An exclusive Interview with Jason Ashton, CEO, BigAir

An exclusive Interview with Jason Ashton, CEO of BigAir, a WiMAX service provider in Australia

An exclusive Interview with Jason Ashton, CEO, BigAir
By Basharat Hashai, Market Analyst - Asia
Contact the author at Basharat@maravedis-bwa.com

Maravedis: Mister Ashton, could you share with us your BWA license history?

We applied for a carrier license in 2002 to the Australian Communications and Media Authority (ACMA), which is the spectrum government body here, and they have opened up the 5 GHz band under a Class License arrangement for fixed wireless services. Our fixed wireless network uses what is called Class License spectrum. We have been able to use that spectrum now for more than five years. We actually used the proprietary and 802.16a equipment for a number of years, and the 802.16-2004 compliant services have only been available since early 2007. Our proprietary services are very similar to our 802.16-2004 compliant services.

Maravedis: Can you share with us your BWA spectrum details?

At 5 GHz, we have access to more than 300 MHz of spectrum. There are two blocks. There is a block from 5475 MHz to 5725 MHz and another block from 5725 MHz to 5850 MHz.

Maravedis: How much was paid for the license?

No amount was paid for the license. We just pay annual telecommunications carrier license fees.

Maravedis: Is the license renewable?

With the 5 GHz class license, there is no time limit. It will continue into the future.

Maravedis: How many BWA/WiMAX customers do you have?

The overall number (including iBurst, proprietary and 802.16-2004) is approximately 10,000 customers. But on the 802.16-2004 front, it is only a small number right now because we have just released the service. For this service, we have around 100 customers so far and we expect to see a strong growth over the next 12 months.

Maravedis: Do you target both markets – business & residential?

In our early proprietary days, we targeted both markets, but now we only target the business market. We are not offering any of our 802.16-2004 compliant services to residential subscribers just yet.

Maravedis: So, all your customers are enterprise-type?

Yes.

Maravedis: Are they SMEs or large enterprises?

Our business customer is typically 25 to 250 employees. So, we can classify this as the mid-sized SME segment.

Maravedis: What growth do you anticipate for your fixed wireless offering for the next year?

Our overall number of fixed wireless services is expected to grow by about 100%. The 802.16-2004 compliant share of this fixed wireless business unit will grow very quickly, as most new customers are being connected to this network.

Maravedis: What type of services do you offer over your fixed wireless network?

We offer Internet, Private VPN, and layer 2 connections between offices and also DR (disaster recovery links) to major data centers.

Maravedis: Tell us about your fixed wireless broadband investments so far?

We have invested several million AUD in our network. We are a listed company on the Australian stock exchange. We raised close to seven million AUD when we were listed in 2006. There has been a lot of money spent on our networks. In the 12 months that ended 30 June 2007, our revenue was a bit over 9 million AUD.

Maravedis: Any other investments?

We have investments in RF engineering and planning.

Maravedis: Future investments and strategy?

We are probably going to spend 1 to 2 million AUD every year for the next several years. The future strategy is to build out our network into other capital cities and to continue to grow our subscriber base.

Maravedis: Which areas in Australia have been covered so far with your offering?

We are focused on the major capital cities. We have completely covered the three largest cities in Australia - Melbourne, Brisbane, and Sydney.

Maravedis: 2008 deployment plans?

We are considering building coverage in Adelaide and Perth. There is already some planning work that is going on.

Maravedis: Who are your equipment vendors for your proprietary and 802.16-2004 compliant services?

For proprietary networks, we used Motorola, Tranzeo, Smartbridges, and Proxim equipment. For our 802.16-2004 compliant networks, we have deployed base stations and CPEs from Airspan Networks.

Maravedis: How many Airspan base stations and CPEs have been deployed so far?

We have already deployed 25 base stations and more than 100 CPEs from Airspan so far.

Maravedis: Which other vendors are you involved with?

For backhaul, we use Motorola equipment. We do have an in-house billing capability. But we buy the billing platform from a local company. The name of the company is Inomial. The network management NMS and BSS/OSS is handled in-house.

Maravedis: Any partnership deals you are involved in?

For VoIP, we have partnered with a number of Australian VoIP providers including ASX listed MyNetFone (ASX: MNF). We provide the broadband network, and they provide the voice services on top.

Maravedis: Your major competitor?

We compete mostly with the major incumbent carrier (Telstra) and also the other major carrier servicing the SME and enterprise markets, which is Singtel Optus.

Maravedis: Brief us a bit about your Go-to-Market Strategy?

We sell direct and through the channel partners. Our channel partners include integrators, ISPs, IT resellers, and other major carriers.

Maravedis: How is your company positioning itself in the WiMAX space?

