Broadening wireless' horizon: Sprint's broadband wireless plan takes off
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As impatience with the pace of high-speed Internet service deployment increases, fast-to-deploy broadband wireless has become a hot niche for large carriers and other Internet-related companies to explore.
With what might be its last big takeover toward this end, Sprint last week bought Nashville Cable Joint Venture in Nashville, topping off a list of broadband wireless companies it has claimed during the last year. With sufficient spectrum at stake, the carrier is ready to make its broadband wireless network a reality.
Sprint plans to go after residential users, telecommuters, the home office market and small and medium-sized businesses. Unlike other broadband providers, it is not limiting service to certain neighborhoods or business districts. Sprint plans to roll out high-speed broadband access to 20 cities by the end of the year.
"The world needs multiple ways of getting [content] to businesses and consumers," said Rob Norcross, a vice president with Mercer Management Consulting. "The issue is not [which technology] will win or lose or who is better or worse. We have at least four or more telecommunication companies who want very much and need direct access to customers."
Competition in the broadband sector has heated up. During the past year, multichannel multipoint distribution service (MMDS) has received much attention from MCI WorldCom and Sprint. Pre-merger, the two companies went head-to-head over the spectrum, which is expected to experience exponential growth for data delivery in the future (see figure).
Together, Sprint and MCI WorldCom have invested nearly $2.3 billion in the MMDS spectrum and operators.
Once the merger is finalized, the combined company, to be called WorldCom, will have an MMDS market that could reach 60 million homes.
"Whatever it takes to make it happen, the big players are ready. They are not concerned with cost performance; they are more focused on the strategic needs of their company," Norcross said.
Microsoft is another company strategically focusing on broadband wireless. It is investing in broadband to help service providers deploy new services, said a company spokeswoman.
Last week, Microsoft teamed with several other investment firms, including Cascade Investments and Credit Suisse First Boston, to invest $900 million in Winstar Communications. The money, $250 million of which was contributed by Microsoft, will fund Winstar's business plan and expand its broadband wireless network.
Microsoft also invested $200 million in Teligent last November, to expand that company's local broadband networks across the country and worldwide.
Sprint's foray into the world of high-speed Internet service has opened an additional opportunity. The broadband wireless connections it has secured will serve as an enabler for its Integrated On-Demand Network (ION). It is free from the limitation of copper wire so it can roll out services independent of local telephone companies.
Sprint ION, which is starting to bear fruit in the form of paying customers, offers local and long-distance voice service, high-speed Internet access and other data services over a single connection.
The combination of ION and wireless local access will be particularly important in winning small and medium-sized business customers. Thus far, Sprint has launched ION for small businesses in only three markets: Kansas City, Mo., Denver and Seattle. The company describes those areas as highly desirable for growth prospects and acceptance of new technology.
Moving quickly beyond those markets will require a wireless element. Currently, Sprint is focusing most of its efforts on developing flat-rate packages for small and medium-sized businesses, said Todd Townsend, director of small business for Sprint ION and data services.
"What small businesses have told us throughout this whole process is that they want simplicity," he said. "Because they're smaller companies, they can integrate technology faster, but they don't necessarily have the expertise on staff to do it."
In addition, the company will use ION to provide other enhanced services. "We believe ION provides a terrific platform for us to expand into other applications," Townsend said.
Those applications already are finding use in the large enterprise market, where Sprint is finding most of its initial ION customers.
Late last week, the company unveiled a roster of clients that range in size from $100 million in annual revenue to $85 billion in annual sales. Among the biggest fish to fall in the ION pan is Minneapolis-based relocation |giant Beltmann North America Company, which will use ION to connect multiple locations across the country.
Though Beltmann has yet to initiate service across ION, getting a company that size under contract certainly is a plume in Sprint's cap. Sysco, the giant food distribution company, also has decided to use Sprint's ION, replacing much of its frame relay network and putting its virtual private network on the same platform.
"E-business gets a lot of attention, but we're here to enable critical functions," said Greg Gordon, director of enterprise offerings for Sprint.
Sprint also announced that Complete Business Solutions Inc. and Synthes Medical Device have signed onto ION. CBSI, a Detroit-based IT consulting firm, is using some advanced capabilities of ION, including dynamic bandwidth allocation, to support its 4000 employees, who are often at customer sites.
"Here is a great example of how converged network services can be used," said Gordon, noting that CBSI has four locations fed by DS-3 circuits and 20 with multiple T-1 lines. "I think that these are the kinds of customers that are accustomed to having a sprawling and wide ranging set of assets."
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© 2009 Penton Media Inc.
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