It seems pretty impressive if they managed to cover a third of the total POP's in 60 markets for only $100 million.
NextWave Surprises Industry
wirelessweek.com
By Mark Rockwell
February 18, 2002
Wireless Week
WASHINGTON—NextWave Telecom Inc. raised some eyebrows last week when it announced it has activated wireless networks in 60 of its markets across the country at a cost of $100 million.
"This is a significant step forward in the life of NextWave," said CEO and Chairman Allen Salmasi in a statement released Thursday. Salmasi was unavailable to answer questions about the activation because, according to NextWave spokesman Michael Wack, he was in Utah with his family attending the Olympics.
NextWave has good reason to make a splash with such an announcement. Not only is it caught up in a legal tangle and awaiting a decision from the Supreme Court on whether the court will hear the case between NextWave, the FCC and carriers that bid on NextWave's licenses in the January 2001 re-auction, it also is bound by FCC rules to build out networks in the markets it owns. Those facilities must be capable of supporting it commercially in each market or the carrier could lose the rights to the licenses in those markets. Because of those issues, analysts and potential competitors are skeptical.
In its statement, NextWave said the network "had been deployed to utilize advanced CDMA packet technology and is interconnected to the public data network and will provide users with Internet access on a fully mobile basis."
The 60 metropolitan areas where networks were activated include Washington, D.C.; Pittsburgh; Dayton and Columbus, Ohio; Charlotte, N.C.; and Minneapolis. The company is working with Lucent, its principal vendor, to roll out the network, Wack says. NextWave isn't claiming its network is as extensive as those of incumbent carriers, some of which have been in these markets for almost 20 years, Wack says. But, "we've made an initial deployment of facilities, we've activated those facilities, (i.e., they are operating), and we're doing customer trials. We're spending nearly $100 million dollars on this," he says. Equipment is being deployed on towers and rooftops in those markets, depending on availability and geography.
"The network is currently in customer trial phase, which means that we are testing all of the network elements, how they interact with each other, as well as monitoring customer usage patterns and the performance of the end-user devices," says Roy Berger, NextWave senior vice president of marketing.
The company can provide basic mobile Internet service in all 60 of the markets announced, Wack says. Customer trials are under way in 15 of those.
Analysts, however, are skeptical about the viability of the network activation. "They're trying to dig their heels in for positioning," says Jeff Kagan, a telecommunications analyst based in Atlanta.
"If NextWave's model is a carriers' carrier, where are the other carriers?" asks Iain Gillot of iGillot Research. "It's face-saving by NextWave." Gillot says NextWave is probably looking to sell itself to a larger carrier, possiblyVerizon Communications Inc., after the spectrum cap is lifted in 2003.
Potential competitors in some of NextWave's markets are skeptical as well. "It's shocking they would make a statement like that," says a manager for one potential competitor, who asked not to be identified. "We haven't heard of this." He characterized NextWave's announcement as ambiguous at best.
Still, NextWave officials maintain the company expects to build out its network by the end of April. Wack told Wireless Week in January that the network buildout would be designed to establish an initial commercial presence in each market that would satisfy the FCC's requirements.
The network activation could buy the company some time so it can cash in later, analysts say. Verizon wants licenses to fill in gaps in its coverage, says Gillot, but it can't buy all of NextWave without exceeding the spectrum cap in some markets. "Wait until 2003, when it can," he says. |
