The Business Case of Broadband Wireless Access February 2001

1
The Business Case of Broadband Wireless Access
February 2001

• Rudy Leser
• Vice President Business Development
• e- mail Rudy_at_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 CLECss 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, CONTD
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
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
• gt 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 AccessNew 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 CLECs 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