Wi-Fi Hardware and Chipset Sales (World-wide 2001-2007)
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Transcript of Wi-Fi Hardware and Chipset Sales (World-wide 2001-2007)
1Kenneth R. Carter
Wi-Fi Hardware and Chipset Sales(World-wide 2001-2007)
Sources: In-Stat/MDR, December 2002 & March 2003
9.6
18.4
28.8
44.4
60.2
74.9
8.8
20.6
33.3
51.9
72.2
86.5
$230$422
$567
$2,200
$2,800
$4,100
$404$527
$575
$2,900
$1,800
$3,900
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003E 2004E 2005E 2006E
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
MillionsWi-Fi Hardware
Chipsets
Chipset Revenues
Hardware Revenue
Mil
lion
s
2Kenneth R. Carter
WiMax: A Reality Check(Hardware and Chipset Sales World-wide 2001-200?)
Sources: OSP estimate
Somemore
Some
$0 $ a tiny bit
0
2001 2002 2003E 2004E Sooner Later
$0
WiMax Hardware
Chipsets
0.00.00.0
$0$0
a few
Somemore
Some
Lots
Tons
Lots
Tons
3Kenneth R. Carter
Choice of Licensing Regime Concerns
• Market: Service Provider or Equipment
• Licensing regime should offer flexibility and choice
• Licensed handles relocation better
• Use and User
4Kenneth R. Carter
Does the FCC Determine if WiMax will be Licensed or Unlicensed?
LicenseRegime MarketTechnology
RightsMarket Entry
Petition LobbyingRulemaking
FCC Initi
ative
sNew Companies
5Kenneth R. Carter
WiMax Band Map
WiMax Bands
2000 MHz 6000 MHz
Licensed Gov’t/Licensed Unlicensed
Part 15C U-NII
MMDS
Frequency (MHz)
Satellite Radio Location/FWA
2300-24002480-2700
3300-3800 5400-5725
5725-5850
7Kenneth R. Carter
Charting Unlicensed Devices
RF DevicesPart 15
U-NII Subpart E
U-PCSSubpart D
UWBSubpart F
IntentionalRadiators Subpart C Low Power
Transmitters
Spread Spectrum
Wi-Fi802.11b802.11g
802.11a
Motorola Canopy
RFIDs
Cordless Phones
GarageDoor
ISMPart 18
Blue-Tooth
HomePlug
9Kenneth R. Carter
WiMax in the Regulatory Process
Allocation Policy Licensing Oversight
•Modulation and emissions limits
•Power limits
•Interference
•Tower siting
•RF Safety
•Band Selection
•Use decisions
•Network architecture
•Identification of Users
•Assignment of rights
•Police Role
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(un)Licensing Regimes for WiMax
• Unlicensed
• Licensed by Rule
• 70/90 GHz
• Station/Geographic
• Operator (Ham)
• Private CommonsI received a license, and loss all my property rights.
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Implications of Licensed and Unlicensed WiMax
• Clarity of Rights and Duties
• Fair Price Discrimination
• Unfair Competition
• Urban v. Rural Concerns
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Summary
• WiMax is standard, not a radio service
• Ideally, the market will decide the licensing regime for WiMax
• Increased flexibility for spectrum users• Transition focus from command and control to
market and user
• Both licensed and unlicensed spectrum access fulfill important communications roles
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WISP Business Opportunities• Small companies are significant for
broadband in small and underserved markets
• Low capital costs (unlicensed equipment)
• Interference protection vs. license fee tradeoff
• Can achieve profitability at very small scale
Source: Strategic Information Services LLC
McCall, Idaho – 100 country miles north of Boise.
14Kenneth R. Carter
Investor Behavior Assumptions
• Require Compensation for Capital• More is More• Time Value of Money• Risk & Volatility are Bad• Increased Levels of Risk Require Greater Return• Optimal Trade-off between Risk and Return
(Sharpe Ratio)• Corporate Entity Manages Risks and
Transaction Costs
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Capital Structure
• Debt - obligation to pay (principal + interest)+ Tax deductible, fixed rate of return, no profit sharing– Fixed repayment schedule
• Equity – interest in ownership (dividend)+ Not required to pay– Not tax deductible, profit sharing
• Financial Leverage+ Increases expected return– Increases risk
16Kenneth R. Carter
Financing Decision
• Two Questions: How Much? What Instrument?• Business Plan
– Forecast revenues and costs – free cash flows– Net Present Value + or - ?
