A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” National Communications Forum: Session PCS 10 Wireless Broadband Access Session: PCS 10 Tuesday, October 17 Judith Hellerstein, President Hellerstein & Associates 2400 Virginia Avenue NW, Suite 1023C Washington, DC Phone: (202) Fax: (509)

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” OUTLINE  Demand drivers for broadband access  What is fixed broadband wireless access?  Four types of access technologies  MMDS  LMDS  DEMS  38 GHz  Benefits and challenges  Target markets and market deployment

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Market Size  Services  Two Analyst views  Strategis: 2003 – $9.6B  Pioneer: 2007 – $14B  Major Investments  Sprint MMDS acquisitions Apr/99 for $870M  MCI MMDS acquisitions Apr/99 for $805.6M  Significant equipment R&D investments

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Demand Drivers for Broadband Access  Internet growing at exponential rates. By 2002, data will account for 99% of all traffic through the network  By 2003, more than 50% of all Internet access will be through broadband: DSL, Cable and Wireless  More than half of all broadband access will be through DSL  One in four users will be in smaller markets  Strong demand in small, midsize and semi-rural markets  Data traffic demand is driving access market to provide high-capacity transport  Limitations of Fiber/DSL technology are driving the broadband wireless industry

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Bandwidth/Voice Supply & Demand Global Bandwidth Demand Gbps Source: Morgan Stanley Dean Witter Research

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Estimated Growth in Consumer Broadband Access # of Households Source: Morgan Stanley Dean Witter Research

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Broadband is Changing the Shape of Business Access $114 $161 $957 $893 $1,339 $19 Revenues $ Millions Business Access Revenue Forecasts Source: Morgan Stanley Dean Witter Research

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Bandwidth Requirements for Broadband Applications

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” What is Broadband Wireless Access?  Wireless broadband access uses radio spectrum rather than copper or fiber optic cable as a medium for transporting telecommunications and data traffic  Uses spectrum from24 GHz to 42 GHz  Value of spectrum depends on the frequency selected  Targeted deployment  Interface supports voice, data,a nd video services  Bandwidth is shared among users in a cell.  Wireless infrastructure:  Mobile: unable to provide broadband services  Fixed: able to overcome the bottleneck in the first or last mile

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Fixed Broadband Wireless Technology  Technology used to deliver wireless access:  Point-to-point  Point-to-multipoint  Allows high speed, high capacity two way multimedia service to be delivered quickly to consumer.  Fixed wireless access uses spectrum between GHz  ATM air interface supports voice, data, and video services  Bandwidth shared among users in a cell  Bandwidth applications from 64K to 155 Mb

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Microwave  Licensed and unlicensed  Licensed, MMDS, LMDS, DEMS, GHZ  Unlicensed MHz, 2.4 GHz- 5.7 GHz

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Frequencies  Frequencies available for delivering broadband  Spectrum used is typically above 2 GHz  Lower frequencies are often used for mobile applications, while higher frequencies are used for fixed wireless access  Fixed Wireless technologies include: LMDS, MMDS, and DEMS  Fixed wireless spectrum lies between GHz  Both Licensed and unlicensed bands are available  Unlicensed bands include 2.5, 5, 18, and 60 GHz bands (ex. Metricom’s Ricochet)  Licensed bands include 2.6, 24-26, 28-30, and GHz bands  In the US, about 100 MHz is available in the MMDS band near 2.6 GHz and 1.3 MHz is available in the LMDS band near 30 GHz and 1.4 GHz is available near 40 GHz

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Fixed Wireless Systems Architectures  Point -to-Point  Point-to-Multipoint  Point to Consecutive point

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Fixed Wireless Systems  Point -to-Point  Network Architecture consists of a single link between two points, typically two rooftop antennas  Line of sight connection is needed between the two antennas  Each point must be within 1-3 miles of the system’s hub site Base Station Single Customer

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Point-to-Point (contined)  The hub aggregates the traffic from multiple radios and then the traffic is backhauled to the company’s switch

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Benefits of Point-to-Point Architecture  Much less expensive than building a fiber network.  Additional links added as need arises  Ease of additional provisioning  Highly flexible and easy to control

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Equipment  The major providers are:  Digital Microwave  Harris Corporation  Wavespan  Glenayre

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Point-to-Multipoint  Systems are comprised of four main elements  Hubs  Radios  Customer premise equipment (CPE), and  Network management systems  Customers access the network by sending voice and data traffic over the local network to a central hub-site as a radio signal. At the hub-site, the signal is converted back into voice and/or data traffic

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Point-to-Multipoint (continued)  Operates as a “hub and spoke” linking a single radio hub with multiple rooftop antennas  Since each hub site serves several buildings, this type of technology enables service providers to offer faster, cheaper, and more comprehensive serivces  Multiple radios can then be combined to offer 100% coverage. Base Station Up to several thousand customers

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Point-to-Multipoint (continued)  Enables costs to be spread out more evenly among customers  Uses spectrum more efficiently than point-to-point systems  Difficulty in adding additional spectrum because of FCC imposed spectrum caps  Enables bandwidth on demand on a pay per use basis

