so wimax is going to come out an school all other WISP/ISP’s…is that correct? If so i have a few questions that some of you may already be into…
how do we get out foot into the wimax market? if its truely what will kill everything what stops us from getting into the technology before everyone else does?
how long until wimax is public?
what are we looking at for cost?
WiMax will likely be in licensed frequencies as the power levels are way beyond what unlicensed will allow. I would not expect to see WiMax seriously rolled out for another 2-3 years. It will be expensive to deploy.
As AJ and I have mentioned, if you do not have an exit strategy, you need one. Ours is to build a strong business customer base so that when the big boys are ready to go, they will look at us as an instant customer base to launch WiMax.
It’s all about revenue. Build as much revenue as you can as fast as you can - keep the debt low and profits high. Be ready when they come knocking.
so you dont think it would be possible for a smaller company to launch wimax?
Hard to say, I think the licensing will be the real stumbling block. Sprint is sitting on most if not all of the old MMDS channels. There might be a few others available but they will be expensive and that prices most of us out of the market.
Then there is the cost of the equipment, and I’m guessing it’s not going to be cheap (I consider Canopy to be cheap for what it does). The AP’s will be very very expensive and the potential for revenue very very low. It’s hard enough to compete against residential DSL now, it’s just going to get worse. 12.95/mo for Yahoo DSL? I’m not even going to try.
I could be wrong, but I don’t think so. I think the smart move is to start to position your company for sale in 2-4 years. If it turns out that I am wrong and that WiMax is easy to obtain and deploy, you will be in a good position for funding.
I totally agree with Jerry, position yourself for the big boys, they will be looking for a customer base.
There are 2 flavours/stages of wimax the -2004 or fixed wimax and then the 16e mobile wimax.
Fixed wimax is in the market and for all intense and purposes is exactly like Canopy. Except it works to a standard protocol and has higher bandwidth. Uses OFDMA with 256 channels.
You don’t need to worry about this, as I can’t see the big boys rolling this out, as most of them have wired networks and it doesn’t make sense. A new WISP like us (small kid) may decide to go with it because he starting today and needs to look at what is the best product in the market.
Mobile WiMax this is a different story, as you get handoffs, on the move, uses SOFDMA, 2048 channels, 63MBs, but the key thing is mobility. Now what will drive the deployment of mobile wimax AP’s is when there is a large potential market. The CPE cost is extremely cheap and all new laptops and handhelds start shipping with WiMAX as they do with wifi today.
This is 3-4 years away, as if Intel today start shipping new processors with wimax built in, it will be another 2-3 years before wimax becomes common place and then providers will start to roll it out. Ofcourse they will start to play around much sooner then that.
As Jerry said, the cost of the license and also the equipment will price you out.
To answer your question of why a small guy can’t do it, if you want a cell phone would you go to a guy who can only give you coverage in a 2000sq mile area, or would you go with someone who covers the whole country and you can use your phone anywhere. Once this kicks off, it will be about quality of service and coverage, hence that is why a small guy can NOT really compete on this. Do NOT try to think you will compete against the big boys with WiMax, they will be coming for total dominance.
Build a good customer base and an indepth knowledge, start to work with current big boys, we work very closely with large telcos, hoping that when the time comes they will just pay us, buy us out and if we want we can still run the wireless/wimax division for them.
vince wrote: so you dont think it would be possible for a smaller company to launch wimax?
Vince, it is unlikely. The big guys never got involved in the WiFi and other wireless markets because they ran on unlicensed spectrum and that meant 'anyone' could compete with them. WiMax was designed from the ground up to run on Licensed spectrum. QOS protocols that have to be used in unlicensed spectrum do not exist in WiMax. Sprint and most of the other large carriers have already jumped on the Intel bandwagon with hundreds of 'billions' of dollars to start building Intel based Wimax systems.
WiMax is a big deal to the cell companies as they have been paying Qualcomm through the nose for years ( Qualcomm owns the patents on CDMA , used by almost all cell phones ). With Intel and WiMax they get to join the ISP business and they don't pay royalties to Qualcomm for CDMA anymore.
