When questioned about the narrowband wireless local loop market, people in the telecommunications industry offer such differing opinions you expect a hidden camera to be planted somewhere in an attempt to catch your bewildered expression.
According to Arnon Kohavi, vice president of strategic business development and co-founder of Vyyo Inc., a supplier of WLL solutions, “Cellular killed the narrowband WLL market.”
But others agree with Mike Haidar, general manager of the software and systems division at Analog Devices Inc., who said, “There is a lot of life in narrowband.”
As in most cases of differing opinions on a topic, the truth about narrowband WLL probably lies somewhere in between.
“The [WLL] market is changing from a narrowband-centered market to a broadband-centered market,” explained Larry Swasey, senior wireless analyst for Allied Business Intelligence in Oyster Bay, N.Y. “We are seeing a little bit of a lull in deployment of narrowband services now, but within a few years the market will again pick back up. [Local multipoint distribution system] and [multipoint multichannel distribution system] have made such great progress in the past 18 months that narrowband has fallen behind.”
Swasey noted that even with the lull, the narrowband WLL market had more than 2 million subscribers at the end of 1999, and he predicts there will be more than 100 million subscribers worldwide by 2006.
The holding pattern that is gripping the WLL market has been attributed to many factors.
For carriers, the progress of broadband solutions has forced them to meet the current boom in broadband services, along with the money and spectrum needed to build out broadband networks, instead of worrying about narrowband services geared toward consumers.
“Carriers are spending a lot of resources building broadband infrastructure for business deployment,” Swasey said. “The consumer demand for narrowband services is not great enough at this time to warrant the allocation of resources by carriers.”
In addition, carriers are holding back on narrowband development until a third-generation technology standard is agreed upon. Some see Code Division Multiple Access as the best bet for WLL service, but until those systems begin to roll out, it is a risky bet to place.
“Everyone is waiting for 3G services,” said Mike Guertin, associate consultant for TeleChoice, Denver. “But even with 3G, there are still several competing standards that will complicate matters. Hopefully someone will come in and mandate a technology standard or the market will suffer. The narrowband services being offered now are just getting consumers used to the service-getting their feet wet-for future services that can be offered by 3G.”
From a vendors point of view, the lack of one technology standard has made them uncertain about what the market needs.
Ake Persson, president of Ericsson Wireless Communications, told RCR last year that with so many competing technologies, operators had too many options to choose from and weren’t sure of what the market would eventually settle upon.
Persson also noted that it was becoming increasingly difficult for WLL to compete pricewise with wireline and mobile services. If consumers were being offered a choice between fixed wireless service and mobile wireless service for the same price, the mobile choice was the obvious choice.
The international market
Internationally, the narrowband WLL market is very different. Developing countries see little need to offer advanced broadband services when most of their population lacks even basic telephone service. For these countries, narrowband WLL is seen simply as a way to get telephone service into people’s homes.
“There is a middle ground where those without even basic phone service don’t want or need to jump on the broadband bandwagon,” said Haidar. “WLL offers quick deployment, low cost and inexpensive service for consumers in developing countries. We do not even factor in the U.S. market with our service. We look at places that just want to get a phone in someone’s house.”
Analog Devices pointed out that in developing countries, access to fixed telecommunications infrastructure is next to impossible. The company noted India has more than 1 billion people, yet possesses only about 12 million fixed phone lines.
“In Latin America, WLL is the perfect model for deploying telephone service to people who are having to wait more than a year for service now,” noted Guertin of TeleChoice.
Analog Devices also pointed out that the recent downturn in WLL deployment was felt in international markets as well, but said demand was not the issue.
“A lot of foreign countries have been going through a lot of tough economic issues recently,” Haidar said. “For a while it was a down surge due to the economic issues, but it has turned around recently. We are definitely seeing an upsurge in the international industry now.”
Haidar noted that Brazil alone has committed to installing 8 million WLL lines within the next six years.
As uncertain as the market for WLL is today, most agree that its future is finite as wireless and wireline systems evolve.
A recent report by Dittberner Associates Inc. noted that where WLL systems had been deployed in the past, many eventually were displaced by wireline connections, despite the satisfactory performance of the wireless systems.
In addition, the report said cellular and personal communications services networks have shown, particularly in Japan, that they can fill the role of plain old telephone service fixed wireless access, with plans for 3G wireless to continue to do the same.
“Three or four years down the road, we will have to look beyond what is available now,” Haidar said.