• Optimal Capital Structure– Volatility of Cash Flows– Market Conditions– Management
• Small Business: Debt or Internal Financing
17Kenneth R. Carter
WISP Business Opportunity
• Small Companies are Significant for Broadband in Small and Underserved Markets
• Internet Service can be Vital in These Markets• Emerging Platforms to get to Customers• Low Capital Costs (unlicensed equipment)• Interference Protection vs. License Fee Tradeoff• Input Pricing • Limited Resources for Security
and Best Practices• Local Zoning Ordinances, Towers Siting, and Safety
Standards Issues
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WISP Business Risks
• Spectrum– Network performance issues
– Interference issues among Part 15 devices
– Enforcement against “bad neighbors”
• Competition
• Regulatory Change
• Uncollectible Accounts Receivables
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Policy Concerns
• Capital Friendly Environment vs. Competition
• Perverse Incentives: Moral Hazard
• Regulation vs. Market Forces
20Kenneth R. Carter
WISP-Friendly FCC Practice
• Building relations between Government and Industry– Government sponsored information exchanges can facilitate roll-out
underserved markets– Government interaction is greatly appreciated– Increased Accessibility of FCC in Rural America– Education on rules
• Greater transparency and “plain English” in proceedings– Topical Index of WISP-related Commission Items and Activities– Plain English Summaries of Commission Items– Outreach to WISPs
• Increase “average Joe” comments to develop more diverse record for proceedings
• Education of FCC Field Personnel to Rural WISP issues
21Kenneth R. CarterSource: Tribal Digital Village
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• Nearly 3000 square miles• Each circle is 8 miles or
15 miles in radius• Terrain issues are not
factored in• I’ll eventually fill in the
gaps• Gotta cover larger areas
first
Source: Odessa Office
Odessa
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24Kenneth R. Carter
The diagram of the company’s wireless network illustrates better than any written description the magnitude of the network AMATechTel has fully designed, installed and continues to maintain and expand. AMA TechTel offers a secure Layer 3 network with guaranteed uptime, QoS, and advanced services like VPNS. By using proven “carrier class” technology, AMA TechTel offers a quality, cost-effective wireless networking system operating on multiple bands to include 900 MHz, 2.4GHz, and 5.7GHz for last mile connections to customers. Most of the tower locations are connected within the 5GHz range.
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Operation Anytown, IAOperation Anytown, IAPopulation 700 – Site 1Population 700 – Site 1
Operation Anytown, IAOperation Anytown, IAPopulation 700 – Site 1Population 700 – Site 1
26Kenneth R. CarterSource: Connect Rio Arriba
27Kenneth R. CarterSource: PDQLink
28Kenneth R. CarterSource: PDQLink
29Kenneth R. CarterSource: PDQLink
30Kenneth R. CarterSource: PDQLink
31Kenneth R. Carter
Grand Haven Area Coverage Map
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Summary• WiMax is a set of standards, not a radio
services.
• Licensing regime should offer flexibility and choice.
• Ideally, market will decide licensing regime.
• Both licensed and unlicensed spectrum access indicate successful liberalization policy
• Emergence of “light licenses” is likely.
• The hierarchal nature of WiMax lends itself to a licensed regime, but not exclusively.
38Kenneth R. Carter
Part Two: Municipal Wireless Networks in the United States
• Should municipal be permitted to offer wireless networks? If so, how should municipal wireless networks be regulated?
• The promise of municipal networks includes ubiquitous, affordable broadband and new services for communities.
• An elegant solution allows for municipalities to provide networks, but minimizes the negative impacts of a government’s offering communications.
39Kenneth R. Carter
Municipal Wireless
• Promote Open Metro-scale Wireless Connectivity • Advocate Wireless Community Networking• Provide a Forum for Wireless Networking• Recommend Policy• Develop Future Uses• Free Internet access (5 locations) • Cost:
– $40,000 to $60,000/ sq. mile.
– Total project for the entire city estimated $7 to $10 million.
http://www.phila.gov/wireless/
40Kenneth R. Carter
Municipal Wireless: Pros and Cons
The Good • Underserved communities
– Rural
– Inner-city
• Provides a competitor in other markets
• Public/private collaboration
• New & improved services
The Bad • 14 States considering
considering laws restricting municipalities– Includes Philadelphia
• Most municipalities are not capable of running entire network– Construction– OSS– Billing, etc.
41Kenneth R. Carter
Issues Facing Municipal Wireless
1. Unfair Access to Risk Capital
2. Partial Privatization
3. First Amendment – Freedom of Speech
4. Federal-State Preemption
5. Unfair Competition
42Kenneth R. Carter
Policy Recommendations1. Unfair Access to Risk Capital
• Financed in whole or part by tax revenue• Trust fund to equalize cost of capital
2. Partial Privatization• Full separation of government entities• Impartial rulemaking and enforcement
3. First Amendment – Freedom of Speech• No prior restraints
4. Federal-State Preemption5. Unfair Competition
• Open networks and regulatory parity
43Kenneth R. Carter
Conclusions• Both licensed and unlicensed spectrum
access fulfill important communications roles.
• Transition from command and control to market and user.
• More intense use of RF spectrum.
• Increased flexibility and experimentation.
• Experimentation failures and successes.