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The Business Case of Broadband Wireless Access February 2001

The Business Case of Broadband Wireless Access February 2001. Rudy Leser Vice President Business Development e- mail: Rudy@floware .com. Early 2001 – New Environment. Equity market - on hold Vendor financing – very selective Slow-down in the Telecom market

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The Business Case of Broadband Wireless Access February 2001

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  1. The Business Case of Broadband Wireless Access February 2001 Rudy Leser Vice President Business Development e- mail: Rudy@floware.com

  2. Early 2001 – New Environment • Equity market - on hold • Vendor financing – very selective • Slow-down in the Telecom market • Growth of broadband – slower than expected • BWA CLECs business case – yet to be proven

  3. Strategic Focus is Shifting • Cash-flow • Better cost model • Slower broadband growth • Differentiation

  4. Trends In The Telecom Market The strong ones will survive Some CLECs’s business plans are faulty Review plans to improve ROI Financing squeeze

  5. Business Plan is Revisited • Capture quality customer base quickly • Generate revenues • Reach profitability faster

  6. BWA New Strategies – From Survival to Success • Focus on high density areas • Re-assess marketing strategy: • Leave behind buzzwords and hype • Strong focus on specific segments • Find stronger differentiating factors • Offer your segment what is really needed • Reduce initial investment and expand as you grow (Not a Slogan!!!)

  7. Focus on Your Segment • SME • Small business/soho • MTU • Residential

  8. Carriers’ Criteria for Choosing BWA Equipment 1 Maximize capacity of main asset: limited spectrum 2 Minimize initial infrastructure investment 3 Differentiated services – competitive advantages over incumbent 4 Support for licensed spectrum band

  9. BWA Differentiated Services Prioritized VLANs VLANs, VPNs Switched circuit voice on demand Assigned bandwidth for always on internet

  10. WALKair Meets Carriers’ Needs 1 Largest coverage capacity in the market 2 Modular base station – low initial cost 3 Enables flexible bandwidth per customer and differentiated services (QoS, SLA) 4 Supports all licensed bands (3.5, 10.5, 26 GHz)

  11. Commerical Deployments Europe: Cameron - Sakon Czech Rep. – CRA, GlobalOne Finland - Finnet Germany - Arctel, FirstMark, Star 21 Luxembourg - FirstMark. Norway - UPC Poland – El Net, TPSA, TPZ, Czeptel, Elterix. Portugal – Teleweb, Novis Russia - Sovintel Slovenia – Telekom Slovenia Spain – Abrared, FirstMark Norway Finland Russia Germany Poland Luxembourg Czech Rep. Slovenia Portugal Spain

  12. Commerical Deployments, CONT’D Asia China India – Gateway, STPI Philippines - Beltel, Digitel Africa Cameron – Sakon Gahna - SITA Nigeria - SITA Zimbabwe - Africom China Mexico Nigeria India Philippines Gahana Honduras Cameron Latin America Argentina - Telefonica Honduras - GlobalOne Mexico – G-Tel Uruguay – Rivizul Uruguay Zimbabwe Argentina

  13. The BWA Experience • Germany – major allocation in Q3/1999 • Hundreds of Base Stations • Very few end-user connected • Spain – allocation in Q1/ 2000 • Hundreds of Base Stations • Very few end-user connected • Portugal – Allocation in Q4/1999 • Tens of Base Station • Just started to connect customers

  14. Feeder Costs & access cost & Infrastructure Opex BS/CO / CPE Installation & comm. & . BS Installation & comm. & . Maintenance BS / CO CAPEX CPE CAPEX The CLEC Access Cost Model Per CPE link € 140 € 120 € 100 € 80 Euro per month € 60 € 40 Note:I. Monthly cost II. full capacity analysis € 20 € 0 BWA xDSL

  15. BWA Versus xDSL/ Unbundled Access Various cost comparisons show that BWA may cost from 5% to 25% higher than xDSL using unbundled access.

  16. CLEC: xDSL/Unbundling Advantages • Quick penetration with minimal investment • Lower cost mainly for basic services at high penetration

  17. CLEC: xDSL/Unbundling Disadvantages • Incumbent is owner of the infrastructureNo control of line quality , response time, maintenance, competition ... • Poor qualitywhen binder fill more than 20% ... • Limited service capacityonly up to E1, no symmetric traffic ...

  18. Conclusion: Unbundled xDSL for CLEC • Limited penetration – wire lengthe & quality • Very limited Service capabilities– BW & flexibility • Quality of Service is not guaranteed • Infrastructure owned by incumbent WALKair provides a carrier class , competitive solution, which is independent from the incumbent

  19. CLEC – Differentiation by BWA • Bandwidth higher than the incumbent's DSL • > 2 Mbit/sec symmetrical • Dynamic bandwidth per user allow offering peak rate based services, yet with committed minimal throughput. • E.g. committed 512 Kbit/sec and a maximum of 4 Mbit/sec • Combine with BR-ISDN

  20. Broadband Access:New Business Model Winners: BWA by new carrier, xDSL by ILEC, Cable provider Losers:xDSL by new carrier, Fiber by new carrier & ILEC 5 yrs cash flow ( in millions US$ ) 20 0 -20 New carrier xDSL Wireless Source: Ovum, September 2000

  21. Floware WALKair • Market leadership • Differentiated and advanced carrier-class services for SME & MDU • Powerful IP support • Extensive voice support • Highest cell capacity • Best product portfolio for all business market segments • Multi frequency bands: 3.5, 10.5 and 26 GHz

  22. Summary – The Business Case for BWA 1 BWA is the CLEC’s most suitable technology to access its business customers 2 BWA enables Differentiated services – competitive advantages over incumbent 3 With BWA the CLEC can Minimize initial infrastructure investment 4 BWA offers the CLEC a competitive cost structure

  23. “Broadbanding the last mile”Thank You www.floware.com

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