The Big Picture about Small Markets:
The Growing Success Story of
License-Exempt Wireless
Broadband in Rural America
Patrick Leary
June 2002
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One quick note. Why are we
qualified to speak to you today?
• The merged companies of BreezeCOM and Floware
• Approx. 60% of the global market share (Strategies
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Unlimited 2002)
Largest R&D in the Industry
Major contributor to base IEEE 802.11 (mid ’90s). Active in
IEEE 802.11b. Co-Chair IEEE 802.11a standard committee,
active in IEEE 802.16
Largest installed base in the world (over 500,000 units)
Significant deployments in more countries (about 100)
Major global OEM partners include Alcatel, Siemens, NEC
Serve all major public and private bands (2.4GHz, MMDS,
3.5GHz, UNII, 5GHz ISM, 10.5GHz, 26GHz as well as
many other bands specific to individual markets such as
ETSI)
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Defining Key Terms
High Speed Wireless (as it primarily relates to the
technology explosion in the US) :
IP-based wireless delivery of information in replacement or
compliment of wire line technologies at multi-megabit
Horizontal distribution of 802.11b
capable speeds.
WLAN for Internet access in small,
strategic pockets.
Wireless LAN
“Hotspots”
Wireless connection of specific nodes, local or remote, to
form a shared, common LAN. Usually 802.11b.
Wireless Broadband
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Wireless delivery of high-speed Internet/IP services over a
geographic range to enable access for an unrelated set of users.
Most consist of either 802.11b-based systems or proprietary
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protocols in 2.4GHz, and now proprietary 5GHz. The upcoming
802.16a is expected to full additional growth.
Technology Adoption Cycle –
Unlicensed Wireless Broadband in North America
The market is trending toward the ISO’s
V
Slop towards
acceptance
Sales peak
V
Late
comers
Now
=
v
o
l
u
m
e
Market saturation
Conservative adopters (telcos, utilities) 2002/2003
Early adopters (small, private ISPs) 2000/2001
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Incubators ( ISPs like Midcoast, Odessa Office)
1998/1999
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In the NTCA’s fall 2001 annual broadband
report, where they survey members
regarding their broadband statistics and
plans, fully 100% of respondents said
broadband was at least “somewhat
important” to their future (86% said very
important). Not a single respondent said it
was of little importance.
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The same set of respondents said their
cable and xDSL offerings would be flat in
2002, but that their wireless deployments
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would double.
U.S. Unlicensed
Wireless
Broadband
U.S. Wireless
Broadband
Markets Markets
West
417
Southw est
306
Midw est
1115
Southeast
237
Northeast
340
0
200
400
600
Markets Served
(Total = 2415)
6
800
1000
1200
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Unlicensed Fixed Wireless Broadband Markets by State
State
Markets State
Northeast
Markets State
Southeast
Markets State
Midw est
Markets State
Southw est
Markets
West
Connecticut
11
Alabama
12
Illinois
220
Arizona
53
Alaska
Delaw are
2
Arkansas
15
Indiana
245
Colorado
77
California
Maine
16
Florida
69
Iow a
124
New Mexico
16
Haw aii
9
Maryland
15
Georgia
13
Kansas
42
Oklahoma
14
Idaho
41
Massachusetts
33
Louisiana
14
Kentucky
13
Texas
146
Montana
24
New Hampshire
25
Mississippi
5
Michigan
81
Nevada
5
New York
33
North Carolina
43
Minnesota
177
Oregon
13
Ohio
64
South Carolina
17
Missouri
42
Utah
69
Pennsyvania
125
Tennessee
23
Nebraska
82
Washington
50
Rhode Island
11
Virginia
24
North Dakota
4
Wyoming
13
Vermont
5
West Virginia
2
South Dakota
35
Wisconsin
50
Northeast
340
Southeast
237
Midwest
1115
Southwest
306
5
188
West
7
7
417
Unlicensed Wireless Broadband Estimates*
• Approx. 400,000 US unlicensed fixed wireless
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subscribers, but we expect about 2M by 2005.
Currently we estimate 80% subscribers are
commercial generating about $300M in annual
subscriber revenue.
Residential estimate of about $70M annually, but
expected to increase 10x by 2005.
Estimates do not include “hotspot” revenues (over
6,000 US hotspots expected by end of 2002)
US WLAN sales expected to be about $2B by 2004
(InfoTech). Market expected to experience 5x growth
in 5 years
* Data is compiled by Alvarion, based on
combinations of available market reports
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Contrast that to licensed broadband
providers including MMDS-based or
LMDS-based wireless broadband
• Even at its peak and before they ceased adding
customers, Sprint, by its own count, had only 35,000
subscribers to its national wireless broadband service
• WorldCom’s national subscriber counts were
estimated to be under 40,000
• 2001 also saw the failures of Winstar, Teligent, and
ARTS
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All these spectrum assets are being held,
but few customers in any markets are being 9
served.
