<LMDS, is a proven product.>
Yes. What I mean to say is does the market agree? It seems that it was only a year ago and people were still questioning wireless broadband. One or 2 years ago, there were many projects that had great promise, but never materialized. Now, we see a sudden move to get spectrum from all sorts of real, established companies. So, yes it is a proven product, I'm just concerned the people buying shares agree.
Regards, Mark
PS Here's more proof of agreement.
Applications by the ton as Germany opens floodgates for broadband wireless access
By Peggy Salz-Trautman
20 September 1999
The German land-grab by operators trying to get their hands on Europe's first broadband wireless local loop allocations marks a watershed in the imminent transformation of the Continent's local access markets.
The country's regulatory authority, the RegTP, was inundated by applications as it attempted to hand out frequencies in the 3.5-gigahertz and 26-GHz bands.
During the two-round procedure to allocate frequencies that began last summer and concluded on 25 August, the RegTP sifted through over 21 tons of applications, submitted by a total of 32 companies in competition for the 662 frequencies in 262 regions throughout Germany. Twelve companies were eventually awarded local operating frequencies.
"Companies [awarded these frequencies] can [in particular] begin to focus on the previously untapped market of SMEs [small and mid-sized enterprises] as these high frequencies are best suited for the delivery of bandwidth-hungry services, which [SMEs] require," said Roger Tuckett, principal analyst with Ovum Ltd., in London.
Peter Krussel, managing consultant at Eutelis Consult GmbH, in Dusseldorf, Germany, said urban areas would prove particularly attractive: "There is a lot of money to be made delivering broadband services to SMEs concentrated around city centers. Having the go ahead from the regulatory authority means companies can not only offer these [broadband] services, but they can also offer a complete package of services and access fees that are lower than Telekom."
Eutelis estimates that companies will only need to invest between DM1,000 ($532.4) and DM5,000 per customer to complete the connection. In the past, frequency allocations for alternative broadband access - such as the 10-GHz licenses awarded in the United Kingdom in 1996 - have often laid dormant, but "this time there is no hold up. The frequencies are available at the same time that the equipment is. We can expect to see the next months to be filled with key investment decisions [by operators] and a rollout of this technology," said Krussel.
Ovum estimates that overall expenditure by carriers in broadband wireless in Europe will jump to $1.07 billion by 2005 from $300 million in 1999.
That is equal to 9% of the overall total expenditure by carriers in access technology.
Part of the attraction for the German applicants was that instead of holding an auction, the RegTP decided in favor of a "beauty contest" that would judge companies on their technical and marketing merits. Moreover, only those that gave a commitment to begin building within a certain time-frame were given licenses, explained RegTP president Klaus-Dieter Scheurle.
And observers said the RegTP has allocated frequencies to benefit both Telekom's established rivals and new entrants, some of whom arrived on the German market less than a year ago.
Old rival
One of the established competitors to Telekom is Viag Interkom, a Munich-based joint venture between U.K. carrier BT and German energy conglomerate Viag AG. With a total of 193 frequencies in key regions, including Berlin, Hanover, Dortmund, Dusseldorf, Frankfurt, Cologne and Stuttgart, Viag Interkom is gearing up to deliver wireless broadband services to its first customers as early as October.
"At first we will aggressively target SMEs," said Maximilian Ardelt, Viag Interkom chairman and chief executive. "Beginning in the next year we will focus on the SOHO sector residential customers."
Viag estimates the necessary investments will be "moderate" and will roughly cost around DM1,000 per customer.
Viag will also use its frequencies to complement its existing Genion offer, Europe's first integrated fixed-mobile service that the company launched in July. "The next step in the strategy will be the bundling of Internet and fixed-line services," he added.
One of the newer competitors in the German market is BroadNet Deutschland GmbH - which is so new that it has yet to set up local operations. The Brussels-based venture is 62%-owned by Philadelphia-based Comcast Corp. - which in turn counts AT&T and Microsoft Corp. among its shareholders.
Clear signal
"We applied for frequencies in 42 cities and won every one we wanted," said BroadNet president and chief executive Robert Condon. "This to me is a clear signal that the government is sending to the indigenous operators - that it wanted to bring in new blood to open up competition."
BroadNet will invest around $750 million in its network build and plans to begin offering services in the first quarter of 2000. But rather than following the typical telecoms path.
Condon ultimately wants to position BroadNet as an applications services provider, hosting applications and undertaking functions such as distributing software upgrades for a corporate with multiple locations.
While companies can now begin with the actual building of the network, a third round is expected soon to allocate the 52 frequencies that no company has yet bid for, or frequencies awarded to companies that may be forced to forfeit them if the RegTP finds they have not fulfilled their build obligations.
The allocation process in detail
Access network competition has been a long-stated goal for Germany's regulatory authority (RegTP), ever since Germany's Telecommunications Law went into effect in August 1996. Once the market opened on 1 January 1998, the RegTP moved quickly to address alternative radio access, beginning the so-called first round to allocate spectrum in the summer of that year.
The RegTP decided to divide Germany up - in keeping with the traditional political borders - into 413 regions. Companies were invited to submit their applications.
In the first round the RegTP granted frequencies on the basis of a company's technical planning and frequency management. Altogether some 60 companies applied for licenses, and 10 were granted 382 frequencies.
Amongst the winners were Mannesmann Arcor, tesion Communikationsnetze Sudwest GmbH & Co. KG, and FirstMark Communications Netz GmbH. But because competition for key regions, such as the city centers of Berlin and Munich, was intense it was decided to initiate a second round in 1999.
At this stage, based on "feedback from the industry," the RegTP decided on a re-think and re-divided the country into larger regions based more on technical, rather than political, criteria. This solution - involving 262 regions and 662 frequencies - helped reduce overlap and subsequent radio interference problems.
Bidding ended in May 1999. This time a total of 32 companies applied for frequencies and submitted 1,450 bids. Then in August the RegTP granted frequencies to 12 companies.
totaltele.com |
