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Technology Stocks : CellularVision (CVUS): 2-way LMDS wireless cable. -- Ignore unavailable to you. Want to Upgrade?

To: JW@KSC who wrote (1062)	2/9/1998 12:55:00 PM
From: James Fink	Respond to of 2063

Monday February 9, 8:02 am Eastern Time Company Press Release Just in Time for FCC LMDS Auctions: Bellcore Study Offers Insights Into LMDS Pros and Cons MORRISTOWN, N.J.--(BUSINESS WIRE)--Feb. 9, 1998--Bellcore today announced it has published an economic study of LMDS (local multipoint distribution services) to provide companies and investors information they can use as they determine whether the wireless technology would be profitable for their businesses. LMDS uses millimeter wave frequencies to send and receive two-way broadband transmission in cells approximately three to six miles in diameter. The Bellcore study shows that under the right conditions, LMDS could be a feasible alternative to wireline transmission. The study also reports that the wireless technology could be deployed quickly and profitably -- if a company does its ''homework.'' According to Bellcore's director of LMDS consulting, Hady Salloum, part of this homework includes understanding the economics of LMDS. ''As companies gear up for the February 18 FCC auction of LMDS spectrum, this study can help potential bidders and investors position themselves and determine the potential profitability of different services that could be offered with LMDS,'' explained Salloum. The study, entitled ''LMDS Services Profitability: An Economic Analysis,'' examines residential and business services combinations based on a variety of factors including basic trading areas (BTAs), potential U.S. LMDS equipment markets and customer demographics. The study reports that even the most conservative estimates predict the LMDS market in the U.S. will exceed $1 billion in service revenues by year 2012 -- without video services factored in. With video deployment, the $1 billion mark would be reached earlier. Bellcore conducted the economic analysis as part of its overall LMDS-related analysis and consulting work. ''We have more than seven years of hands-on experience with an emerging LMDS technology that has yet to even be rolled out as a fully loaded, commercial system. Our research, testing and measurement work in LMDS helped us incorporate potential BTA designs into our analyses to make them as close to real-life LMDS scenarios as possible,'' Jeff Goldthorp, Bellcore's senior director for Broadband Access said. He added that the study estimates potential profitability for low, medium and high population density areas to allow for a broader analysis. In addition to business analysis support, Bellcore offers engineering, architecture design, planning, measurement and testing services for LMDS. Highlights of the economic analysis are attached. For more information on purchasing the full report, call Bellcore at 1-800-521-CORE or 732-699-5800 and reference report number LP-367. Bellcore, an SAIC company, is a leading provider of communications software, engineering, consulting and training services based on world-class research. Bell core creates business solutions that make information technology work for telecommunications carriers, businesses and governments worldwide. More information about Bellcore's products and services is available on Bellcore's web site at bellcore.com. LMDS Economic Analysis -- Key Findings While LMDS provides enough bandwidth to support video services, offering video by itself does not lead to a profitable deployment. Similarly, offering POTS by itself is not a profitable solution with LMDS. Service combinations are likely to determine profitability of LMDS. While some services are not profitable if offered alone, they may be profitable if offered in combination with other services. For example, for medium ''take rates'' (the number of customers subscribing to a set of services), POTS is not a profitable service on its own but becomes profitable if combined with Internet Access. For medium take rates and conservative estimates, the LMDS market in the U.S. is expected to exceed $1 billion in service revenues by year 2012. With video deployment, the $1 billion mark is reached sooner. Positive cashflows are anticipated in less than five years when profitable LMDS service combinations are deployed. Net profit margins exceeding 30 percent could be realized in 6-7 years. Service combinations featuring the highest Net Present Value are not necessarily the same as those offering the highest return on invested capital. The financial ends pursued by the LMDS investor will depend both on strategic intent and access to capital. Because of the savings in infrastructure costs, LMDS can provide services more economically than other broadband access alternatives. The exact savings depend on many parameters such as service type, customer type, population density, take rates, etc. In Bellcore's view, LMDS could be deployed to serve a medium size city as soon as nine months from the date at which the FCC auction terminates. The study also confirmed or supported existing conclusions about LMDS including: Interconnecting the backbone between LMDS hubs is more economical using a hybrid backbone than a fiber backbone. However, hybrid backbone systems face capacity limitations and may not be as cost-effective in the long run. The likelihood for profitability is greater when LMDS is deployed in established sun-belt cities. Also, targeted ''micro-service'' areas in suburban regions can be profitable. Both LMDS and wireline architectures can achieve 99.99% and 99.995% availability. LMDS can offer additional advantages including faster deployment and reduced infrastructure capital costs. LMDS technology is scaleable. In other words, to increase the transmission area, additional transmitters/hubs can be efficiently located so that the cost adding new coverage is not drastically increased (i.e., to double coverage, the number of transmitters does not need to be doubled). ------------------------------------------------------------------------ Contact: Bellcore Deanna Munoz or Ellen Rave (973) 829-2166 erave@notes.cc.bellcore.com