Fixed Wireless Broadband
Global Subscriber Growth*
(in thousands, incl. All bands unlicensed + licensed)
2000
2001
2002
2003
2004
2005
2006
396
572
897
1,395
3,497
6,319
10,019
Alvarion estimates 20% of these relate to US numbers
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* Source Allied Business Intelligence, Inc. published Q4, 2001
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…an example of service availability in
just two states…
South Dakota
Baltic, Big Stone City, Brandon, Buffalo, Buffalo Ridge,
Canton, Casper, Castlewood, Cody, Colton, Crooks, Dell
Rapids, Ellis, Garretson, Gillette, Harrisburg, Hartford,
Hudson, Humbolt, Hurley, Kranzburg, Lennox, Montrose,
Parker, Pipestone, Rawlins, Renner, Rowena, Sioux Falls,
Sioux Valley, Tea, Valley Springs, Watertown, Worthing
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…and Minnesota
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Albert Lea, Albertville, Alpha, Anoka, Argyle, Arlington, Atwater, Avoka, Baxter, Beaver
Creek, Bell Plaine, Bergen, Bernadotte, Beauford, Biegelow, Big Woods, Bingham Lake,
Bird Island, Biscay, Blakely, Bloomkest, Brainard, Brewster, Brooklyn Park, Browton,
Buffalo Lake, Burlington, Burnsville, Butterfield, Cavalier, Cedar Mills, Champlin,
Chandler, Clarks Grove, Cleveland, Cloquet, Cokato, Comfrey, Corchester, Corvuso,
Cosmo, Courtland, Currie, Danube, Darwin, Dassel, Dodge Center, Duluth, Donaldson,
Dundee, Eagle Lake, Elk River, Ellsworth, Elysian, Fairfax, Fairmont, Faribault, Fulda,
Gaylord, Gibbon, Glencoe, Grafton, Grand Rapids, Hallock, Hancock, Hadley, Hamburg,
Hanska, Haugen Farm, Hayfield, Henderson, Hector, Heron Lake, Hills, Howard Lake,
Humbolt, Hutchison, Iona, Jackson, Jeffers, Jessenland, Kandiyohi, Kasota, Kennedy,
Kinbrae, Kittson, Klossner, Kurth Farm, Lafayette, Lake Bronson, Lake Cystal, Lake
Jennie, Lake Lillian, Lake Shetek, Lake Washington, Lake Wilson, Lakefield, Lumberton,
LaSalle, LeSueur, Lismore, Little Falls, Lonsdale, Luverne, Madison Lake, Mankato,
Maple Grove, Minneapolis, Montevideo, Morgan, Morris, Mt. Lake, Nash, New Auburn,
New London, New Ulm, Nicollet, Norseland, Northcote, North Field, North Mankato,
Olivia, Ortonville, Osseo, Otsego, Owatonna, Piertz, Plato, Prior Lake, Ramsey Reading,
Remmers Farm, Rogers Rosemont, Round Lake, Rushmore, Sartell, Sauk Rapids,
Savage, Shultz Farm, Searles, Shakopee, Skyline, Sleepy Eye, Sioux Valley, Slayton,
Spafford, Spicer, Springfield, St. Cloud, St. George, St. James, St. Michael, St. Paul, St.
Peter, St. Thomas, Steen, Stephen, Stewart, Stordon, Sumter, Tabor Angus, Thompson,
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Thorpe, Traverse, Truman, Vernon Center, Waite Park, Warren Waterville, Webster Farm,
Wilder, Wilmar, Wilmont, Windom, Winthrop, Worthington
Who is deploying unlicensed wireless
broadband for complete local coverage?
Private ISPs
Local Telcos
Public Utilities and Electric Co-ops
Small Cable Operators
Rural Cellular/PCS Carriers
City/County Governments
Public Safety groups (e.g. Police/Fire)
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So what is really driving this
phenomenon in rural America?
It is a quality of life issue!!
 To attract and retain businesses to ensure a
strong commercial tax base and the availability
of good jobs.
To create “access equity” for schools and
libraries so their children have the same access
as do children in a metro area.
To build a virtual community that enhances the
physical community by improving municipal
services and encouraging participation.
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These groups are increasingly choosing wireless
due to the inequitable access to, and lack of control
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with, wireline options, as well as short ROI.
ROI Example for Premium Grade Brand
• Assumptions:
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350 subscribers: 250 residential/ SOHO, 100 SME
Monthly charges: $50 res./ $200 bus.
Installation charges: $100 res./ $300 bus.
2 populated Base stations installed for about $25K each (capacity is
about double this sample)
• Assumes 2 T3’s for Internet pipe at monthly cost of $7,000
• Assumes high average CPE cost of about $700
• Results:
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Wireless hardware investment of $295,000
Customer installation charges $55,000
Monthly revenue of $32,500
Monthly income (less Internet pipe cost) of $25,500
Hardware ROI in just under 9.5 months
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Summary
Unlicensed wireless broadband, with only the
support of the free market, is growing well
even in a severely contracted market.
Contrast that to the dismal failure of national
MMDS license holders in the space.
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Clearly, the FCC’s greatest broadband success
story is the one least appreciate, least
understood, and least supported. With only a
modicum of support, this market will become
the catalyst for national broadband equity and
the key to economic growth and vitality of the
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rural community.
THANK YOU
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