LMDS grows past new millennium

Local multipoint distribution service operators will earn $6.5 billion by 2007, according to a Pioneer Consulting study, "LMDS Buildout Strategies: A Broadband Wireless Market Research Report." More than half the revenues will be generated by the small business market, which Pioneer defines as companies with fewer than 10 employees. This group has generated a tremendous unmet demand for low-cost, high-speed access services.

The large business market for LMDS remains small in comparison, Pioneer said, not because of any relative lack in demand, but because of its preference and ability to pay for fiber optic-based systems and services.

Although fiber optics is the primary transmission medium for broadband connectivity, of the 4.6 million commercial buildings in the U.S., 99% are not served by fiber.

The market for business services will be nearly 3.5 times larger than the residential services market by 2007, the study said. The penetration of LMDS into U.S. residential areas will be small, namely because of technology limitations-signals cannot pass through obstructions such as trees that often surround residential areas. For this reason, LMDS may be able to reach only 30% to 50% of total residential buildings in the U.S.

Combining residential and business markets, the LMDS market will grow from $103 million in 1998 to nearly $8.5 billion in 2007, Pioneer projected.