Fixed wireless’ move to 2G technology at least a year away

It’s going to take at least a year until there’s second-generation broadband fixed-wireless technology--and it’s anybody’s guess what the industry will look like when it arrives.

The unofficial timeline arose when industry leader Sprint halted all multipoint multichannel distribution service (MMDS) deployments until vendors can deliver second-generation non-line-of-sight technology that lowers the cost of installation and customer premises equipment. Sprint’s lead vendor, Hybrid Networks, said it will take at least a year to meet Sprint’s criteria. 

Nothing will happen in the MMDS space until 2004.  --Charles Golvin Senior analyst Forrester Research

“In three quarters, we can do a prototype that will show the industry that good science can be delivered on a reliable and robust and cost-effective basis, and it will probably take another quarter or two after that to work out the production requirements,” said Hybrid’s President-CEO Michael Greenbaum.

Sprint owns 18.1% of Hybrid, and accounts for about 90% of the vendor’s business. Even so, Greenbaum said that Hybrid has “enough cash to realign its spending and its focus to accomplish what it needs to do.”

Of course, that depends on Sprint, which is being coy about who it will choose for its next-generation technology.

“We’ll continue to look at the whole batch of companies that are there and focus on the company that we think fits best for the direction we’re headed,” said Todd Rowley, Sprint’s senior vice president of spectrum management business development.

That direction shouldn’t include 3G mobile in the 2.5-2.7 GHz MMDS/instructional television fixed service [ITFS] spectrum because that’s “a long and difficult [development] path,” Rowley said.

Lindsay Shroth, an analyst with The Yankee Group, also dismissed Sprint’s 3G involvement. Meeting 2G fixed goals will still require a very different industry that has “a better chance surviving if there’s some form of consolidation, and the capital market picks up,” she said.

Shroth and other industry observers note that several niche wireless vendors have pieces of 2G technology but “a lot of them just don’t have the capital to really keep going” without consolidating.

Meanwhile, the clock continues to tick.

“First, [the development of 2G was expected] last year, then it really needed to happen by the middle of this year, and now it’s pretty much not going to happen,” said Shroth. “I’m not surprised it’s going to be pushed back a ways.”

Some think it might be even later. Charles Golvin, a senior analyst for Forrester Research, predicted nothing will happen in the MMDS space until 2004. The industry will survive even in this time frame, Golvin said, after which “fixed wireless is going to be relegated to basically those sites that cable and DSL don’t reach.”

Stroth agreed: “If they [Sprint] try to come back with an offering that is similar to cable modem and DSL … it’s going to be really hard for them to steal pieces” of business.

Portable--not mobile--IP voice service might help, but it’s expensive and may get beaten to the punch by 3G mobile data services. AT&T Wireless is betting on 3G, having abandoned its fixed-wireless business--known as Project Angel--closing down 10 to 12 markets and phasing out 47,000 subscribers because “it didn’t fit into our core strategy with mobility,” said a spokesman.

Fixed wireless was part of AT&T’s “capital-intensive” strategy to bypass the local exchange, and “we knew, in a market where capital is scarce, it would have taken a lot of money to keep that part of the business going,” said the spokesman.

AT&T Wireless’ decision differs from Sprint’s because Sprint’s fixed-wireless business was targeted as a broadband data play, while Project Angel was designed to provide a local-loop alternative for AT&T. Now that AT&T Wireless is independent of AT&T, it’s not needed as a local-loop alternative, the spokesman said.

“In the next three or four years, people will be carrying a phone around that they connect to their laptop that you either can use in your house, your office and get a similar kind of service,” the spokesman predicted.