NEW YORK-Prospects for accelerated deployment of multichannel multipoint distribution services here and abroad look promising this year, Michael Greenbaum, chief executive officer of Hybrid Networks Inc., told securities analysts last week.
The company, based in San Jose, Calif., is a major supplier of network infrastructure for MMDS, which is designed to provide high-speed, fixed-wireless, two-way data and voice communications over spectrum once allocated for television in the United States.
In an announcement accompanying Greenbaum’s presentation, Hybrid Networks said it had met its shipment projections of $35 million for the fiscal year ended Dec. 31.
In this country, the major MMDS players have reiterated their intention to forge ahead with network buildout, despite a general slowdown in capital spending expected this year.
Sprint Corp., WorldCom Inc. and Nucentrix Broadband Networks, all customers of Hybrid Networks, are the dominant MMDS license holders in this country. Alaska Wireless Cable, another domestic MMDS licensee, also is a customer.
“In the U.S. market, major capital spenders have choked back substantially because long-distance revenues are declining. Sprint and WorldCom have decided to make all their businesses cash accretive. They said in their November guidance they would continue to invest in optical and fixed and mobile wireless networks,” Greenbaum said in his presentation to the New York Society of Security Analysts.
“But there are two levels of market risk here. First, the extent to which the three dominant spectrum holders invest in opening new markets (because) probably only 20 of the 180 licensed markets have been opened so far.
“The second level of market risk is how rapidly carriers will roll out to the customer base. Except by Sprint in the San Francisco/San Jose (Calif.) area, I have not seen a strong push by operators with aggressive marketing like for DSL (digital subscriber line).”
Greenbaum seemed to have high hopes the Federal Communications Commission would keep spectrum it so recently awarded to MMDS for this purpose, rather than refarming it for third-generation mobile wireless services.
“The FCC has taken the position it wants to encourage broadband competition, and it has done a wonderful job making sure spectrum got awarded in 1999 and 2000,” Greenbaum said.
“In comments a few days ago in its proposed rule making, it said it would not take back (MMDS) spectrum awarded to Sprint, WorldCom and Nucentrix. But we will have to wait till the final ruling in March.”
In recent months, Hybrid Networks has won contracts in Argentina, Ireland, Korea, Latvia, Nigeria and Peru. Wireless World L.L.C., a wholly owned subsidiary of Atlantic Tele-Network Inc., announced Jan. 10 its commercial launch in the U.S. Virgin Islands of high-speed Internet access using a Hybrid Networks system.
“Overseas, there has been some lag in licensure, but we expect major decisions coming up, especially in Latin America, later this year,” Greenbaum said.
“About two-thirds of the business opportunity in low frequency wireless, or MMDS, is outside the United States, not only for Internet access but also for voice communications.”
Hybrid Networks, which holds 14 patents for its fixed-wireless technology, is keeping an eye on the competition as well as the business opportunities.
“Except for Vyyo, which is a head-to-head competitor built on a similar platform, there are a half-dozen others, but they have not yet established a foothold,” Greenbaum said.
“Cisco Systems has declared itself in this market. Because of its sheer size and capability, it could be a very significant competitor. It is working with the three major carriers, but it has not yet achieved a trial success.”
Meanwhile, Hybrid Networks is evolving its technology to handle more diverse environments. In November, it announced a partnership with Intel Corp. “for a new chip on the head-end to offer new modulations for achieving non-line-of-site (coverage) … around trees and buildings,” Greenbaum said.
Line-of-site coverage is adequate for about 65 percent of the population, and the new developments will serve an additional 15 percent, he said.
