speed wireless services in 10 to 20 markets by the end of 2000.
Sprint plans to stick with equipment it already has in operation in Phoenix, inherited from its purchase of fixed wireless provider People's Choice TV. The company claims more than 4,000 subscribers in the area, mostly residential users and small businesses, Hoskins said.
But some analysts say that Sprint is depending on a technology that may not be up to snuff. "They're using a relatively small company that's unlikely to scale," Jupiter Communications analyst Dylan Brooks said. "Whether they're able to deploy on a national level in large part is going to depend on getting adequate and technically sound equipment."
Enter the likes of Cisco, which plans to sell wireless Net equipment simple enough for consumers to install by next year. The networking equipment giant, along with rivals Nortel Networks and Lucent Technologies, have the scale to produce relatively inexpensive equipment needed to spread the services nationwide.
"There's no more hypothesizing on whether all these technologies will work," said Greg Raleigh, director of wireless engineering at Cisco and founder of the former Clarity Wireless.
Analysts say that investment in good equipment and new technology can bring this variety of fixed wireless technology nearly to the point where the cable TV networks are today. But genuine cable TV wires can also be upgraded substantially, likely leaving wireless capacity behind.
Most analysts expect the wireless services to be most popular in rural or other areas where DSL and cable modem services aren't available.
Jupiter Communications predicts that all wireless broadband technologies, including satellite services, will claim about 10 percent of the high-speed Net market by 2003.
"That's nothing to sneeze at," Brooks said. "But it's not revolutionary."
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