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By Timothy Sanders
Gathering data on fixed wireless
service providers is like fishing for minnows
with volleyball net. Documented sources aren’t
adequate to the task, and that includes published
statistics from the Federal Communications Commission.
This survey of the top U.S. broadband
wireless service providers (see Table) was composed
the old-fashioned way, through phone calls to
the service providers themselves.
While this article ranks service
providers by the number of wireless subscribers
they have, clearly other measures could have been
used. Note that the number of wireless subscribers
is a different measure than the total users served.
The list was devised to create
a snapshot of the industry. It doesn’t imply
a competitive ranking, since most of these operators
compete with their local incumbents rather than
each other.
It’s hoped that such a list
may paint a clearer picture of the status of broadband
wireless service providers in U.S. markets.
A Disparate Lot
The broadband wireless service providers queried
for this survey were a disparate lot, including
municipal plays, electric utility companies, telcos
and private companies.
Sprint and Clearwire may have
the largest number of subscribers, and sources
agreed with the estimates given in the Table.
However, I was unable to confirm subscriber counts
with these companies (see sidebar, “Methodology”).
The survey focused on companies
offering service using broadband fixed wireless
technology. Some firms, including Ricochet, Clearwire,
Evertek and Rioplex, offer mobile capability.
If the technology had fixed wireless applications
and was not clearly cellular, the operator was
included in the survey.
I excluded companies whose customers did not receive
direct last-mile wireless service, such as multiple
dwelling unit and multiple tenant unit subscribers.
Wireless cable TV subscribers were not included
in customer counts.
Most of the firms listed in this
survey are privately held and funded by angel
investors. Results also showed a heavier representation
of fixed wireless service providers in the western
part of the United States.
A Question of Numbers
Anecdotal reports of a company’s wireless
subscriber numbers, as reported by regionally
adjacent companies, did not always jibe with the
verbal confirmations that service providers gave.
Several things could account for this. The industry
appears to be growing briskly, so companies may
have grown faster than their peers estimated (many
admitted they weren’t sure). One person
related that he was deliberately understating
his company’s subscriber count.
I could not reach everybody and so reported anecdotal
estimates in those cases. Some firms were unable
to confirm subscriber counts and asked specifically
to use my estimates. Others confirmed ranges only.
One provider with more than 1,000
subscribers is currently in bankruptcy protection,
although hoping to emerge from it soon. I left
that company in the list because its customer
count is, by all reports, still growing.
Defining Success
I used subscriber count as a simple ranking mechanism.
However, a company’s financial success can
be based on lower subscriber numbers but higher
ARPU (average revenue per unit).
No better example of this can
be found than with the last company on the list,
Trillion Partners, the sister company of Trillion
Digital Communications. Trillion Partners follows
an educational, medical and governmental customer
model. Its 400 active accounts generate sales
of around $4 million — considerably more
than some firms with much higher subscriber counts.
In a similar vein, Lubbock, Texas-based
Blue Moon Solutions has 686 connections. Three
of those connections involve University mesh systems,
where billing is based on the number of users.
If the additional 7,000 users represented by those
connections were considered, Blue Moon would have
nearly 8,000 subscribers.
Business Models
There appear to be the two main camps in broadband
wireless. One is a mostly retail customer play.
The second is geared around premium high ARPU
services. Some firms include additional services
(not just broadband wireless subscriber revenues)
in their ARPU figures.
Firms that are listed with high
subscriber counts mostly serve consumer users.
This segment needs to be very efficient with their
business processes and must expand operations
to serve a mass market. Such retail plays often
generate other revenue streams besides broadband
wireless, such as telco services, dialup access,
DSL, cable TV, fiber connections or electric service.
Rural companies typically operate in the retail-oriented
consumer market and lack the high ARPU generated
from business customers that sustain other firms.
High-ARPU firms usually are pure-play
broadband wireless firms. However, CommSpeed,
which uses broadband wireless technology to serve
rural subscribers, is one exception. CommSpeed’s
ARPU of $42 is noticeably higher than the $29.95
charged by competitors offering DSL service.
Prairie INet, which serves rural
markets with an ARPU of $71, represents a hybrid
case. Its consumer-to-business ratio of subscribers
is 75/25, with about half of its revenue coming
from business customers.
The premium ARPU camp is led by
several firms. TowerStream is widely recognized
as an industry leader. Its 1,000 subscribers puts
it near the bottom of this list, but it might
be listed differently based on revenue. TowerStream
does not disclose its ARPU but its business base
is the enterprise market and major universities,
providing wireless T-3 and OC-3 replacement services.
Other firms that take the high
ARPU route are Trillion Digital Communications,
NextWeb, airBand, TransAria, Stonebridge, SpeedNet
and U.S. Wireless Online.
Some firms on the list (such as
Prairie INet) are profitable, but others are not.
But that may not be the end of the matter. One
view among service providers is that you cannot
achieve high growth without carrying a burn rate.
Talk to Us
Likely several deserving companies missed the
list because I could not find them. Ultimately,
this list should generate more questions than
answers.
II hope that companies, especially
any inadvertently skipped, will contact me with
corrections and additional information.
The industry needs dialogue regarding
its size, potential and strategies. Such knowledge
perhaps will lead to greater investment and growth.
For additional information contact:
Neil J.
Mulholland, Prairie iNet, 515/440-0848, ext.
106
About the Author: Tim Sanders
is founder of TheFinalMile, Inc., a fixed wireless
consulting group. His experience came from running
a multistate wireless ISP. He can be reached at
tim@thefinalmile.net or 828-253-0702.
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