The market for broadband access services is on the verge of dramatic growth, and fixed terrestrial wireless systems are expected to play a big role, according to a new Strategis Group report titled, “World Wireless Broadband: LMDS, MMDS and Broadband WLL 1999-2008.”
Broadband wireless access systems are expected to generate service revenues worldwide of nearly $10 billion in five years and $28 billion in 10 years, according to the report. Strategis last year estimated the overall market for broadband access, including wireless, would reach $160 billion by 2003.
“Global interest in wireless broadband is really taking off with potential in both developed and developing telecom markets,” said Susan Welsh de Grimaldo, senior consultant at The Strategis Group. “In developed markets, the technology holds benefits for new competitive operators seeking to enter the local access market.
“For developing countries, wireless broadband offers state-of-the-art, cost efficient, flexible networks that can be quickly deployed without the high cost and time involved in wireline infrastructure projects,” she said.
In the business market, wireless broadband is most likely to be adopted by small- and medium-sized businesses that don’t have access to or can’t afford fiber, as well as some businesses in developing countries, said the report. Other broadband solutions include digital subscriber line and T1/E1 lines.
In residential markets, multidwelling units such as apartment buildings, are another likely target for wireless broadband. Hybrid fiber coaxial cable is another potential link to the residential market, particularly where cable plant has been upgraded to support two-way transmissions.
Satellite systems and third-generation wireless also are named as potential solutions in the broadband access market.
Strategis said wireless broadband gives service providers flexible capital costs, with most of the deployment costs incurred as new subscribers sign up. In addition, most of the deployment costs associated with fiber are for labor, while equipment is the largest part of the cost for deploying wireless broadband. Strategis said it expects falling equipment prices will have a large impact on total costs for wireless broadband.
Fixed wireless systems also can be deployed quickly and can be targeted to the most lucrative customers first, both key considerations for new entrants.
Several countries are rolling out commercial networks, such as the United States, Canada and Argentina, according to Strategis. Trials and licensing are taking place in other large markets, including Japan and Germany, said the report.
By 2001, close to 50 countries will have licensed or will be moving toward licensing broadband wireless carriers, said Strategis. The company expects several key players to begin emerging this year with large-scale activity in many markets occurring in 2001.
In the United States, WinStar Communications Inc. and Teligent Inc. have begun offering commercial service at 24 GHz and 38 GHz, respectively. Local multipoint distribution services licensees are in the trial and deployment stage, said the report. The multichannel multipoint distribution system market also is getting attention, with Sprint Corp. and MCI WorldCom Inc. each within the last month buying wireless cable operators.
Latin America also has moved quickly, said the report. Venezuela licensed LMDS in 1993 for pay-TV services, and Argentina, Brazil, Colombia and Mexico each have awarded licenses for point-to-point and point-to-multipoint wireless broadband, said Strategis. City level commercial deployments are likely this year in Argentina and Brazil.
In Europe, several countries are testing wireless broadband, but Strategis doesn’t expect large-scale deployments to occur there until next year or 2001.
Countries in the Asia Pacific region also are licensing and trialing broadband wireless. Strategis said China could become a large market for wireless broadband if regulatory developments occur.
The report examines 39 countries and projects the market opportunity for each during the next 10 years.
