While wireless broadband technologies stir some excitement around both service providers and vendors, rural carriers are likely to take the most advantage of them in the short run as the business model catches on with the big operators in the wireline and wireless spheres, according to a joint study by Bear, Stearns & Co. and TMNG.
Carriers such as Western Wireless, Dobson, Rural Cellular, Alamosa PCS and Nextel Partners soon may start looking into deploying the technologies, according to the study titled, “Wireless Broadband: The impact of 802 technology.”
The study reached three other broad conclusions.
Portable services will be dominated by Wi-Fi because it was the first technology to hit the market, provides low cost and offers value for end users. The report distinguishes portable and mobile services. Portable services refer to offerings like Wi-Fi that end users enjoy by way of their portable laptops. As a technology, Wi-Fi is less mobile than 802.16 and 802.20 since those services cover a wide expanse of territory and may be able to hold their own against cellular technology.
Secondly the report concludes that 802.16, also known as WiMAX, and 802.20, often referred to as Mobile-Fi, could replace traditional broadband, but it will take a longer time to mature and require licensed spectrum.
Its third conclusion is that Wi-Fi will complement existing wireless and wireline solutions, while making the most of backhaul and campus opportunities.
The report also noted that rural carriers could benefit from the Universal Service Fund, which will support wireless broadband solutions.
“Rural wireless carriers have engaged in an aggressive effort to win USF eligibility and support for voice, which could be extended to a (wireless broadband) offering,” said the report.
Spectrum, whether it is PCS or MMDS, will not be expensive for rural operators, the report asserts. In spite of its potential strengths, the absence of licensed spectrum will not “guarantee a level of service and availability for the paying portable user,” said the report.
“The use of unlicensed spectrum could lead to wide disparities in quality of service, bottlenecks and security issues,” said the study.
WiMAX and Mobile-Fi carry the weight of higher cost of base stations and customer premise equipment, which refers to what it costs the customer to set up the service. Bear, Stearns and TMNG, however, note that the cost “could fall dramatically as the technologies are standardized and achieve greater scale, potentially making it more attractive to carriers.”
But Wi-Fi, noted the report, still has great bottlenecks as paid service offerings have not yielded much net revenue while pure-play providers still stand on groggy feet. It cited the collapse of Cometa Networks, a start-up backed by AT&T Corp., Intel Corp. and IBM Corp., as an example.
The study says the preponderance of DSL in the access lines of the wireline players will limit the appeal of wireless broadband protocols.
Between about 75 percent and 80 percent of the access lines have been qualified for DSL, making the deployment of the wireless broadband infrastructure a replication.
Carriers will use 802.16 and 802.20 where DSL is not available, the study speculates. The report singled out BellSouth as bucking this possible trend by launching a six-month broadband wireless trial in Palatka, Fla., following one in Daytona, Fla.
The carrier has not yet committed to the technologies as it wants to find out how far the wireless broadband antennas can extend beyond its DSL coverage area.
