Wispers Taking over the Telecom Market

I have decided to take a combination of two topics, which includes development of wireless networking services and an analysis of service providers' market.

WISP stands for Wireless Internet Service Provider or an internet service provider that relies on wireless network technologies for providing of it's services. WISPs unlike previous ISPs in the past don't rely on the regional telco's branch physical medium for providing of it's services to the end users or it's privately used back-haul. With their own infrastructure in place, local ISPs are totally independent in forming of it's prices and services, thus making their role within the Internet services market very different from the times when ISPs had to negotiate their offering with the incumbents.

There are two main areas in which external infrastructure had to be used, the ISP's own back haul and connection to the end user. Connections between cities or wider regions were established using leased lines from the regional operator. The prices offered for these kind of services by the incumbents made it hard to offer any decent prized services to remote, country side areas by emerging ISPs. Existing equipment was too expensive to deploy and in many countries laws were protecting a monopolist position of the national PTT. These conditions made this part of the market reserved strictly for the regional telco. Development of wireless equipment for long range point-to-point connections made it possible for commercial providers to set up their own physical network very quickly and with far less deployment and maintenance costs than renting telecoms network. The other area, or connections to end users, can be described with a similar story. Incumbents were owning all network infrastructure in urban areas and any competition that wanted to have own network would need to build it. This task in urban areas is nearly impossible to accomplish without investing huge amounts that would not pay back in near time and this is where wireless technologies come in.

Two IEEE standards, 802.11 and 802.16 address wireless communication. 802.11 is describing local area, nearby communication networks and 802.16 addresses broadband wireless (used mainly for network back hauls now). There is also 802.15 used for so-called personal area networks or PANs which is of no interest for this topic. 802.16, or WiMAX standard is relatively new and tries to compensate the under-achievements of 802.11, especially in networks with large number of users. WiMAX networks are built using directional antennas and devices that conform to this standard, usually offering coverage range of tens of kilometers, per base station, and speeds comparable to DSL and similar services. These setups cost far less for deployment and maintenance than any cable solution and offer similar quality to popular technologies such as cable TV or XDSL. Proxim Wireless www.proxim.com, a wireless equipment manufacturer offers their WiMAX solution in the Tsunami line of products for around US $ 500 per end user, with declared speed of up to 25 Mbps and covering range of around 20 Km per base station. WiMAX is now tested by large equipment manufacturers such as Motorola in Tokyo, and already started to be implemented in some developing countries, like Mexico, where existing cable infrastructure is scarce. If deployment of WiMAX equipment is to take place in larger developing countries such as China or India it will give this standard major push, in development and price, making it even more acceptable. WIFI, on the other hand is a wireless network standard that has been around for years, and although superseded by most other protocols, like 3G or WiMAX it's still very popular. This is mainly because of the fact it has been widely accepted by OEM vendors and hardware for interfacing WiFi networks is already embedded in most modern computer equipment. WIFI is intended for small local area networks, and ranges