Small MMDS players steal show
Despite Sprint's, MCI WorldCom's MMDS foray, remaining independents steamroll ahead
internettelephony.com
NANCY GOHRING
When anyone says multichannel multipoint distribution service these days,
Sprint and MCI WorldCom immediately come to mind. Nonetheless, a few
independent MMDS players are not only beating Sprint and MCI WorldCom to
market, they're beating other high-speed access alternatives such as DSL.
Worldwide Wireless Systems, an MMDS license owner in New England, and
Wireless First, an MMDS operator in Michigan, serve markets where ISDN is the
only other high-speed option. DSL hasn't reached those markets yet, and where
cable modem service is available, it reaches only residential customers.
Wireless First has been commercially offering two-way high-speed Internet
service since July 1999 and marketing it to small businesses.
"The first thing we went after was ISDN replacement," said Jeff Forrest, general
manager at Wireless First. About 80% of Wireless First's 60 customers switched
from ISDN, he said. "It's at least twice as fast for the same money or less."
Worldwide Wireless Systems is on the verge of introducing service to small
businesses, its first markets, and like Wireless First, may target the residential
market later.
The companies hope to bolster business by targeting bigger users who will pay
more, turning to residential users later when the small business market is
saturated and when each can invest more in customer service.
Each operator has been approached by Sprint or MCI WorldCom, which
expressed interest in buying them. Worldwide Wireless Systems and Wireless
First state similar reasons for why those deals failed.
"We think we're worth more," said Scott Wendel, CEO of Worldwide Wireless
Systems.
Sprint and MCI WorldCom purchased several MMDS players at low costs
because many MMDS players toiled and entered bankruptcy. "We struggled for
a long time but were able to keep our heads above water," Wendel
said. Because Worldwide Wireless Systems weathered the storm, Wendel
believes is worth more than its competitors. Worldwide Wireless Systems also
isn't interested in selling, instead focusing on developing the business and the
value of the company, Wendel said.
Sprint and MCI WorldCom also may not be that interested in the smaller markets
where these companies own licenses now. If the independent operators prove
that demand is high and customers exist in the smaller markets, Sprint and MCI
WorldCom may be attracted to them. "If the Sprint play is to become a CLEC
down the line, we could see them moving to the secondary markets," said Peter
Jarich, an analyst with The Strategis Group.
However, these small MMDS players are benefiting from the attention that Sprint
and MCI WorldCom have drawn to MMDS. A growing number of vendors are
developing MMDS products in hopes of winning contracts from the big players,
which has increased equipment options, driving innovation and hopefully
decreasing prices.
Wireless First originally used equipment designed for cable TV, adapting it to a
wireless data system. "When we got started, there was no other choice," Forrest
said. About five vendors recently contacted the company regarding its MMDS
products.
But Wireless First found it difficult to use evaluation equipment because the
vendors have been focused on catering to the larger players. Wireless First
envisions possibly using different technologies in its multiple headends. "At
some point, when the prices drop, maybe we can do something more exotic,"
Forrest said.
In the future, Wireless First hopes to implement different types of gear at the
headend and at customer sites to support three tiers of service. The equipment
essentially would self-regulate bandwidth, so Wireless First could serve
residential users, small and medium-sized businesses and ISPs or larger
customers on a wholesale basis. For now, Wireless First sells service at a
guaranteed 256 kb/s that can burst up. The operator can measure usage to
monitor how much bandwidth customers use. |
