TowerStream: Seven years of fixed WiMAX customers

CHICAGO – For the past seven years, a Rhode Island company has demonstrated that WiMAX technology can succeed in the United States.
In 2000, Jeff Thompson started TowerStream with money from a small group of investors and fewer than 30 employees. In 2008, the company is now traded on Wall Street and has more than 200 employees. The company went public last year when $55 million was raised in investments.
The company has become a leading fixed WiMAX service provider. It provides Internet services through its wireless broadband network. The company targets small to medium businesses that have between five and 200 employees. The company first launched its service in Boston in 2001, and now serves eight other large markets across the United States.,
“We have been able to get people to switch off Verizon and AT&T because we are half the cost,” Thompson said during an interview Tuesday.
With the launch of Xohm in Baltimore this week by Sprint Nextel Corp., Thompson said the first mobile WiMAX launch will heighten awareness that the technology is a viable third option for Internet service.
The launch of Xohm “will bring credibility to the marketplace,” he said. “It is only going to help with customer acceptance. It is very positive that Sprint and Clearwire have their first market up and running.”
TowerStream has used a basic business model to grow its business. It targets cities with large numbers of medium to small businesses. It then builds the network and then fills it up with customers.
“If you don’t fill up a network with customers, then a company is headed” for bankruptcy, he said. “We get a network up and running and build our sales force. We then fill up the network and then go the next market.”
The company has repeated its business model first established in Boston in New York City, Chicago, Miami, Seattle, Los Angeles and San Francisco. The Dallas-Fort Worth area was added earlier this year.
Thompson said the company gained confidence that it could compete with the large carriers when it was able to penetrate the market in New York City.
“If you can do it in New York, you can do it anywhere,” he said.
Thompson said a key reason for the company’s success is it has been able to build its wireless networks on towers placed in key areas of the various cities. The company has been able to install its WiMAX base stations on towers in such places as the John Hancock building in Chicago and the Empire State Building in New York.
The company has also gained additional business from the companies its serves. Thompson said 25% of new customers are gained through a reference.
As mobile WiMAX penetrates the consumer sector, Thompson said competing with Xohm is not in its plans. He did note that the networks used by TowerStream and Sprint and Clearwire use the same technology.
“It is interesting that we have these side-by-side networks,” Thompson said. “One is built for businesses and one for consumers.”
Thompson stressed TowerStream has not had any discussions with Sprint or Clearwire about its network.
WiMAX technology will increase in the consumer and business sectors once personal computers and other wireless devices are equipped with WiMAX chips, he said.
“In the future, I think that everything that is equipped with Wi-Fi, will have WiMAX in it,” he said.
As Sprint and Clearwire plan to offer WiMAX to other markets across the country, Thompson said TowerStream will continue with its current business model.
“We sell large pipe with a high quality at a low cost,” he said. “The hardest thing to do is to stay disciplined and do one thing very well.
“We have been doing this for eight years and our customers love it. Once customers jump in on the Xohm network, they will love it.”