Fixed Gaze Homeward
Fixed wireless makers have an eye for the residential market
By Jeanie Stokes
from the March 19, 2001 issue of Broadband Week
What's good for business customers ought to be good for residential customers as well ...provided the cost of fixed wireless broadband Internet service comes down to a price point suitable for residential customers. Until now, using wireless technology to accomplish last-mile connections has been targeted primarily at small- and medium-sized businesses that require Internet access with higher data rates. Since fixed wireless' inception, businesses have been willing to shell out nearly $1,000 for equipment and $100 to $300 a month for typical service.
The exception in the fixed wireless world is Sprint Broadband Direct, which offers wireless high-speed access in 13 U.S. markets for around $45 a month, plus the cost of the equipment. That's a comparable price to the digital subscriber line (DSL) access offered in many of these markets by the incumbent and data local exchange carriers. The service also falls into a price range that industry consultants say more than half of U.S. consumers aren't willing to pay.
In response, at least two manufacturers of wireless broadband equipment, Adaptive Broadband Corp. and Adicom Wireless Inc., are working to revamp their existing technologies, and tailor their service for the residential market.
That market has specific needs different from those of business customers, executives with both companies say. Residential customer site units must be mass deployable, and capable of being installed by the user. They must have a consistent and repeatable performance, eliminating the need (and cost) for a technician to align the customer's equipment with the base station. And lastly, the cost has to come down.
"Reducing the total cost of ownership--that's the key to addressing the residential market," says Bill Fu, marketing director, for Sunnyvale, Calif.-based Adaptive Broadband. He says that can be done by either eliminating line-of-sight problems that necessitate professional installation, or by reducing the hardware cost, which right now represents the main expense in delivering the service.
For months now, service providers have expressed strong demand for a residential "shrink-wrapped" product that consumers can buy at a department store and either install themselves or pay minimal cost for professional installation. As with the current marketing of digital broadcast satellite receivers, the full cost isn't likely to be seen by the customers.
"Service providers who face the challenge of putting these into service are saying they pay $1,000 per subscriber unit at this point. That's not low enough. It needs to go to $800 and ultimately to around $500 per unit," for the residential market to flourish, says Brad Stribling, Adicom's senior vice president for engineering.
Price sensitivity is replacing limited supply as the key factor hampering broadband adoption among consumers, as a recent report by Jupiter Research found. A survey of consumers found that 54 percent--more than half of those questioned--said they wouldn't be interested in paying $40 a month for broadband Internet access.
Stribling believes products could be ready for retail distribution later this year if service providers, including CLECs and Internet Service Providers (ISPs) are prepared to launch their marketing of the products. Much depends on the antenna technology improvements that are expected to reduce line-of-sight problems.
"Developing the product and technology is not trivial, but that's something we have done. Now, maturing it and eliminating truck rolls and ease of installation of the service by individual subscribers who don't have a lot of manual dexterity or technical acumen ... that takes a lot of attention by the design team. That is what will drive the industry's largest numbers," Stribling says. Also, the service providers have to roll out equipment, putting headend and base station equipment in place before launching the service.
Because of the perceived demand that seems to exist, there appears to be plenty of market to go around for other players besides Sprint. Stribling points to data suggesting the multi-channel multipoint distribution service (MMDS) spectrum adopted by Sprint and WorldCom will see subscriber numbers grow from zero in 2000 to more than 6 million connections by 2005.
Adicom's AWDL broadband product is designed to work in either the unlicensed or MMDS spectrum in the U.S., in the 3.5 Ghz range in Europe and 802 Mhz in Malaysia.
"We're trying to quickly adapt our product to whatever spectrum is available," Stribling says.
Also affecting the widespread residential rollout of fixed wireless technology is the development of a single unit that sits on a desk and eliminates the current outside transceiver, Stribling says
"There's some considerable challenges with that as you might imagine, and yet everyone says that's where we need to get to. That's still somewhat of a pipedream with most companies," Stribling says. Adicom expects to have announcements within a couple of months on new products and service provider agreements.
Adaptive Broadband says more work is needed to adapt its wireless technology to next-generation products for the residential market. In the meantime, it's entering the multi-tenant unit (MTU) and multi-dwelling unit (MDU) markets using its existing wireless connections with throughputs of up to 25 megabytes per second. While that's more capacity than a single customer would use, it can be shared among multiple tenants in hotels, apartment complexes and on campuses, who still are using the Internet primarily for narrowband applications like checking email.
Working with third party vendors who will provide in-building access, Adaptive sees this as a transition that will prepare it to address the problems specific to a residential market, Fu says.
"The name of the game is applications. Just providing that fat data pipe isn't going to motivate people to spend the money and to use it," Fu says.
At present, the killer application for residential customers hasn't emerged, he says. "If you're not at the point where it really bothers you and you feel that need, you're not going to go out and pay the couple of hundred dollars to get that."
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