(Originally posted at http://www.von.com/blogs/guest/2009/03/unlicensed-spectrum-wi-fi-opportunity-or-threat.aspx )
Having been on the bleeding edge of wireless for the past nine years, it is gratifying to finally see a major market disruption move from the theory to reality.
I have noticed that the industry is largely clustered around two ends of the spectrum (no pun intended). There are the “cellular” guys, who maintain that licensed spectrum, cell towers, and complex cell planning are all required to deliver robust, wireless service to their subscribers. And there are the “enterprise” guys, who have embraced unlicensed spectrum, low-cost APs, and ad-hoc deployments to deliver wireless service to their clients.
But finally, the line is blurring.
It is now impossible to deny that one can deliver superior customer performance at a fraction of the cost using Wi-Fi. There are very interesting upload, download and latency figures based on millions of worldwide SpeedTests. Their conclusion: “Overall, we found that Worldwide 3G average download speeds to be 956 Kbit/s versus upload speeds of 153 Kbit/s and a 484 ms latency. This compares to average free Wi-Fi network speeds of 2,502 Kbit/s download, 774 Kbit/s upload, and 205 ms latency clearly demonstrating the superiority of Wi-Fi network performance. See our summary chart for additional details...”
Leaders in the cable industry are now moving rapidly into delivering a quad play for their subscribers. Cablevision, a leading MSO, is rolling out a reported 18,000 outdoor access points across its footprint in New York, New Jersey and Connecticut. Why? Verizon, the nation’s largest wireless carrier is moving into Cablevision territory with its own home Internet and content delivery called FiOS. So, unencumbered by the need to purchase expensive spectrum, or the burden that handset subsidies place on carriers, Cablevision has changed the rules of the game. And how are they doing head-to-head? According to a report from market research firm Dell'Oro Group, “Optimum Wi-Fi contributed to “more than 70 percent sequential growth” in Cablevision's net subscriber additions in the fourth quarter of 2008, “a rate higher than any other cable operator in North America.”
And others, like Comcast, have begun rolling out their own trials.
Embracing disruption, just as they did with VoIP only a few short years ago.
In the United States, AT&T is a great example of a traditional wireless carrier that “gets it.” Faced with the challenges brought on by the success of the iPhone and the stresses the mobile Internet were placing on its 3G network, AT&T went out and added wireless data capacity nationally by spending $275 million to acquire Wayport. This gave AT&T an instant data network capacity upgrade at 20,000 locations where people congregate across the country. And are they done? Not if you listen to Greg Williams: “You can think of Wi-Fi as a giant offload point for wireless data traffic. Look at the growth in smartphones and data traffic, and it’s pretty clear that Wi-Fi can be a real plus to AT&T.”
An interesting contrast is Verizon, where the old school cellular perspective has meant clinging to the status quo. Recently, this manifested itself in their signing an exclusive deal with RIM for the Blackberry Storm that shipped without Wi-Fi. The blogosphere lit up over this, as people revolted over not being able to leverage Wi-Fi, even at home or the office.
In the face of competition, leading cable companies see Wi-Fi as an opportunity to deliver a true Quad Play for their subscribers. (In fact, my colleague, Dave Park, will be discussing that topic at a few upcoming events including The Cable Show, NAB and a webcast).
AT&T sees Wi-Fi as an opportunity to add low-cost data capacity at better than 3G data rates.
Verizon sees Wi-Fi as a threat and doesn’t even allow it on a cool, new Blackberry.
Which are the disruptors and which will be the disrupted?
That’s my .02!
Martin Suter
Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.
