Beyond 3G

Metricom believes Ricochet has long-term future After making moves to more than quadruple its access speeds and footprint in the last year, Metricom officials believe the company's high-speed, wireless Internet access network is positioned to be a viable option in the future - even after much-anticipated third generation networks are deployed.

Metricom rolled out its Ricochet service to eight new markets, expanding its footprint to 11 in the U.S. as the company pursues its goal of serving 46 markets - covering 100 million pops - by the end of 2001, said John Wernke, senior vice president of marketing and sales for Metricom. "It's a footprint race," he said, referring to the company's prospects.

Each of the new markets - and one existing market - use a second generation of Ricochet technology that allows customers to access the Internet at 128 kb/s instead of the 28.8 kb/s speeds offered during its initial three-market rollout (see box).

This speed should ensure Ricochet a long-term place in the market, even in the face of mounting competition, Wernke said. While many carriers will spend billions on 3G spectrum and infrastructure, Ricochet offers high-speed wireless access to the Internet without the expensive pitfalls, he said.

"With us, you give up zero spectrum, you have no upgrade to your network and you still own the customer," Wernke said. "We really don't see 3G as a threat."

Indeed, because of slow 3G deployment in the U.S., 2.5G services - particularly the general packet radio service expected to be offered by Cingular Wireless and VoiceStream Wireless - pose a greater threat to Ricochet, said Lisa Pierce, vice president and research leader for Giga Information Group.

While Metricom can make first-to-market claims in the high-speed mobile access arena, the company is in a "very risky position" long term, according to Datacom analyst Ira Brodsky.

"When 3G arrives, Metricom is going to have a big problem," Brodsky said. "It's not going to be possible for them to compete with the coverage of cellular and PCS."

In addition, he said 3G will offer carriers a path to upgrade their services, while Ricochet may be limited.

"I don't think that Metricom can move to much higher speeds," he said.

Ricochet's networks feature "pole-top" radios on streetlights that are no more than 320 meters apart. These pole-top radios use directional antennas to transmit signals to rooftop radios that service 10-square-mile areas.

In the original Ricochet networks, all signals were transmitted in the 900 MHz frequency, and transmission rates declined as users moved further from the rooftop radios because the signal had to "hop" through several directional antennas, Wernke said. In the upgraded networks, performance is improved by using unlicensed 2.4 GHz spectrum and WCS spectrum in the 2.3 GHz band, which allows the rooftop radios to transmit signals to the pole top radio closest to the user. "We're a 90% one-hop network now, so the customer has a very consistent feel," he said.

But Pierce questions the long-term wisdom of making unlicensed spectrum a significant part of the Ricochet network. "I'm not thrilled with the idea of using unlicensed spectrum," she said. "They seem to think they have [possible interference from other 2.4 GHz users] covered, but there's no way to cover that."

To succeed, Metricom needs to improve its footprint, in terms of both the number of markets it serves and the penetration within those markets, Pierce said. Having devices that work with Ricochet in a manner that is transparent to the user also is critical to the company, she said.

To that end, Wernke said Ricochet-ready devices will be available during the upcoming holiday shopping season. And with the help of new Chief Operating Officer Glen Estell - a former BellSouth executive - Metricom hopes to secure the rooftop and pole-top rights necessary to increase its coverage areas.