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1
The Business Case The Business Case of Broadband Wireless Access of Broadband Wireless Access
February 2001February 2001
Rudy Leser
Vice President Business Development
e- mail: [email protected]
2
Early 2001 – New EnvironmentEarly 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 ShiftingStrategic Focus is Shifting
Cash-flow
Better cost model
Slower broadband growth
Differentiation
4
Trends In The Telecom MarketTrends In The Telecom Market
Financing squeeze
Review plans to improve ROI
Some CLECs’s business plans are faulty
The strong ones will survive
5
Business Plan is RevisitedBusiness Plan is Revisited
Capture quality customer base quickly
Generate revenues
Reach profitability faster
6
BWA New Strategies – BWA New Strategies – From Survival to SuccessFrom 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!!!)
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Carriers’ Criteria for Choosing Carriers’ Criteria for Choosing BWA EquipmentBWA Equipment
Support for licensed spectrum band
123
Maximize capacity of main asset: limited spectrum
Minimize initial infrastructure investment
Differentiated services – competitive advantages over incumbent
4
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BWA Differentiated Services BWA Differentiated Services
Prioritized VLANs
VLANs, VPNs
Switched circuit voice on demand
Assigned bandwidth for always on internet
10
WALKair Meets Carriers’ NeedsWALKair Meets Carriers’ Needs
Supports all licensed bands (3.5, 10.5, 26 GHz)
Largest coverage capacity in the market
Modular base station – low initial cost
Enables flexible bandwidth per customer and differentiated services (QoS, SLA)
12
34
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Commerical DeploymentsCommerical Deployments
Norway
Czech Rep.
Finland
Spain
Russia
Germany
Portugal
Slovenia
Luxembourg Poland
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
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Argentina - Telefonica
Honduras - GlobalOne
Mexico – G-Tel
Uruguay – Rivizul
China
India – Gateway, STPI
Philippines - Beltel, Digitel
Commerical Deployments, CONT’DCommerical Deployments, CONT’D
Asia
Latin America
Cameron – Sakon
Gahna - SITA
Nigeria - SITA
Zimbabwe - Africom
Africa
PhilippinesIndia
China
Zimbabwe
Nigeria
Uruguay
Argentina
Honduras
Mexico
Cameron
Gahana
13
The BWA ExperienceThe 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
The CLEC Access Cost ModelThe CLEC Access Cost Model
Per CPE link
€ 0
€ 20
€ 40
€ 60
€ 80
€ 100
€ 120
€ 140
BWA xDSL
Eu
ro p
er m
on
th
Feeder Costs & access cost&
Infrastructure Opex BS/CO/
CPE Installation & comm. & .
BS Installation & comm. & .
Maintenance
BS / CO CAPEX
CPE CAPEX
Note: I. Monthly cost II. full capacity analysis
15
BWA Versus xDSL/ Unbundled AccessBWA 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 CLEC: xDSL/Unbundling AdvantagesAdvantages
Quick penetration with minimal investment
Lower cost mainly for basic services at high penetration
17
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 ...
CLEC: xDSL/Unbundling CLEC: xDSL/Unbundling DisadvantagesDisadvantages
18
WALKair provides a carrier class , competitive solution, which is independent from the incumbent
Conclusion: Conclusion: Unbundled xDSL for CLECUnbundled xDSL for CLEC
Limited penetration – wire lengthe & quality
Very limited Service capabilities– BW & flexibility
Quality of Service is not guaranteed
Infrastructure owned by incumbent
19
CLEC – Differentiation by BWA 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:Broadband Access:New Business ModelNew Business Model
New carrier xDSL
0
-20
20
Wireless
Winners: BWA by new carrier, xDSL by ILEC, Cable provider
Losers: xDSL by new carrier, Fiber by new carrier & ILEC
Source: Ovum, September 2000
5 yrs cash flow ( in millions US$ )
21
Floware WALKairFloware 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 BSummary – The Buusiness Case for siness Case for BWABWA
BWA offers the CLEC a competitive cost structure
123
BWA is the CLEC’s most suitable technology to access its business customers
With BWA the CLEC can Minimize initial infrastructure investment
BWA enables Differentiated services – competitive advantages over incumbent
4