Posted 04/01/2001
Sprint Proves Out
MMDS Delivery Model
By Fred Dawson
Sprint Corp. (www.sprint.com) is scoring better than planned with its early rollouts of fixed wireless broadband service. Within the first two months, sales have topped 50,000 customers, according to one estimate.
The company won't confirm the number, though one official says that "it's a good guess." But the early signs are that Sprint's gamble on the relatively low-cost means of delivering residential high-speed data services over MMDS access networks was a good one. With 13 metro markets launched as of the early first quarter, on the way to 45 over the next year or so, the take rate has been a "bit surprising," says Evan Conway, vice president of marketing for Sprint's new Broadband Direct MMDS service (www.sprintbroadband.com).
"If you look at markets where we've been in business a little longer than elsewhere, like Tucson, for example, we're at 25 percent, sometimes more, of the current broadband market," Conway notes. And even there, and in Phoenix, where the wireless Internet service began under the previous owner, People's Choice (which merged with Sprint in 1999), Sprint didn't begin to seriously market the service until late in 2000, he adds.
Broadband Direct, essentially an ADSL-equivalent type of residential/small business service, is priced at $44.95 per month for residential and $199.95 for business access, both of which are bundled with EarthLink Sprint Internet services. The asymmetric system runs at 512 kbps, bursting to higher speeds in the downstream, and at up to 256 kbps in the upstream.
"In the initial markets we relied primarily on a web presence for any marketing, but now we're using the traditional means for reaching the hard-core consumer market," Conway says. These marketing methods include newspapers, direct mail, radio, and Sprint PCS stores, which "have been the surprise" in the marketing effort thus far. "Having a local presence on the street is turning out to be a real advantage," Conway says.
Sprint is relying on a single transmitter per market to reach all its MMDS customers, while offering the populace a wireline DSL option as well. "We're finding we're able to reach about 50 percent of the customer base with DSL and up to 80 percent with wireless, depending on the market," Conway notes.
Exceptions to this are heavily foliaged markets, including Detroit, where the company is only offering a business class wireless service, rather than trying to extend signal coverage into the residential market as well. Markets where the company has launched residential service, in addition to the two Arizona cities, include Denver and Colorado Springs, Colo.; Houston; Melbourne, Fla.; San Francisco, San Jose and Fresno, Calif.; Salt Lake City; Oklahoma City; and Wichita, Kansas.
All of these markets are served by technology supplied by Hybrid Networks Inc. (www.hybrid.com), which, like most wireless broadband systems, uses ATM as the transport mechanism in combination with advanced modulation schemes to deliver an all-digital signal over the 6 MHz channels set aside for data. Sprint anticipates moving to a more "cellularized" architecture, which will use multiple transmitters, to enhance coverage by year's end. But it is finding the single-transmitter approach to be a highly reliable means of delivering good quality service to anyone within line of sight of the radio tower, Conway says.
That assessment is echoed by Jim Yard, vice president of Andrew Corp.'s (www.andrew.com) Broadband Wireless Systems Group, and a veteran of the original People's Choice project in Phoenix. Having overseen Andrew's adaptation of the technological approach employed by Sprint in Phoenix, Yard is now spearheading marketing efforts for the Andrew's system, which is starting to gain a strong foothold in Latin America.
Costs of Internet-capable MMDS deployment permit operators to enter markets like Lima, Peru with services priced "hundreds of dollars per month" below "more costly, wired connections," say Andrew officials. And, like Sprint, Andrew's first commercial customer, World Wide Wireless Communications Inc. (www.worldwide-wireless.com), is seeing strong market response with its recent rollout in Peru, Yard says.
"We're seeing the type of backlog that you'd expect in the startup phase of any successful service," he notes. "World Wide is connecting customers as fast as they possibly can."
The technical platform, using a single, four-sector "supercell" to blanket the 2,300 square-mile Lima-Callao region, is living up to expectations, Yard adds. "Uptime for the service in Lima is running at three to four 9s, and coverage is 80 percent of the market," he says. "That's certainly better coverage than you'll get with DSL."
But while these are impressive numbers, they are being reached by Sprint and World Wide in areas with few impediments to line-of-sight connectivity. And, with only one transmitter delivering signals over a limited amount of spectrum, growing demand will force service providers to deploy more transmitters so as to be able to reuse spectrum across any given market.
Along with plans to add transmitters to increase coverage, Sprint is looking at other new techniques entering the market to boost its performance, including "near-line-of-sight" systems such as Hybrid's and most other vendors are preparing to roll out by mid-year, as well as "non-line-of-sight" technology under development by Cisco Systems Inc. (www.cisco.com) and a few others. Conway says Sprint also wants to be able to offer services based on distinct levels of quality of service, with the hope of eventually being able to offer voice over the wireless link.
Sprint's decision to move ahead immediately with current-generation technology rather than waiting for next-generation systems appears to have been a smart move, given the high take rates and levels of performance now being attained by the single-transmitter systems. One company that gambled on next-generation MMDS, namely, Nucentrix Broadband Networks Inc. (www.nucentrix.com), has been forced to push back its commercial rollout schedule this year pending further testing of its chosen platform, which is the vector orthogonal frequency division multiplexing (VOFDM) system developed by Cisco.
Nucentrix, with licenses in 87 Midwestern and Texas markets, including 58 of which that are already delivering wireless cable TV services, had planned to launch two-way Internet services in 40 markets this year. But now the company is re-evaluating the rollout schedule pending further tests of the Cisco system at the operator's trial site in Amarillo, Texas.
"We are impressed with the potential of Cisco's VOFDM technology and are encouraged by the test results to date," says Carroll McHenry, chairman and CEO of Nucentrix. But he makes clear that more testing and tweaking of system configurations is necessary to ensure the technology delivers what Nucentrix is looking for.
WorldCom Inc. (www.worldcom.com), too, is testing VOFDM and other new technology. But it's still weighing technology options as it awaits FCC licensing. Sprint chose to get an early start by using the existing licensing system to enable two-way communications over one or two channels in each of its TV-licensed markets.
