Fixed Wireless Market On the Move

According to Frost & Sullivan's "North American Broadband Wireless Access Services Market," fixed wireless access service has matured to a point where commercial deployment is a reality. It also predicts revenue in the industry to climb to $842.3 million in 2001.

Filling gaps
"Fixed wireless technology is one of the few technologies that can go from an Internet service provider's fiber, all the way to the door, and is seamless across the entire metropolitan area," said Frost & Sullivan industry analyst Michelle Gao. "It's an ideal technology to bridge the gap between the fiber backbone and end users."

The biggest potential barrier is getting the wireless signal to the end user. There are a limited number of buildings that can be used as wireless access points, putting roof space at a premium. According to Frost & Sullivan, successful service providers will quickly identify their customers and supply service through quality transmission channels.

"Obtaining access to strategic rooftop locations is very critical to broadband fixed wireless operators," Gao said. "There is only a certain amount of equipment wireless operators can put on the top of each building without interfering in their transmissions."

Line of sight issues can also limit the size of the addressable market, especially residential, and small and medium-size businesses, whose physical locations are usually surrounded by trees and other objects.

"Recent technological developments claim to be able to capture signals as they bounce off buildings and other objects, and redirects them to transceivers, but these technologies are still in the field-trial stage," Gao said.

The immediate goal for broadband fixed wireless service providers will be addressing the business market. In 2000, more than 99 percent of broadband fixed wireless service revenues are generated from business end users. However, there will be more services offered to the residential market by service providers in the next few years, and residential users will go up the demand curve after broadband wireless technology matures and economies of scale can be realized.

ISPs jump into the gap
According to a report based on a survey by internet.com Corp.'s ISP-Planet Web site, fixed wireless technology can be deployed at much better profit margins than either DSL or cable modem high-speed access. Among the ISPs that responded to the survey, 30 percent currently offer fixed wireless broadband technology, and 43 percent plan to offer it. (Internet.com is the publisher of this site.)

The number of fixed wireless subscribers will grow to 3.86 million by 2003, a 1,500 percent increase from the 230,000 users projected at the end of 2000, according to eMarketer. By 2003, eMarketer forecasts that small and medium-sized businesses will represent 80 percent of the total fixed wireless market, where in 1999, business share was at 66 percent.

"Where DSL and cable modem access had once been touted as the most efficient means of broadband access, the speed and cost-effectiveness of fixed wireless services places this technology in prime position to gain market share," said Brian Gilman, senior analyst at eMarketer. "While fixed wireless services will be targeted to the business market, many residential users will be swayed by the system's easy access and pricing models."