International fix

Wireless broadband players accelerate business plans beyond U.S. borders

Sprint and WorldCom may have breathed new life into fixed wireless technology in the U.S., but their endorsement further secured the idea of bringing the technology to international markets. As broadband begins to evolve in overseas markets, U.S.-based fixed wireless operators and vendors will benefit from breaking in before competition really heats up.

Fixed broadband wireless system vendor Hybrid Networks is working with Sprint and WorldCom to develop their multipoint multi-channel distribution service (MMDS) strategies and recently launched its own international strategy. The vendor delayed its international plans to see how Sprint and WorldCom would fare in the U.S.

"The technology has been validated in the most demanding market in the world - the U.S.," said Michael Greenbaum, president and CEO of Hybrid. "The international markets were waiting for a validation of the [MMDS] technology by someone technologically savvy."

Though Sprint's and WorldCom's investments in MMDS have bolstered the technology in the rest of the world, its deployment is more complex. Each country has its own culture and customs, which presents challenges for U.S.-based companies that want to establish international markets. Hybrid, which has 51 installations worldwide, has remedied this situation by forming system integrator relationships with companies such as Thomcast Communications and Andrew; each already has an international presence.

"The way we sell to Sprint and WorldCom will not work in other countries," Greenbaum said."System integrators help us be a part of this international [movement]."

The agreement with Andrew gives Hybrid access to the former's global sales and distribution channels; Hybrid also is a supplier in Andrew's fixed wireless Internet service in Lima, Peru. Through their agreement, Hybrid can tap into Thomcast's operations in France, Germany, Switzerland and the U.S.

While Hybrid will continue its U.S. efforts, the growth is abroad. Greenbaum predicted that in 2004, the fixed wireless business would be most prevalent internationally.

Also taking its business overseas is fixed wireless broadband provider Fuzion Wireless. It moved into the Latin American market when it launched broadband service in Panama City in August. Fuzion will offer local loop connectivity to ISPs and private data networks to local and international businesses. The provider also will offer its PrivateBand point-to-point private data network solution, which connects multiple buildings, international offices, educational campuses and government and medical facilities.

To make sure it has early presence in markets where fixed wireless is in demand, Fuzion, like Hybrid Networks, partners with companies in those markets or employs an individual who is familiar with the specific region. This has helped the provider make its entrance into the Latin American market.

Speedcom also has ramped up its efforts on the international scene. In June, the broadband wireless manufacturer took its business to Latin America. The company formed a subsidiary in Brazil called Wave do Brazil. Two months later, it created a Mexican subsidiary to address the booming demand for broadband Internet connectivity and high-speed private data communications.

Speedcom works with U.S.- or Latin American-based ISPs. The company eventually will move into China and India, said Patrick Pacifico, vice president of marketing for Wave Wireless Networking, a division of Speedcom Wireless International. "Any time a company has presence in a country, people are more willing to do business with you," Pacifico said. "Wireless presence is an interesting business case for companies there that can roll out service quickly."

Becoming an international player is fraught with challenges such as dealing with different regulations or understanding which frequencies can be used and where. Still, the opportunity for fixed wireless overseas continues to grow.

"A lot of companies are looking at Latin America because of the deregulation and privatization down there; there is more room for competition," said Philippa Evert, vice president of investor relations for Fuzion.

Fuzion plans to move into Chile, Mexico and Venezuela in the near future, Evert said.

Expansion overseas has attracted wireless, cellular and broadband companies, both big and small. The growth is expected to continue to rise (see figure on page 80).

"International expansion in broadband wireless and other telecom services represents an enormous opportunity," said Andy Fuertes, senior analyst with Allied Business Intelligence. "It is not a necessity for broad-band wireless providers to expand overseas, but I expect investments there to grow."

Large telecommunications players already started branching out overseas with their broadband technology. BellSouth International serves more than 16 million customers in Asia, Europe, Latin America and the Middle East. AT&T also has worldwide partner-ships.

"There is huge potential [for broadband] and room for a lot of players," Evert said.

Though some industry observers wonder whether large U.S. operators should focus on expanding service in the U.S., the time is ripe for moving into international markets, which are on the brink of a broadband boom.

"As the markets evolve, if companies want to succeed, early presence is key," Fuertes said.

Opportunity is a key driver for international investments. "We are trying to service demand, and there needs to be an alternative to the local telecommunication system," Pacifico said. "With privatization and deregulation around the world, companies are looking for alternatives to the infrastructure in place. The real dramatic growth will occur overseas because of the need. Demand is enhanced by the inability of the wired infrastructure to handle the traffic load."

As a result, some international markets may have more technically advanced networks. "The international market will supersede the U.S. market in fixed wireless because their infrastructure is behind," Evert said. By going straight to broadband technology and sidestepping the wired infrastructure, the international markets could end up ahead, she said.

The next step for fixed wireless is whether it can deliver voice, a component that will be fast to develop outside of the U.S., Green-baum said.

Soaring demand for Internet access and lack of add-on wireline capacity spell good news for Australian cellular operator Hutchison/Orange. For the first time, the company reports roaring trade in a novel cdmaONE wireless service that lets users make local calls at public network rates along with regular cellular calls and, in the process, frees up their wireline connections for Web surfing.

The combined "Local Zone" cordless/cellular service, developed by Korean vendor Samsung, measures the round-trip delay of handset-to-base station signals, allowing Orange to define areas as small as 30 meters in diameter where local call rates can be applied.

"We typically make our local zones much bigger than that, and we guarantee to our customers that the local zone we define for them will be at least within the boundaries of their property," said Bob Dulhunty, Orange's chief technical officer."To my knowledge, we're the only carrier in the world to have implemented this. But it could be applied anywhere in the world where untimed local calls are the norm."

Outside of Australia, cdmaONE networks have been rolled out in the U.S. and Korea and in a number of Asian markets.

Orange's network - the first CDMA network in Australia and the first to be supplied by Samsung outside Korea - has signed more than 25,000 subscribers in less than two months. Australian Internet penetration is around 50% of total households, but according to Samsung, only 10% of homes have a second fixed line.

Orange currently is mulling the introduction of value-added location-based services in Australia. The company also is aiming to introduce 64 kb/s IS-95B circuit-switched data services before the end of the year and could deploy 144 kb/s cdma2000 1X technology in third quarter 2001.

As a possible alternative to the beleaguered GSM Wireless Application Protocol data service, Orange is testing Samsung's HTML-based Mobile Internet Service Provision technology with 200 high-end users.