Qualcomm [Monet Mobile Networks] sets sights on wireless Internet.
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Qualcomm sets sights on wireless Internet
Technology will compete with wired broadband
By Jennifer Davies
STAFF WRITER
November 3, 2002
Throughout its existence, Qualcomm has been synonymous with the
cell phone. Now the wireless technology company hopes to make its
mark on laptops and computers as well.
Companies have begun rolling out Qualcomm's souped-up wireless
technology, hoping to compete with cable and DSL technologies to
deliver high-speed Internet service to computers.
Last week, telecom startup Monet Mobile Networks took an important
step when it launched a wireless Internet service based on Qualcomm's
technology that offers super-fast speeds and is designed to compete
with wired broadband services.
Launched in the small city of Duluth, Minn., the ser vice costs $39.95 a
month for consumers and promises speeds 10 times faster than
dial-up, as well as unlimited use and mobility within Duluth.
Monet joins national cell phone companies, such as Verizon and
Sprint, that offer wireless Internet service for phones and computers
using Qualcomm's technology, primarily for those who need mobile
access to information.
Monet's offering is both cheaper and faster than the national wireless
carriers' services and is tailored almost exclusively for consumers and
businesses looking for an alternative to wired high-speed Internet
options.
While Monet's offer seems like a good deal, many startup technologies
and businesses have failed in competing for customers with wired
technologies such as cable modems and digital subscriber line service,
also known as DSL.
One example is Ricochet, the service offered by the now-defunct
Metricom in about 15 cities including San Diego. While Ricochet
customers lauded the service, there were so few of them – a little more
than 51,000 – Metricom was forced into bankruptcy.
But Metricom wasn't the only company with Internet pipe dreams.
Fixed wireless offerings from such heavyweights as AT&T Wireless and
Sprint as well as from small companies have all but disappeared. And
satellite Internet service has failed to take off as some industry
watchers predicted, felled in large part by its price tag of $70 to $80 a
month.
In the face of such an inauspicious track record, how does Qualcomm
propose to succeed where others have failed?
The price is right, said Irwin Jacobs, Qualcomm's chairman and chief
executive. While other companies have had to spend billions of dollars
deploying technology, Qualcomm's technology is more cost efficient.
"Residences, businesses and schools now have a cost-competitive
alternative to wired broadband," Jacobs said.
Qualcomm was one of several companies that invested about $32
million into Monet earlier this year.
But some analysts question whether a small Midwestern city like
Duluth, with a population of 86,000, is the proper market for such a
high-tech offering.
Consumers in rural markets are not as attuned to technology
innovations as their urban counterparts, said Suzzana Ellyn, a wireless
data analyst for ARS Inc., a La Jolla market research firm.
"This launch is placing a lot of assumptions on their technology
knowledge," she said.
While Duluth might not seem like a battleground for next-generation
technologies, it is ripe for this kind of service because of the limited
availability of broadband, Jacobs said.
"This initiative by Monet is a major step toward bridging the digital
divide by introducing reliable and affordable wireless Internet access
to underserved communities in rural and urban regions," he said.
Industry surveys say that cable Internet service is available to about
75 percent of the U.S. population and DSL service is available to about
50 percent of households. In areas such as Duluth, those numbers are
far lower, said George Tronsrue III, chairman and chief executive of
Monet, a Seattle startup. He estimated that only about 35 to 40
percent of households have access to high-speed Internet service in
Monet's target markets.
Monet plans to expand its service to Moorhead, Minn., Superior and
Eau Claire, Wis., Fargo and Grand Forks, N.D., and Sioux Falls, S.D.,
next year. Tronsrue said the company hopes to reach cash-flow
break-even in 18 months.
Analysts say that projection may be optimistic, because even wired
high-speed Internet service has had a hard time attracting customers.
Only 12 percent of U.S. households have a broadband connection.
Ellyn, the analyst, called Monet's launch "an interesting experiment"
that will help other companies determine how to deploy Qualcomm's
technology.
Qualcomm and wireless carriers need to find new markets for their
technology, said Eddie Hold, a wireless industry analyst for Current
Analysis, a Virginia market research firm.
When the next-generation wireless networks were envisioned, they
were designed to bring the Internet to cell phones and personal digital
assistants. The plan was that consumers would grab up expensive new
phones and spend more money each month using the phones to surf
the Internet, download video images and music as well as send e-mail
and digital photos.
But consumers have given those services a lukewarm response.
Wireless companies have not given up on the mobile Web entirely,
Hold said. Sprint, which launched its nationwide next-generation
wireless network in August, has promoted the service's ability to send
digital photos and e-mail via a cell phone.
Verizon has concentrated more on promoting its wireless service to
laptop users. Hold, who subscribes to the service for $99.95 a month,
said the value is obvious to many business people.
"The usefulness of sending a video to your handset is, let's be honest,
one step away from science fiction," Hold said. "But laptop users get
the notion of a wireless connection to Internet right away. That kind of
application is very important to Qualcomm because it is a
next-generation service that consumers actually want."
Jennifer Davies: (619) 293-1373; jennifer.davies@uniontrib.com
Copyright 2002 Union-Tribune Publishing Co. |
