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Despite its name, Raze Technologies doesn't want to destroy the competitive digital subscriber line industry-it wants to help salvage it by providing a crucial last-mile connection that literally hops over the resident local exchange carrier's network.
"In a way we feel we are helping to save the industry," says John Festa, Raze's chairman, president and CEO. "By cutting the cord we can bring services to a new area."
Just eight months out of the corporate chute, the Richardson, Texas-based company is aiming squarely at the residential and small office/home office market for bundled lifeline voice and data services.
Raze's target customers are the beleaguered competitive DSL crowd struggling to forge a business while depending on rival Baby Bells' networks. The company offers a way around that snarl with a last-mile wireless connection that hops over the local carrier's DSL access multiplexer (DSLAM), according to Festa.
"They don't have to lease the line any more to bring data," he says. "We provide the last mile."
Raze's scheme banks on the new 802.16 wireless standard for wide-area wireless networking-which has yet to be finalized-to deliver 4 to 16 megabits per second (Mbps) of data and up to four voice over IP lines at 8, 16, 32 and 64 kilobits per second to customers, depending on the package they choose.
The cellular network is based on a series of remote cell towers routing signals to and from units on the side of the subscribers' homes. Price per subscriber is set at $650 for the unit and a per-capita share of the network costs, with plans to drop that to $500 within 18 months, according to Nicholas Thomas, founder and senior vice president of sales and marketing.
A landline connects the remote cell towers to a central office, where signals flow through either an ATM or Class 5 telephone switch to the Internet. The six to nine-kilometer cell areas can serve about 500 users with a shared bandwidth up to 155 Mbps.
Inside the home, Raze distributes the data and voice over common phone lines using either 10BaseT Ethernet or Home Phone Network Alliance networking.
But it isn't ready for prime time yet. Lab tests will begin in the spring, with beta testing and a product launch scheduled for summer. The company hopes to be ready with field trials by fall 2001.
Thomas admits aiming a product at a market awash in failure and red ink will be a bit tricky. But he insists there is fertile product ground to be found among the CLECs that survive. "Just like in the don't-com world, there is going to be shakeout," Thomas says. "Fundamentally, we want to try to address the basic flaws in their strategy.
"We believe the CLEC strategy is fundamentally flawed-leasing lines as opposed to fixed property. It's really designed to bypass the ILEC and go straight to the interexchange carrier."
While CLECs are the prime focus in Raze's first year, Thomas is quick to add the company is seeking to lock in ILEC clients, saying a major account is anticipated in the second year.
As with the CLECs Raze wants to serve, choosing customers and a target market carefully are key in a market loading up with fixed wireless offerings, according to Matt Davis, an analyst for the Yankee Group. And it is hardly alone-it will have to face competition ranging from Cisco Systems' Aeronet to a wireless DSL offering from Malibu Networks, among others.
"I would hope they will go after the voice CLECs as opposed to the data CLECs who haven't shown much interest in investing in infrastructure," Davis observes. "Independent local exchange carriers might be a better mark-they have not made significant capital investments and are looking to start extending service in this market."
While the market strategy might be in question, Davis thinks Raze may benefit from its launch timing.
"They have probably hit the market at the right time," Davis says. "I think fixed wireless would have had less of a chance getting mindshare when DSL dominated. Now the market has sort of soured to DSL-which is odd because DSL will be the key technology to deliver broadband to the business market going forward. But I think it is probably a good time for a fixed wireless equipment operator to enter the market."
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