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The Business Case of Broadband Wireless Access February 2001

Explore the evolving trends in the telecom market focusing on the business case and strategies for Broadband Wireless Access (BWA). Learn about key considerations, differentiation, deployment insights, and a comparison with xDSL.

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The Business Case of Broadband Wireless Access February 2001

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

  2. Early 2001 – New Environment • Equity market - on hold • Vendor financing – very selective • Slow-down in the Telecom market • Growth of broadband – slower than expected • BWA CLECs business case – yet to be proven

  3. Strategic Focus is Shifting • Cash-flow • Better cost model • Slower broadband growth • Differentiation

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

  5. Business Plan is Revisited • Capture quality customer base quickly • Generate revenues • Reach profitability faster

  6. BWA New Strategies – From Survival to Success • Focus on high density areas • Re-assess marketing strategy: • Leave behind buzzwords and hype • Strong focus on specific segments • Find stronger differentiating factors • Offer your segment what is really needed • Reduce initial investment and expand as you grow (Not a Slogan!!!)

  7. Focus on Your Segment • SME • Small business/soho • MTU • Residential

  8. Carriers’ Criteria for Choosing BWA Equipment 1 Maximize capacity of main asset: limited spectrum 2 Minimize initial infrastructure investment 3 Differentiated services – competitive advantages over incumbent 4 Support for licensed spectrum band

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

  10. WALKair Meets Carriers’ Needs 1 Largest coverage capacity in the market 2 Modular base station – low initial cost 3 Enables flexible bandwidth per customer and differentiated services (QoS, SLA) 4 Supports all licensed bands (3.5, 10.5, 26 GHz)

  11. Commerical Deployments 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 Norway Finland Russia Germany Poland Luxembourg Czech Rep. Slovenia Portugal Spain

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

  13. The BWA Experience • Germany – major allocation in Q3/1999 • Hundreds of Base Stations • Very few end-user connected • Spain – allocation in Q1/ 2000 • Hundreds of Base Stations • Very few end-user connected • Portugal – Allocation in Q4/1999 • Tens of Base Station • Just started to connect customers

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

  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. CLEC: xDSL/Unbundling Advantages • Quick penetration with minimal investment • Lower cost mainly for basic services at high penetration

  17. CLEC: xDSL/Unbundling Disadvantages • Incumbent is owner of the infrastructureNo control of line quality , response time, maintenance, competition ... • Poor qualitywhen binder fill more than 20% ... • Limited service capacityonly up to E1, no symmetric traffic ...

  18. Conclusion: Unbundled xDSL for CLEC • Limited penetration – wire lengthe & quality • Very limited Service capabilities– BW & flexibility • Quality of Service is not guaranteed • Infrastructure owned by incumbent WALKair provides a carrier class , competitive solution, which is independent from the incumbent

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

  20. Broadband Access:New Business Model Winners: BWA by new carrier, xDSL by ILEC, Cable provider Losers:xDSL by new carrier, Fiber by new carrier & ILEC 5 yrs cash flow ( in millions US$ ) 20 0 -20 New carrier xDSL Wireless Source: Ovum, September 2000

  21. Floware WALKair • Market leadership • Differentiated and advanced carrier-class services for SME & MDU • Powerful IP support • Extensive voice support • Highest cell capacity • Best product portfolio for all business market segments • Multi frequency bands: 3.5, 10.5 and 26 GHz

  22. Summary – The Business Case for BWA 1 BWA is the CLEC’s most suitable technology to access its business customers 2 BWA enables Differentiated services – competitive advantages over incumbent 3 With BWA the CLEC can Minimize initial infrastructure investment 4 BWA offers the CLEC a competitive cost structure

  23. “Broadbanding the last mile”Thank You www.floware.com

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