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Equipment providers  The major providers are  Nortel  Newbridge Networks  Lucent  Alcatel  Spike Technologies

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Point to Consecutive Point  Being deployed by Advanced Radio Telecom using Triton’s technology  The technology is configured as a point-to-point redundant ring architecture capable if providing 100 Mbs of bandwidth in each direction of the ring  Ring configuration allows network operators the ability to expand the geographic area covered by an operator  Capacity can be expanded by deploying additional rings in the area  Network is fully redundant  Rings are self healing  Architecture is similar to SONET

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Four Types of Access Technologies  MMDS (Multichannel Multipoint Distribution Services)  DEMS (Digital Electronic Messaging Service)  LMDS (Local Multipoint Distribution Service)  GHZ

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Wireless DSL Consortium  Wireless DSL Consortium formed in July 2000  New group composed of Fixed Broadband Wireless equipment and chip manufacturers, system integrators, and service providers whose goals are:  To define, develop, and implement a set of open interfaces for MMDS products.  Enable quality of service control to the end-user  Improve Wireless broadband coverage to non line-of-sight customers  Create protocol specifications, interoperability standards, and validation methods for testing of new standard.  Members include, ADC Telecommunications, Conexant Systems, Gigabit Wireless, Intel, Nortel Networks, Nucentrix, Sprint, Vyyo, and Worldcom

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Standards-based Fixed Broadband Wireless  Allows service providers to mass deploy Fixed Broadband Wireless equipment and service  Lack of standards leads to market fragmentation, low volumes, and high cost  Promotes interoperability of technologies and leads to increased customer choice  Allows the market to provide more product and supplier alternatives than possible without a standard  Helps focus industry on resolving other challenges necessary to reach mass deployment  Lowers costs to suppliers and to consumers  Increases choice of providers and greater selection of products

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” MMDS  Frequency Band: 2.5 GHz  Formerly a one-way service, but in September 1998 FCC rules allowed for the commencement of two-way service  In August 2000, the FCC began accepting applications by carriers wishing to convert their one-way MMDS spectrum into two-way spectrum  Data rates: 128 Kbit/s ~ Mbit/s  Originally designed for the delivery of cable TV signals  Supercell approach  Market players: Sprint & MCI WorldCom have the potential to cover 60% of US households

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” DEMS  Frequency Band:24 GHz  Requires a cell radius of 2~3 miles  Data rates: 1.54 Mbit/s  Market player: Teligent holds between 80 and 400 MHz of spectrum in 74 markets  Only commercial carrier in the market

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” LMDS  Frequency band: GHz  Largest block of spectrum ever authorized by the FCC  Capability:  multichannel video programming  two-way voice and data services  Data Rates: 64 Kbps ~ 155 Mbps  Market player: Nextlink

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Typical LMDS User Equipment RF Unit (Outdoor Unit) Network Interface Unit (Indoor Unit) User Terminal 1-10 Mbps Roof Antenna/Transceiver Rx Tx Power Ethernet User Interface Prime AC Power Indoor Unit

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Projected World Market LMDS Service Revenue

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” 38 GHz  FCC recently auctioned off spectrum  Previously licensing of companies had been done on a case-by-case basis  Market players:  Winstar  Advanced Radio Telecom (ART)  AT&T

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Target Markets  Target Markets  SOHO  Small Business  Medium Business  Residential  Demand for high speed access over the past two years has resulted in 35-40% growth rates

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Benefits of Fixed Broadband Wireless  Provides bandwidth and access speeds equal or greater than ADSL or cable modems  Offers quick installation as compared to wired systems  Can extend the reach of fiber or coax by providing the “last mile” of the network  Fast market entry for service providers as compared to wired systems  Low startup and entry costs  Pay as you go approach: carriers only required to add equipment as the number of users grow  Operator control over facilities  Flexibility of deployment, especially in medium--high population densities where penetration rates are initially low

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Services  High speed data bursting as high as 20 Mbs  Local Exchange and Long Distance  Video Conferencing  Training and Distance Learning  Remote medical diagnostics  Virtual Private Networks

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Benefits and Comparison Wireless LMDS MMDS Wire-line

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Alternative High-speed Access Technologies  Cable modem  DSL  Broadband Satellite  Fiber  Mobile- 3G service

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Challenges  Overcoming line-of-sight limitations, such as terrain and tree foliage  Weather related signal loss  Broadband wireless technology is not as well understood as broadband wired technologies  Although spectrum is available, equipment is not readily available  Technology for the higher frequencies is just now coming to market  Lack of any high volume production of equipment needed  155 Mb modems are only produced in low-volume, high-cost production  Technology for low-cost, high speed burst modems is available but systems have not been produced.

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Conclusion  Fixed BWA will provide alternatives to ADSL, T1 lines and HFC systems to deliver broadband services to both business and residential customers.  Fixed BWA will complement, not replace wired systems.  Fixed BWA systems will be used to extend the connectivity to fiber optic networks.

A Telecommunications and Technology Research Group “Give Your Company the Competitive Edge” Questions, Comments, Suggestions? Judith Hellerstein, President Hellerstein & Associates 2400 Virginia Avenue NW Washington, DC Phone: (202) Fax: (509) Thank You