The Broadband Market

Computers are increasing their speed every few months. Storage and memory have expanded significantly in the last few years. Despite growing PC processing power, communications pipes are too often limited in capacity. As a result, broadband speed requirements continue to grow more quickly than current connections to the outside world allow.

Other major factors are driving the explosive demand for broadband infrastructure. The first is the boom in Internet bandwidth. As more bandwidth becomes available, more applications will be developed, requiring even more capacity. Broadband growth in the past few years has been phenomenal. Internet traffic continues to grow at the astonishing rate of 200% annually. In the US alone, Internet users are estimated to include 42 million business users.

The second is the recent integration of data, video and voice services (convergence). Sales of digital devices requiring high-bandwidth capabilities are skyrocketing despite the current slowdown in the economy. Consequently, as the demand for bandwidth compounds, the usage of rich media, streaming audio and video, graphic and database files, and ASP-hosted applications also continues to increase. Also, as companies expand abroad, they create new needs to link offices worldwide fueling the corporate globalization trend.

Today, businesses are demanding instant high-capacity connectivity. Bridging that bandwidth gap places new demands on service providers. They need far greater capacity, and they need it deployed faster and more cost effectively.

Telecom providers have tried to respond to the forecasted growth by building out the nation's long-range fiber networks. Of the over 800,000+ commercial buildings in the US , only 3% of those have fiber. Laying fiber comes with enormous costs - more than $150,000 per mile - and often requires a long process of getting permission from landowners and government agencies responsible for the fiber path. The costs and time to lay fiber are significant factors that prevent the bandwidth revolution needed for today.

Breaking the "last mile" bottleneck with wireless broadband services is the cornerstone of this industry. Many consumers are unaware of their choice in voice, data and video service. The common belief among consumers is that these services are provided only by traditional "wired" companies. The current inability of the existing copper wire infrastructure to carry compressed data at true broadband speeds to a high-enough percentage of businesses has prevented those businesses from reaching their true capabilities.

Wireline technologies that could potentially meet the bandwidth demands, such as cable modem and DSL networks, have many obstacles to overcome in order to reach success: the high cost of head-end upgrades, long lead times to deploy, and a complex, slow and arbitrary service delivery process -- all of which the end-user pays for.

Broadband Wireless Market Overview   

The use of wireless technology for broadband delivery means absolutely nothing to most customers.  Customers care about services that are reliable and affordable, and that offer excellent value.  They care about the responsiveness of their service provider to their needs and the predictability and controllability of their costs. In a nutshell, customers want excellent service and no surprises.  Customers do not care about how the service is delivered 1 .  

Broadband Wireless technology is a tool, not an end in itself.  Wireless has always been an alternative for high-speed connections, but never has the range of choices been as great or the rate of innovation as rapid.  The world of broadband wireless and other fixed wireless connections deliver data rates from less than T-1 (1.5 Mega bits per second (Mbps) up to and beyond 155 Mbps.  These wireless connections serve the same function as wireline or fiber -- interconnecting public and private networks.

		Wireless broadband market is expanding very fast. According to Strategis Research – a telecommunications market research company, broadband market is projected to be $16.3 billion U.S. in 2004.  The subscriber base will grow to almost 10 million, according to Allied Business Intelligence - a market research company.
		Despite significant build-out of the Internet backbone during the past couple of years that has made bandwidth available to metropolitan area networks (MANs), RBC Capital Markets believes that a gap still exists between the MAN and the buildings it surrounds.  With less than 3% of buildings connected to fiber, a significant opportunity exists to bring bandwidth from the fiber to these buildings with broadband wireless technology to serve their occupants' growing information demands.
		At the end of the day, the ultimate driver for broadband wireless will be the speed and simplicity the technology provides to connect the world's insatiable appetite for bandwidth to an efficient fiber-optic network backbone. This applies to next generation mobile systems as well as fixed broadband wireless network access for businesses and homes worldwide.
		According to recent studies by Forrester Research , the U.S. business Internet access market will mushroom from $5.7 billion in 1999 to over $40 billion in 2003, as 55% of all enterprises get on-line with higher bandwidth services. Leading this growth is the high-bandwidth T1 through DS-3/OC-3 segment that is addressed by WiVo's solution.
	According to Frost & Sullivan's North American Broadband Wireless Access Services Market , released in March 2001, fixed wireless broadband service revenue will climb from $842.3 million in 2000 to $28.5 billion by 2007 Frost analyst, Michael Gao, said that "Fixed wireless technology is one of the few technologies that can go from an Internet service provider's fiber, all the way to the door, and is seamless across the entire metropolitan area. It's an ideal technology to bridge the gap between the fiber backbone and end users".
		Wireless is recognized as one of the lowest cost access solutions ( DataComm Research Company ), and leading industry experts agree that broadband wireless is a tremendous growth industry. Market researcher eMarketer estimates that by the year 2003, wireless will be second only to fiber as the preferred broadband Internet access method. By 2003, 27% of broadband business users will use wireless.
		Broadband applications (including Internet access, Virtual Private Networking (VPN), Voice/video-over-IP, CAD sharing, medical imaging, multimedia streaming, CD burning, thick client applications, data warehousing, etc.) demand increased bandwidth. The U.S. market for the IP-based VPN service alone is expected to soar to more than $13B in the year 2004 ( Frost & Sullivan ).