Rural Launch Buoys Hope for WiMAX in Crucial Coming Year
SANTA CLARA, Calif. -- The WiMAX industry may recall the battle of Rexburg as an early victory if it does emerge as a winner in the broadband wars. In that Idaho town of about 22,000 people, many in the hay, grain or potato business, 9.5 percent of those covered by one of the first commercial offerings of 802.16(e) are subscribing to portable wireless- broadband service, provider DigitalBridge Communications plans to announce next week, CEO Kelley Dunne said. The service was launched less than six months ago and is EBITDA positive, he said.
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“WiMAX is here. It’s not a pain point,” Dunn said Tuesday night. He spoke at a forum on the technology sponsored by the MIT/Stanford Venture Lab and the Silicon Valley Association of Startup Entrepreneurs. The theme of WiMAX boosters onstage was that 2008 will be the technology’s takeoff year, with commercial rollouts by Sprint Nextel and Clearwire scheduled and Montevina chipsets set for a midyear debut. “2008 is game-changing and the first real proof point” for WiMAX outside South Korea, said Rama Shukla, director of Intel’s WiMAX program office.
Chipmaker Intel promises that Montevina-powered laptops will do for WiMAX what its Centrino chips did for Wi-Fi. “There will be literally hundreds of notebooks coming on the market on the same day” with the Montevina launch, Shukla said.
Some Rexburg subscribers are so enthusiastic they make room in their cars for the 2-lb. pieces of Alvarion customer- premises gear, which they power from the vehicles’ cigarette lighters, Dunne said Tuesday night. He likened the gear’s bulk to that of “the old Motorola bag phones,” warning that Internet use while driving is dangerous. Rexburg, “our first deployment, is such a success, and we're seeing similar trends in our other markets,” Dunne said.
DigitalBridge “is passionate about serving small-town America,” which it defines as municipalities of 150,000 or fewer. The company provides its BridgeMaxx WiMAX service to Pocatello, Ida., Missoula, Mont., and Washington and Vincennes, Ind. It plans the next three to five years to add licensed spectrum to handle 150,000 subscribers in western, Midwestern and southeastern markets home to 22 million people, the company Web site said. But DigitalBridge is looking past country folk as customers. Each year 9 million visitors pass through its markets -- Rexburg, for instance, is a gateway to Yosemite National Park, Dunne said. Sell half of 1 percent of those travelers WiMAX day passes, and the business “becomes very compelling.”
Self-installation saves DigitalBridge money and pleases customers, Dunne said. It means “zero truck roll” and “instant gratification” for 75 percent of subscribers, he said. Dunne once worked for a CLEC where “the customers were calling us nine times to get one person turned up.” He said his company needs customer equipment costing less than $100 and device “cards at $50 or below.” Intel’s Shukla said WiMAX cards won’t send laptop buyers into sticker shock, since they won’t add $100 to a notebook’s price and will cost half of what 3G cards do, he promised. “In the best case, you can get Wi-Fi/WiMAX for the price of WiMAX today.”
Asked about the breakdown of Sprint Nextel’s national WiMAX partnership with Clearwire, and the absence of a permanent CEO at Sprint, Motorola executive Tom Gruba said that “Sprint is pressing ahead… It’s not stopping by any means.” The joint venture’s demise could be a favorable development, because competition can spur action, said Gruba, senior marketing director for the MOTOwi4 business. Dunne said Clearwire has achieved “tremendous success in the past few years,” taking close to 20 percent of the broadband business in some of its markets.
But “we are in a long evolution,” the general manager of Intel’s WiMAX program office, Sriram Viswanathan, warned in introductory comments. “This is not going to get done in a year or two years.” But Viswanathan was not talking long term -- in four years, 90 percent of mobile devices will be WiMAX-enabled, he predicted.
The Bay Partners venture capital firm is only starting to look at WiMAX investments after doubting how long it would take to recoup investments in startups, partner Sandesh Patnam said. Now the technology is at a “pretty good inflection point” and “hopefully we'll change” the firm’s abstemious outlook, he said. “This is probably a good time to look at things in the WiMAX ecosystem.” Entrepreneurs should go “where the value is,” not into “the plumbing,” Patnam advised. The challenge of enabling session handoffs between WiMAX networks, and between them and other wireless networks, opens opportunities for startups, he said.