BigAir provides fixed wireless broadband services. We use 802.16d-2004 equipment that delivers symmetric broadband. It is pitched as an alternative to fiber optic and is superior to ADSL and cable. BigAir has not forayed into the mobile WiMAX market so far. The company may enter into the mobile WiMAX market at some later stage because 802.16d-2004 and 802.16e-2005 are complementary technology platforms and services. Although we are not going to foray into the mobile WiMAX market in the immediate future, we are indirectly involved in the mobile WiMAX market through our iBurst offering. The mobile WiMAX market is still very much in its early days because mobile WiMAX equipment availability and access to spectrum are not completely sorted out yet, whereas a 802.16-2004 compliant network is operating here today and ready to go. The 802.16-2004 compliant service opportunity is also a bit more mature, being just an evolution of the earlier fixed wireless access (FWA) markets.

Maravedis: You mentioned that you are indirectly related to mobile WiMAX. Can you shed some light here?

We partner with the company that offers iBurst mobile services and also another company that owns the mobile WiMAX spectrum in the capital cities. The company’s name is Unwired. Unwired uses Navini technology. The technology is proprietary. We use their network for mobile services, and we use our own network for fixed services.

Maravedis: So, what is the future trend going to be like in Australia? Will we see a  strong trend towards mobile WiMAX in Australia?

The mobile and fixed variants of WiMAX will co-exist. I think they will be very complementary. They are not competitive at all. The fixed version delivers a fast connection for the whole office, and the mobile version is more of a personal connection. When we go out of the office, we do not see 802.16d-2004 and 802.16e-2005 as being competitive. 802.16e-2005 is not an upgrade for 802.16d-2004. 802.16e-2005 is a different path and is for mobility, whereas 802.16d-2004 is for speed at a fixed location. We see both technologies having a very bright future.

Maravedis: Any latest WiMAX trends that you have noticed in Australia?

The trend is towards symmetric broadband. ADSL is not as popular now for businesses in Australia because it is asymmetric. There is a trend towards VoIP over WiMAX. Most businesses have already implemented or are wanting to implement VoIP, and even better if this can be done over WiMAX, which will eliminate the reliance on copper lines completely.

At this time in Australia, more operators are using 802.16d-2004. It is useful for ADSL replacement and can be used anywhere in Australia. 802.16d-2004 is used all over regional and metropolitan Australia, whereas 802.16e-2005 is relatively new. There are still question marks on when it will be available. The largest spectrum holder here in Australia is Unwired. Unwired does not have any commercial 802.16e-2005 equipment in operation as of today. Our business model is more suited to 802.16d-2004, which is why we use this standard.

The future trend in Australia will lean towards a residential WiMAX offering. There will be many more residential WiMAX subscribers because there are 20 million people in Australia but less than 1 million businesses.

Maravedis: So, how do you see the future of WiMAX in Australia?

I see the future being very bright. WiMAX is a unique technology that allows high-speed access to be turned on very quickly, whereas a competitor’s ADSL or cable or fiber are very expensive and take so long to deploy. The consumers will notice the benefits of the rapid provisioning of WiMAX once we make more WiMAX available. WiMAX will become very much a mainstream broadband technology and a real alternative to fiber.

Maravedis: Any hurdles for WiMAX proliferation in Australia?

There has not been much change in the frequency allocation. 3.5 GHz and 2.3 GHz spectrum was allocated six to seven years ago. There has not really been any change since then. There is talk of 2.5 GHz spectrum, but nothing as yet has been released. The spectrum allocation has been pretty much static in this country for some time now.

Maravedis: How satisfied are you with your own spectrum, and do you have any plans for acquiring additional spectrum?

We will look at any future spectrum auctions, but we do not have any immediate requirement. We are very happy with the spectrum that we use today.

Maravedis: One final question related to the OPEL project  in Australia. What implications can it have on the overall BWA/WiMAX market in Australia?

The OPEL project is a great endorsement for wireless broadband and WiMAX in Australia. A billion-dollar funding to deploy WiMAX infrastructure in Australia will definitely help in the development of the WiMAX ecosystem in Australia. There will be a positive impact on the business of small players like BigAir and Buzz Broadband. It is all part of the same message in terms of validating WiMAX as an alternative broadband technology to fiber, ADSL, and cable.

Maravedis: Thanks for the great interview.

Thanks and I enjoyed speaking with Maravedis.

Detailed BWA/WiMAX Analysis for Australia is available in “WiMAX, LTE and Broadband Wireless Worldwide Report 2008-2014

For more information you can contact the author. Basharat@maravedis-bwa.com

Wednesday, February 06, 2008 in Business  | Permalink |  Comments (0)