Even Qualcomm , who at first tried to fight WiMax with it's own offerings, has pretty much thrown in the hat and announced they will likely enter the WiMax industry as a Chip Maker...
There are a few companies working on Unlicensed WiMax hardware but they say that unlicensed WiMax will be hard or impossible in unlicensed spectrum because of the way WiMax works.
why would one of the big boys pay millions to buy out our network when they can slam us with much faster speeds and better prices and just steal our customers?
It may not be millions. Depends on how many customers you have and the ARPU. Covad wanted to get into the wireless game. When they did, they paid 36M for NextWeb Wireless’s 3000 Business customers. Why? Instant customer base with high ARPU.
The bigger companies have to answer to their investors. Investors want security. A pre-existing customer base is worth it’s weight in gold when trying to sell a new idea to conservative investors.
If you have 50 customers they are not going to pay much attention. If you have 500 you will get bought. The key is to have your ARPU as high as possible.
Here is an example of what your company could be worth with an ARPU @ 49/mo and 129/mo:
500 subscribers
49.00 ARPU
24,500 monthly revenue
294,000 annual revenue
X3 = 882,000 (could be less, could be more) + something for infrastructure (won’t be much)
500 subscribers
129.00 ARPU
64,500 monthly revenue
774,000 annual revenue
X3 = 2,322,000 (could be less, could be more) + something for infrastructure (won’t be much)
BTW I think 10x revenue is very optimistic. I hope I’m wrong 
It’s hard to say what the real value will be because the industry changes so fast.
vince wrote: why would one of the big boys pay millions to buy out our network when they can slam us with much faster speeds and better prices and just steal our customers?
If you are big enough to be a thorn in their side then they might buy you. Otherwise they will just stomp you out. Then again, someone looking to become big enough to be bought by one of the big boys might start buying up smaller WISPs just to boost their numbers. Look at Clearwire. A while back they was buying every WISP they could get their hands on for the sole purpose of boosting their subscriber numbers before they went public.
Interesting tidbit. Motorola and Intel invested just short of a billion dollars in Clearwire. But not because of the number of subscribers Clearwire had ( Clearwire was actually in massive debt from buying all those WISPs to boost their subscriber numbers) what Clearwire does have,,, they own more WiMax usable licensed spectrum than anyone. Intel, Motorola, Sprint, Nokia, AT&T, and every other major player on the planet are betting on WiMax.
I have talked to some guys that believe Motorola/Clearwire will start buying up Motorola based WISPs. No idea why they would do that. A few are thinking that when the Satellite providers start feeling left out of the WiMax game that they will start buying up WISPs like crazy.
It's anyone's guess what is going to happen in the next three years.
Personally I think if you are in major city and your primary customer base is residential... better start working on your exit plan if you don't have one already or get the triple play rolled out. If you are rural or primarily provide bandwidth for businesses then your probably going to be ok for another four years or more.
buying a WISP is the quickest way, apart from the customer base, you get a team of people who know what is going on and are fully trained, know the market, customers, competition.
It decrease the ROI period, also a larger customer base strengthens your cashflow… and for a large company its all about cash flows as they can borrow (raise debt) against cash flows
10 x is not too optimistic… the value depends on many factors…
1. what industry you are in
2. whats happening in the industry
3. whose buying you
4. why they are buying you
5. customer base
6. employees
7. technologies/experience/skills/knowledge
8. TIMING
If you are at the right place at the right time…
I know its dream stories but so many .com loss companies are/were worth so much… its not about your revenue its about your potential revenue…
Jerry you need to raise your expectations and start planning now… I already know I want to be taken over by… and now I am aligning myself to make sure that happens…
We are already positioned. Right now we are building revenue.
