700 MHz WiMAX

As I compile an analysis of the over 200 approved bidders for the 700 MHz auction (24 JAN), I cannot but notice a preponderance of rural service providers (telcos, ISPs, cellular, WISPs).

A check of their respective web sites reveal a universal struggle to offer triple or quadruple play of services from disparate networks which weren't cheap to build out.

A number of those bidders got 700 MHz licenses in the last 700 MHz auctions and are now in a position to double their spectrum from 12 MHz to 24 MHz which negates a recurring objection to the applicability of WiMAX to 700 MHz being that the bands were too skimpy to be realistic for a major service provider. I'm going to avoid the TDD v. FDD discussion here.

A funding brew of auction bidding credits (up to $40 million for some), RUS and USF cash will drive the boom. Did I mention federal per-line subsidies? That is, Uncle Sam pays providers a per subscriber line subsidy. My point being is that these service providers are not as beholden to Wall Street as others (think Sprint Nextel's recent executive troubles) and have a much longer leash when it comes to innovation.
  
Then there is the performance of WiMAX at 700 MHz. One base station, topography permitting, has a 1,000 sq mile coverage zone-or one Iowa County. Depending on over subscription rates, that one base station may service 1,000 (that would comprise a generous take rate in that Iowa county).  Given the low cost of WiMAX base stations relative to FTTH or even DSLAMs, the cost per sub is very attractive.

Finally, there is the Holy Grail of a quadruple play of services on one infrastructure. In short, while xohm may set the standard for mobile broadband in the urban/enterprise market, rural service providers could be the real innovators in WiMAX using 700 MHz spectrum.

Frank Ohrtman
WMX Systems

Friday, January 18, 2008 in Business  | Permalink |  Comments (4)