To Waterloo, Ont.’s Finline Technologies, which recently launched its new MMDS broadband wireless solution for the service provider market, telecommunications analyst Iain Grant has some simple advice: Go South, young company.
“MMDS is much bigger (in the United States) than it is (in Canada),” explained Grant, a managing director at The Yankee Group in Canada in Brockville, Ont.
What that means, Grant said, is that Canadian service providers looking to buy an MMDS (multi-point multi-channel distribution service) solution will likely buy whatever U.S. service providers are already buying because the unit costs will be lower.
For its part, Finline said it is looking to market its wireless technology world-wide. Dubbed Trilogy, the system uses MMDS frequencies in the 2.5 Ghz to 2.7 Ghz range. In Canada, where much of the spectrum was only allocated last March, Look Communications is the only notable service provider offering MMDS-enabled services, including digital television and high speed Internet.
The drawbacks to Look’s technology, observers say, is that MMDS is a shared-access frequency. That is, though Look may offer high Internet download speeds in the 10Mbps-level, it can often be spread out to hundreds or thousands of customers.
Finline’s Trilogy unit offers the potential for similar problems. Despite providing a healthy 30Mbps download speed, each Trilogy unit can also handle up to 2,000 modems. A user then could conceivably be stuck struggling along with Internet speeds as low as 15Kbps.
Finline’s president and CEO, Einar Fiskvatn, said his company has made measures to make sure this never happens.
“Thirty Mbps downstream service pertains simply to one sector of a system solution,” Fiskvatn said. “A supercell may consist of up to 12 or more sectors (equalling 360 Mbps). And obviously in a multi-cell configuration we can almost exceed any capacity that is required in a high-density area. It could be way beyond a gigabit.”
Trilogy also allows service providers to offer up to 16 tiers of service, ranging from telephone-line speeds of 64Kbps to 2.56Mbps. Finline says the cost of installation is approximately $800 to $1,200 per customer in a medium-density area with 10,000 to 20,000 customers.
Since its release in October, Finline has signed on to deploy the technology in Jamaica, and is having talks with companies in Japan. Fiskvatn said the company believes there is a potential market in countries outside North America where wireline infrastructure was never developed extensively outside the major urban areas.
Grant said the company may encounter a catch-22.
“The problem (with marketing in less-developed areas) is, if you have to pay your rent next quarter, you have to go out there and really seed demand,” Grant explained. “So yes, in theory the demand is larger, in theory the demand is more lucrative, but in practice it takes longer to tap.
“In Canada, there is less money on the table, and it’s dog-eat-dog (competition). On the other hand, the market is clamouring, saying ‘Please sir, may I have some more?'”
One of the unique things about Trilogy is that it was equipped to provision telephony services, along with digital television and Internet services. MMDS service providers have until now been stuck reselling other company’s long-distance services.
Fiskvatn said with Trilogy – which uses the guaranteed quality of voice over ATM rather than voice over IP – a wireless service provider can now step up to compete against the other local exchange carriers.
Grant agreed, noting that a company’s ability to take customers away from another service provider is enhanced if they have a voice solution.
“The fact that we all have voice services, and that the substitution of one voice service for another is relatively simple, that becomes an important ingredient,” Grant said. “What you have to look at as a last mile provider is a suite of services. No one service is going to ring your chimes or cash register. But if you start (selling) a suite of services, you start looking at a potential (revenue) per household in the hundred dollar range.”
