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WiMAX and the 700 MHz Auction: Peril or Opportunity for the Service Provider?
Mind Commerce LLC, Nov 2007, Pages: 150
On January 24, 2008, the FCC will auction off over 60 MHz of 700 MHz spectrum. Many technology pundits are calling this “the last beach front property” in wireless spectrum. Five separate bands of spectrum will be offered to qualified bidders leading to the potential for at least five separate 700 MHz service providers for any one location in the United States. Earlier auctions of 700 MHz spectrum in 2002 and 2003 awarded 243 licenses. Of note, one license winner, Aloha Partners recently sold its 700 MHz licenses to AT&T for $2.5 billion. The filing deadline for this auction is December 03, 2007.
This study presents an overview of the auction for potential bidders. The five separate bands of spectrum should appeal to a variety of auction participants. Of note, 734 licenses are for sale in what the FCC calls Cellular Market Areas (CMAs), the smallest geographic markets which should appeal to rural telcos and local wireless internet service providers (WISPs). Minimum opening bids for these are in the tens of thousands of dollars for some rural markets putting them well within the reach of smaller operators. In addition, bidding credits are available to small and very small businesses. At the other end of the spectrum is one national license which some analysts expect to generate intense bidding between Google, AT&T and possibly a host of deep-pocketed national telecom service providers (Comcast? Echostar?).
The question for any potential bidder should be “what’s the business case for 700 MHz?” This study lays out a technology and business plan for the operator using WiMAX. The study delves into objections for using WiMAX at 700 MHz including channel sizes and propagation concerns. The use of WiMAX in the 700 MHz bands may eclipse Sprint Nextel’s Xohm and Clearwire’s 2.5 GHz strategy in presenting the most adaptable wireless technology in what is arguably the most adaptable spectrum.
Written by WiMAX pioneer Frank Ohrtman (WiMAX Handbook, WiMAX in 50 Pages, consultant on some of the first telco deployments of WiMAX in the Western Hemisphere), the paper describes the potential for WiMAX in the enterprise in terms of the “3 A’s”: access, applications, and affordability. Access refers to a brief description of the technology of WiMAX and how it is the most cost effective means of delivering a wide range of cutting edge telecommunications as low cost substitutes for traditional T1 and switched voice. Applications include the generic offerings that would apply to any business subscriber such as disaster recovery, converged voice and data as well as E1/T1 substitutes. Specific applications contained in the paper focus on industry verticals such as WiMAX for transportation, petroleum, utilities, agriculture and healthcare. Finally, “affordability” refers to how WiMAX for the smaller service provider presents a very short return on investment via low CAPEX, OPEX and expanded ARPU.
Given the decline in landline telephone service in favor of mobile voice, mobile data is expected to follow a similar trajectory and WiMAX presents a much more cost effective means of delivering that basket of services than 3G cellular, making it the obvious choice for the enterprise to replace their expensive legacy T1 overhead. This paper is a “must read” for any service provider seeking to break out of the confines of their existing markets.
Author Info:
Frank Ohrtman has almost 20 years experience in VoIP and wireless applications. He is the president of WMX Systems, LLC, a Denver, Colorado-based consulting and systems integration firm. Mr. Ohrtman learned to perform in-depth research and write succinct analyses during his years as a Navy Intelligence Officer (1981-1991) during which he specialized in electronic intelligence and electronic warfare. He is a veteran of U.S. Navy actions in Lebanon (awarded Navy Expeditionary Medal), Grenada, Libya (awarded Joint Service Commendation Medal), and the Gulf War (awarded National Defense Service Medal).
His telecommunications career began with selling VoIP gateway switches for Netrix Corporation to long distance bypass carriers. He went on to promote softswitch solutions for Lucent Technologies (Qwest Account Manager) and Vsys (Western Region Sales Manager). His consulting clients include national governments and tier one telephone companies.
Mr. Ohrtman is a Gerson Lehrman Group Scholar and serves as Dean of WiMAX for Applied Learning Solutions (http://www.e-als.com). He is a regular blogger and contributor to WiMAX.com and annual presenter at WiMAX World as well as local Cisco Users Groups. Mr. Ohrtman serves as an advisor to Bush Telecommunications Pty Ltd and the Rural Broadband Consortium of Australia.
Mr. Ohrtman holds a Master of Science degree in Telecommunications from Colorado University College of Engineering (master's thesis: 'Softswitch As Class 4 Replacement-A Disruptive Technology'), a Master of Arts degree in International Relations from Boston University and a Bachelor of Arts, Political Science, from University of Iowa
This 150-page presentation was developed through years of experience with WiMAX implementation and operation coupled with analysis of the potential for 700 MHz. Frank Ohrtman is one of the very few consultants to shepherd successful, incumbent telephone companies through WiMAX deployments. He brings a depth of knowledge and insight that is rare and exceptionally timely for this auction. Among other insights, Frank has a profound vision for the broadband wireless applications that justify investment and will provide a compelling business case.
This presentation is a 'must have' document for anyone seeking guidance concerning the potential for 700 MHz and the opportunities and pitfalls associated with the auction. Purchasers at the Company-wide level for this publication also receive a one hour of complementary telephone consultation from the author to allow the organization to ask questions and seek further guidance.
Ignore 700 MHz WiMAX at your peril !!
Target Market
- Incumbent telecom service providers
- Potential new broadband wireless service providers
- Investors in the broadband wireless space
- Vendors
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