Selling Speed

Marketing wireless broadband service takes a personal touch.

It's a tossup whether “wireless” is an advantage when selling broadband services to the average consumer. Neither Sprint (www.sprint.com) nor AT&T (www.att.com), the two companies with the biggest residential inroads into fixed-wireless broadband service, uses “wireless” in its product name: Sprint Broadband Direct and AT&T Digital Broadband.

“Wireless is tricky,” said Allison Hydorn, San Francisco marketing manager for the Sprint Broadband Wireless Group. When people hear “wireless,” they associate the product with Sprint PCS, especially with the wireless Web. So, rather than use “wireless,” she tries to position it as another delivery method for Internet access.

Yet Erica Viola, Sprint marketing manager for the Silicon Valley, sees more early adopters, people who understand the concept better, and she said wireless is a plus.

Joe Morrisroe, AT&T Fixed Wireless Broadband southwest regional director, likes to promote wireless as the new technology, something that bypasses the old wireline service provided by “the monopoly.”

AT&T's service is not just wireless Internet access but includes wireless voice as well. It's an opportunity for the carrier to take on the LECs in the local markets.

“I've been a little surprised by the importance of voice service,” said Tucker Moody, AT&T Fixed Wireless Broadband senior vice president of marketing & sales. “In the local (telephone) business, customers haven't had any choice, and they are not necessarily satisfied with the service they're getting today from the local-exchange company.” About half of the sales are voice-only customers, he said.

Andy Fuentes, Allied Business Intelligence (www.alliedworld.com) senior analyst, said it definitely makes sense for companies such as Sprint and AT&T to get into the wireless broadband arena early. One obvious reason is that it will provide opportunity for a future revenue stream. The other is that it is a chance to control the local loop and get around paying the local carriers.

“It's a matter of survival,” he said. “You must learn to compete in the local services market, merge or get bought out.”

Brand & Price

In attracting customers, Moody and Morrisroe both said the AT&T brand is key. Next comes price.

“We're 30% cheaper (for a voice and data package) than the incumbent LEC,” Moody said. The company's No. 1 marketing technique is door-to-door sales, followed by direct mail and door hangers, and community activities. “This is a very local business.”

Hydorn seems to agree.

“We directly connect with the customer and ask for the sale,” she said. Although ad materials are developed at Sprint's corporate headquarters, the company does not try to market remotely, relying instead on local marketing managers.

Hydorn calls San Francisco a “super-challenging market.” As a result, she does not discount any approach or any population segment.

“Our most successful event was a gay and lesbian event,” Hydorn said. She also has targeted African American women as potential broadband customers.

Although Viola may have an easier sell in the Silicon Valley, she, too, seeks out community groups and emphasizes the value in potential customers having “actual live people to talk to.”

AT&T also tailors its marketing materials to the local markets, Morrisroe said. “The core value proposition we offer — ‘digital gives you more’ — is consistent across the board,” he said. But selling techniques vary, as does the desire for features in various parts of the country. Three states lead the country in the adoption of features such as 3-way calling and caller ID: California, Oklahoma and Texas. Alaska leads in terms of Internet use per person.

Morrisroe's mailers tout AT&T's advantage over incumbents Southwestern Bell (www.swbell.com) and Verizon (www.verizon.com).

“What does our new local calling area give you that Southwestern Bell and Verizon's doesn't?” one brochure asks. “All of Texas,” it responds, telling potential customers that every call in Texas is a local call — at least until 2002.

AT&T also is experimenting with offering its wireless broadband service in stores that sell the AT&T mobile wireless products.

“We have three stores within our service area where service is available at the store site,” Morrisroe said. When customers come in for mobility products, they find in-store kiosks where they can try out wireless broadband. So far it has proven successful.

“It's a natural fit, wireless and broadband,” he said.

Questions from Sprint's potential customers range from the speed of the service to possible holes in the roof to concerns that the antenna is ugly. Once the first customers sign up, word spreads, but the customer-referral program doesn't work as well as it could.

“Because this is a shared medium, customers say, ‘Don't tell your neighbors. I don't want anyone else on this because I want my speed to stay this high,’” Hydorn said.

Hydorn said she is looking forward to the next generation of wireless broadband equipment that Sprint has started testing in Seattle. Today, more than 50% of the customers ordering the service in San Francisco cannot be installed because of the line-of-sight requirement for the service.

Yet, a real benefit of wireless broadband is summed up in the tag line Viola uses: “We can install you in days, not weeks.” Installs usually are done in six to seven days, she said, calling wireless broadband a “good-news product.”

Morrisroe also said his customers are surprised that they can get the service in a couple of days, as well as by the fact that they can self-install the equipment on the computer (after a technician installs voice service).

In fact, acceptance of the AT&T product was so good last year that “the demand got ahead of us, and we took some good steps to be sure to control it,” Morrisroe said. His team stopped marketing until it could add more capacity and has learned to balance supply and demand, he said.

Service Launches

AT&T has launched wireless broadband service in Anchorage, AK; Bryan, College Station, Dallas, Fort Worth, Houston and Victoria, TX; San Diego and Los Angeles. The first installations were in the PCS bands; now it's using WCS spectrum.

Texas customers pay $25 for one phone line, unlimited statewide calling, 7¢-per-minute state-to-state calling, caller ID, call waiting and 3-way calling. Installation is free. Customers can self-install high-speed Internet service for an added $34.95 a month.

Sprint's markets include Chicago; Colorado Springs and Denver, CO; Detroit; Fresno, San Francisco and San Jose, CA; Houston; Oklahoma City; Phoenix and Tucson, AZ; Salt Lake City; and Wichita, KS. The carrier uses MMDS spectrum.

Sprint's long-distance customers pay $39.95 a month in San Francisco for high-speed Internet with free installation and a reduced 1-time charge for equipment, $99 instead of $299.

Beachlink Beachhead

Many small wireless ISPs are finding their niches in less-competitive realms than those faced by Sprint and AT&T. Take Beachlink.com (www.beachlink.com). Ken White, president & CEO, currently has more than 85 miles of WLL and serves the Outer Banks of North Carolina.

“We don't have DSL out here,” White said. “No cable. I'm the only broadband provider within 3,000 miles.”

He's been offering service for about a year and now has 100 subscribers. White launched with about $50,000 in radio advertising, but finds word-of-mouth one of the best techniques.

Most customers opt for the 256K service at $50 a month or 512K at $100. Companies can get T1 speeds for $700 a month. A tiered system is much easier than charging by the megabyte, White said.

“That's too much math, and you spend your time counting pennies,” he said.

White recently lured the local Ramada Inn away from another ISP. The hotel had been paying $4,000 a month for Internet access.

“I said, give us free rooftop access, and we'll give your back office free access and split the revenue on all the rooms,” White said.

Another potential revenue source is the pricey rental homes in the area.

“They're putting this in the house as an amenity to appeal to the corporate mindset,” White said as he prepared to install a house that rents for $18,000 a week.

White uses the BreezeCom frequency-hopping system on 2.5GHz unlicensed bands with unlicensed 5.8GHz backbone. All of the licensed bands in the area belong to Sprint, although none is being used, he said.

“They'll sell it to you for the price of a country,” he added.