Hey, 3-4x would be very very good
10x? Well, that could mean alot of interesting things…
well on a positive note if everyone is going to be building there stuff with wimax then that means we dont have to worrie about cpe"s just licencing and ap’s etc…
correct me if i am wrong but if you obtain a licence for that spectrum is it good for the whole country or just that area you cover cause if it is nation wide why couldn’t we form a buyers group obtain a licience and share that peice of spectrum within our local coverage areas?
kmeadows wrote: well on a positive note if everyone is going to be building there stuff with wimax then that means we dont have to worrie about cpe"s just licencing and ap's etc..
correct me if i am wrong but if you obtain a licence for that spectrum is it good for the whole country or just that area you cover cause if it is nation wide why couldn't we form a buyers group obtain a licience and share that peice of spectrum within our local coverage areas?
There are some that are national , some are regional ( east, west , central, great lakes etc...) most are areas that cover parts of a state like one action covered "LA, Riverside - Orange County" and surrounding area. Almost always they are 10 year leases.
The example I used above, for the area of LA, Riverside - Orange County, a single frequency slot in the FCC's advanced wireless spectrum auctions went for around $330 million. Some licenses for regional areas, East for example covering most of the eastern US , auctions ended between $570 million and $1.8 billion.
thats pocket change…
Also bear in mind that WiMAX is the 4th generation network… it is highlighed as the natural successor to 3G
vj wrote: Also bear in mind that WiMAX is the 4th generation network... it is highlighed as the natural successor to 3G
Not if Samsung has any say on 4G :
Samsung to Demonstrate 4G Cellphone Technology
By EVAN RAMSTAD
August 30, 2006 8:09 a.m.
SEOUL, South Korea -- Samsung Electronics Co. plans to demonstrate
so-called fourth-generation wireless phone technology capable of
exchanging signals much faster than most fixed-line broadband
services, such as DSL and cable.
Samsung says it has created mobile transmitters and receivers that
can exchange data at 100 megabits per second in a vehicle that's
moving up to 37 miles per hour. The company will also demonstrate
another system that can wirelessly exchange data 10 times faster than
that, or at one gigabit per second, at a fixed point. Broadband DSL
data moves at less than one megabit per second and most cable
broadband systems exchange data at a speed of about five to six
megabits per second.
Many cellphone operators are now in the process of upgrading to
third-generation, or 3G, technology. That technology, still in the
early stages of adoption by cellphone carriers, allows data to be
exchanged at a high enough speed to permit two-way video calls, for
instance. Samsung expects just 10% of the cellphones it manufactures
this year will be for 3G networks.
Fourth-generation, or 4G, technology offers the prospect of data
transfer at even higher speeds, allowing for services unavailable on
today's wireless networks or even through most of the broadband
services people now use with their home and work computers. For its
demonstration, Samsung equipped a small bus with a receiver that will
be able to simultaneously handle 32 channels of broadcast TV, a
two-way video phone call and Web pages. The company will hold the
demonstration at a conference it is sponsoring on South Korea's Jeju Island.
Samsung said the technology meets the International
Telecommunications Union's definition of 4G cellphone technology.
Earlier this year, Japan's NTT DoCoMo Inc. set its own 4G benchmark
when it said it had transmitted data at 2.5 gigabits per second in a
slow-moving vehicle in a research setting.
Another high-speed data technology called mobile WiMax is emerging
from a group of companies led by Intel Corp., and can work for both
cellphones and computers. Earlier this month the group, which also
includes Samsung and Motorola Inc., signed Sprint Nextel, the
third-largest wireless operators in the U.S., to build a network
based on mobile WiMax, which offers data transfer speeds similar to
those found on existing fixed-line broadband networks.
The 4G technology being demonstrated by Samsung today will take
several more years to become commercially viable. A world-wide
standards body next year is scheduled to decide what part of the
radio spectrum will be used for 4G signals. No 4G services are
expected to begin until at least 2010.
There are/will be a number of contendors for the 4th Generation, at this moment in time, WiMax is looking like the most likely successor.
Remember its not always about the best technology, its about the biggest following, so unless Samsung can get alot of others in the industry to follow them I can’t see them being the next successor (I can be wrong).
However it does not change the message of this thread, which is to say that WiMax or an equiv technology is going to be deployed by the cell providers to directly compete with us