U.S. Wireless Broadband: U.S. Wireless Broadband: LMDS, MMDS and Unlicensed SpectrumLMDS, MMDS and Unlicensed Spectrum

February 17, 2000

Presented By:

Peter Jarich & James Mendelson

The Strategis GroupBroadband Information Services

• Telecom Information Services Since 1964

• Global Presence

• Publications in All Fields– Wireless Broadband

– Internet User Trends

– Branding & Bundling

– Competitive Telephony & Convergence

– Consumer, Financial, Technology Focus

• Online News Services

WHAT?

What Is Fixed Wireless? Why Is It Important?

The Wireless Local Loop?

• Fixed, not mobile.

• Not simply voice.• All you need is spectrum!

The Spectrum?

• Three emerging technologies.

• Individual characteristics.

• Individual costs.

Service Capacity Range Deployment Deploy CostsLMDS 150+ Mbps 3 miles very limited highMMDS 10 Mbps 35 miles sparse medium

Unlicensed 20 Mbps 20 miles limited low

The Importance?

• New Technologies• Living Examples• Major Carriers

• Real Drivers

WHY?

What is the Fixed Wireless Business Model?

Fixed Wireless Cost Structure

• 80% Labor Cost vs. 80% Equip. Costs

• “Backhoes Don’t Obey Moore’s Law.” - Tren Griffin VP Strategy, NEXTLINK

Fixed Wireless “Control Structure”

• Facilities Competition is the only option!

• Profit Control

• Service Control

• The Reality of the 14 Points

Resale

UnbundleLocal Loop

UnbundleT-1

On-Network

Profit Margins

Ser

vice

Con

trol

Wireless = Bundling (Practice)

Wireless Exceeds Expectations!

0%

10%

20%

30%

40%

Forecast Teligent Winstar

35% 35+%

25%

Bundling Take Rates

60 - 70 mi

MMDS Cell Site Migration

• Macro to Micro-cellular deployments.

• More spectrum per end-user.

• More bandwidth per end-user.

Cell Site Migration

5-10 mi

WHO?

Who has Launched Broadband Wireless Services and Where is it Available?

Local Multipoint Distribution ServiceHype Becoming Reality

• Urban & Rural

• Major & Minor PlayersNEXTLINK

HighSpeed.Com

MMDS - Wireless CableFollowing the Cable Model

• One-Way & Two Way

• Urban & Rural

MMDS - Wireless CableSprint & MCI WorldCom Battle AT&T with Nationwide Coverage

• ~200 Markets

• Rural & Urban

Operational

Non-Operating

Unlicensed Spectrum BroadbandThe Early Winner?

• 200+ Markets

• Rural Deployment

Multipoint

HOW MUCH?

What Revenues will Wireless Broadband Earn?

Forecast Assumptions

• Internet as Key Driver– current emphasis

– local phone service is ubiquitous

– new technologies and mission-critical voice

• Scope of Total Internet Market– 2003 Business Penetration = 74.1% to 91.8%

– 2003 Residential Penetration = 83.6%

– 2003 Access & Transport Revenues = $34.1 Billion

• Target Markets• 2000 - 2001 Launch Dates

Network Coverage - Business

0%

10%

20%

30%

40%

50%

2000 2001 2002 2003

LMDSMMDSUnlic.

Network Coverage (Households)

0%

5%

10%

15%

20%

25%

30%

35%

2000 2001 2002 2003

LMDSMMDSUnlic.

Broadband Wireless SubscribersBusiness Subscribers

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

LMDSMMDSUnlic.

LMDS 3872 14023 75363 155827

MMDS 3874 19334 125992 289340

Unlic. 5939 18601 65168 98599

2000 2001 2002 2003

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

LMDSMMDSUnlic.

LMDS 12097 47446 277534 607695

MMDS 42801 126082 598458 1152612

Unlic. 1943 12202 76669 199308

2000 2001 2002 2003

Broadband Wireless SubscribersResidential Subscribers

Service RevenuesBy Technology

$0

$500

$1,000

$1,500

$2,000

LMDSMMDSUnlic.

LMDS 25.23 101 596.36 1360.98

MMDS 29.78 115.82 697.05 1652.42

Unlic. 17.26 58.1 229.41 419.6

2000 2001 2002 2003

Mil

lion

s, $

2003 Total:$3.4 Billion

Broadband Wireless Market ShareBy Service

0%

1%

2%

3%

4%

5%

6%

PhoneInternet

Phone 0.01% 0.06% 0.40% 1.09%

Internet 0.26% 0.78% 3.40% 5.89%

2000 2001 2002 2003

WHAT DOES IT ALL MEAN?

What Conclusions Can We Draw?

U.S. Wireless Broadband Perspectives

• Wireless Broadband Is Here Today• Wireless Is Not Just Voice• Wireless Meets End-user Demand For

Bundles• Wireless Meets Operator Demand For

Revenue And Service Control• Revenues Are Growing Quickly And Will

Be Substantial!

U.S. Wireless Broadband: U.S. Wireless Broadband: LMDS, MMDS and Unlicensed SpectrumLMDS, MMDS and Unlicensed Spectrum

To Purchase: Tim Riordan (202) 530-7591

triordan@strategisgroup.com

Further Questions: Jamie Mendelson(202) 530-7589

jmendelson@strategisgroup.com

Price:$2,400 (pdf/html)

$2,900 (print)