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1 The Business Case of Broadband Wireless Access February 2001 The Business Case of Broadband Wireless Access February 2001 Rudy Leser Vice President Business.

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Presentation on theme: "1 The Business Case of Broadband Wireless Access February 2001 The Business Case of Broadband Wireless Access February 2001 Rudy Leser Vice President Business."— Presentation transcript:

1 1 The Business Case of Broadband Wireless Access February 2001 The Business Case of Broadband Wireless Access February 2001 Rudy Leser Vice President Business Development e- mail:

2 2 Early 2001 – New Environment nEquity market - on hold nVendor financing – very selective nSlow-down in the Telecom market nGrowth of broadband – slower than expected nBWA CLECs business case – yet to be proven

3 3 Strategic Focus is Shifting nCash-flow nBetter cost model nSlower broadband growth nDifferentiation

4 4 Trends In The Telecom Market Financing squeeze Review plans to improve ROI Some CLECs’s business plans are faulty The strong ones will survive

5 5 Business Plan is Revisited Business Plan is Revisited nCapture quality customer base quickly nGenerate revenues nReach profitability faster

6 6 BWA New Strategies – From Survival to Success nFocus on high density areas nRe-assess marketing strategy: nLeave behind buzzwords and hype nStrong focus on specific segments nFind stronger differentiating factors nOffer your segment what is really needed nReduce initial investment and expand as you grow (Not a Slogan!!!)

7 7 Focus on Your Segment nSME nSmall business/soho nMTU nResidential

8 8 Carriers’ Criteria for Choosing BWA Equipment Support for licensed spectrum band Maximize capacity of main asset: limited spectrum Minimize initial infrastructure investment Differentiated services – competitive advantages over incumbent 4

9 9 BWA Differentiated Services Prioritized VLANs VLANs, VPNs Switched circuit voice on demand Assigned bandwidth for always on internet

10 10 WALKair Meets Carriers’ Needs Supports all licensed bands (3.5, 10.5, 26 GHz) Largest coverage capacity in the market Modular base station – low initial cost Enables flexible bandwidth per customer and differentiated services (QoS, SLA)

11 11 Commerical Deployments Norway Czech Rep. Finland Spain Russia Germany Portugal Slovenia Luxembourg Poland Europe: Cameron - Sakon Czech Rep. – CRA, GlobalOne Finland - Finnet Germany - Arctel, FirstMark, Star 21 Luxembourg - FirstMark. Norway - UPC Poland – El Net, TPSA, TPZ, Czeptel, Elterix. Portugal – Teleweb, Novis Russia - Sovintel Slovenia – Telekom Slovenia Spain – Abrared, FirstMark

12 12 Argentina - Telefonica Honduras - GlobalOne Mexico – G-Tel Uruguay – Rivizul China India – Gateway, STPI Philippines - Beltel, Digitel Commerical Deployments, CONT’D Asia Latin America Cameron – Sakon Gahna - SITA Nigeria - SITA Zimbabwe - Africom Africa Philippines India China Zimbabwe Nigeria Uruguay Argentina Honduras Mexico Cameron Gahana

13 13 The BWA Experience nGermany – major allocation in Q3/1999 nHundreds of Base Stations nVery few end-user connected nSpain – allocation in Q1/ 2000 nHundreds of Base Stations nVery few end-user connected nPortugal – Allocation in Q4/1999 nTens of Base Station nJust started to connect customers

14 14 The CLEC Access Cost Model Per CPE link €0 €20 €40 €60 €80 €100 €120 €140 BWAxDSL Euro per month Feeder Costs & access cost & Infrastructure Opex BS/CO / CPE Installation & comm. &. BS Installation & comm. &. Maintenance BS/CO CAPEX CPE CAPEX Note: I. Monthly cost II. full capacity analysis

15 15 BWA Versus xDSL/ Unbundled Access Various cost comparisons show that BWA may cost from 5% to 25% higher than xDSL using unbundled access.

16 16 CLEC: xDSL/Unbundling Advantages nQuick penetration with minimal investment nLower cost mainly for basic services at high penetration

17 17 nIncumbent is owner of the infrastructure No control of line quality, response time, maintenance, competition... nPoor quality when binder fill more than 20%... nLimited service capacity only up to E1, no symmetric traffic... CLEC: xDSL/Unbundling Disadvantages

18 18 WALKair provides a carrier class, competitive solution, which is independent from the incumbent Conclusion: Unbundled xDSL for CLEC nLimited penetration – wire lengthe & quality nVery limited Service capabilities– BW & flexibility nQuality of Service is not guaranteed nInfrastructure owned by incumbent

19 19 CLEC – Differentiation by BWA nBandwidth higher than the incumbent's DSL n> 2 Mbit/sec symmetrical nDynamic bandwidth per user allow offering peak rate based services, yet with committed minimal throughput. nE.g. committed 512 Kbit/sec and a maximum of 4 Mbit/sec nCombine with BR-ISDN

20 20 Broadband Access: New Business Model New carrier xDSL Wireless Winners: BWA by new carrier, xDSL by ILEC, Cable provider Losers: xDSL by new carrier, Fiber by new carrier & ILEC Source: Ovum, September yrs cash flow ( in millions US$ )

21 21 Floware WALKair nMarket leadership nDifferentiated and advanced carrier-class services for SME & MDU nPowerful IP support nExtensive voice support nHighest cell capacity nBest product portfolio for all business market segments nMulti frequency bands: 3.5, 10.5 and 26 GHz

22 22 Summary – The Business Case for BWA BWA offers the CLEC a competitive cost structure BWA is the CLEC’s most suitable technology to access its business customers With BWA the CLEC can Minimize initial infrastructure investment BWA enables Differentiated services – competitive advantages over incumbent 4

23 23 “Broadbanding the last mile” Thank You


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