[Upside: Waking Up to Fixed Wireless]
While the tech industry has been ogling AT&T's broadband strategy, it's just begun to take notice of something else in the air. Specifically, it's the growing popularity of broadband data delivery via "fixed" wireless technology.
Fixed wireless technology gets its name because its networks send data to a stationary point such as a rooftop antenna, not a mobile phone. This week, AT&T subsidiary Liberty Media announced plans to buy Associated Group Inc., the largest shareholder in fixed-wireless provider Teligent Inc.--a deal valued at $2.8 billion.
Clearly, this is a sign AT&T's broadband strategy won't live and die by cable alone. Especially because its competitors have also seen the wireless light.
Though dwarfed by AT&T's Teligent deal, telecom provider Qwest Communcations announced a similar deal this week when it took a $90 million stake in Advanced Radio Telecom Corp. Qwest joined Oak Investment Partners, MeriTech Capital Partners, Advent International, Columbia Capital, Accel Partners, Brentwood Venture Capital, Worldview Technology Partners, Bessemer Venture Partners and Adams Capital Management in an investment round that totaled $251 million in the fixed wireless provider.
Why all the movement in fixed wireless? Peter Jarich, a consultant with the Strategis Group, a Washington, D.C.-based telecom research firm, says, "It's all about the promise of bundling--[businesses and consumers] want one provider who can come in and provide everything. Wireless broadband provides firms an excellent way to deliver the last mile of Internet access."
Dodging RBOCs
No matter how they deliver the bandwidth to customers, Jarich says, companies such as AT&T, Sprint, MCI WorldCom and Qwest all want to avoid treading on the local telephone companies' turf. Hamid Akhavan, Teligent's director of engineering, says passing through such companies' backyards to get to business customers is both unpleasant and expensive for broadband service providers.
The same "avoid the local telcos at all costs" mentality is spreading among consumer broadband providers, too. In the past couple of months, Sprint has agreed to acquire wireless providers People's Choice TV Corp., Videotron USA, Transworld Telecommunications and American Telecasting Inc.
Jarich explains that as AT&T reaches customers through a cable connection, Sprint will use its Integrated On-demand Network (ION) service to get to customers through wireless connections.
The motivation is all too clear, says Jarich. "The consumer doesn't care how they get the bandwidth. They don't care if it's delivered via copper wire, fiber, radio waves, or transmitted using two cans and a string--they just want predictable, reliable service." Any wireless provider who can offer the kinds of services AT&T is plotting to unveil stands a chance to give Ma Cable a run for its money.
In the business market, Teligent's Akhavan says demand for fixed-wireless broadband services is clearly ahead of supply at this point. Though no one's yet made a profit offering such services, The Strategis Group predicts that fixed wireless revenues will reach $4.8 billion in 2003 and $10.3 billion by 2008. |
