Wireless taking wing

There’s a wireless revolution afoot. Mobile phone vendors are rolling out handsets that let consumers and professionals perform a variety of tasks on the go, such as scanning stock prices, booking tickets to an evening concert, or even buying a book.

Personal Digital Assistant (PDA) makers are also leaping into the fray by adding wireless capabilities to their latest models. And in the bigger bandwidth arena, suppliers are shipping microwave and radio gear that allows businesses to get high-speed WAN connections even if their office buildings don’t have decent fibre hook-ups.

Given that all this wireless capability is either available now or will be available in the immediate future, it is interesting that last winter a handful of relatively unknown companies shelled out tens of millions of dollars for Industry Canada broadband wireless licences in the 24GHz and 38GHz bands.

Yet shell out they did, enriching the Canadian government’s coffers by more than $170 million. The immediate question would appear to be, why? What can these broadband wireless spectrum holders offer enterprises that existing wireless and wireline networks cannot?

Filling the air with data

The answer, according to Saied Nadjafi, CEO and chairman of Toronto-based Norigen Communications Inc., is affordable bandwidth. Norigen was a major participant in last year’s spectrum stampede, pulling in 37 38GHz licences across the country for approximately $40 million.

Broadband wireless, Nadjafi said, is more flexible and scalable in terms of implementation than fibre networks. With a fibre network, an office tower has to be fairly large and close to other large towers to attract the attention of a network operator and justify the considerable expense involved in the extension of fibre to that building. With broadband wireless, this restriction does not exist.

“If there’s a customer that needs a certain amount of bandwidth, you could light up just the one single building they’re in,” Nadjafi said. The only real expense involved is in deploying the wireless transceivers/receivers on the building’s roof.

Nadjafi believes the flexibility of broadband wireless will be demonstrated best in second-tier cities and underserved pockets of large urban centres, rather than in the core of top-tier cities. But, he noted, “there are enough buildings even in the cores of the big cities that aren’t fibred yet.”

Also, Nadjafi explained, there is a growing demand for more bandwidth in general. Both business and residential owners are demanding higher-speed access to the Internet. And the growing Application Service Provider (ASP) phenomenon, where businesses access applications from a server farm hosted at an off-site ASP, will also push firms to purchase more bandwidth.

Fibre networks with Dense Wavelength Division Multiplexing deployed over them will be able to meet some of this exploding demand, Nadjafi said. But he added that building out bandwidth is much like building out roads. “The more roads you build, the less traffic jams you’ll have,” he said. And local multipoint communications systems (LMCS) will provide Canadian enterprises with many more “roads.”

While Norigen has broadband wireless licences in place, like its Canadian competitors in the same space it does not yet have a commercial service up and running. Nadjafi said his firm is working on its technology selection now and should have trials running in Toronto and Vancouver by August. He hopes Norigen’s first commercial customers will be hooked up before the end of the year.

Canadian enterprises, however, may be sceptical of any rollout schedules for broadband wireless. After all, the Canadian government first issued licences for broadband wireless in 1996 to WIC Connexus and MaxLink Communications. Four years later, WIC no longer exists and MaxLink has a mere handful of wireless sites running.

But Nadjafi believes Norigen and the other bidders involved in last winter’s spectrum auction will be more successful. MaxLink and WIC failed, because wireless broadband technology wasn’t mature enough or economical enough for deployment in production networks four years ago. Also, he said, the market didn’t believe in wireless.

“It was considered to be like pigeons,” Nadjafi said. “You could shoot them down.”

Over the last three to four years though, wireless broadband technology has improved. And the success of some U.S.-based wireless broadband players has improved the market’s opinion of the technology.

Buoyant outlook

Canadian telecom analysts share Nadjafi’s optimism in the future of broadband wireless.

“You can run pretty much anything over it,” said Jordan Worth, an analyst with IDC Canada Ltd. in Toronto. “It’s massive gobs of bandwidth available for whatever you want…The imagination runs wild when you think about the kinds of devices and application you can use wirelessly. It basically extends desktop tools to wherever you are – sales force automation, LAN access.”

Worth agreed with Nadjafi that there will be more opportunity for broadband wireless in second-tier cities than in the cores of major centres.

“In tier-two cities, like maybe Kingston [Ont.], and even possibly parts of Hamilton [Ont.] that aren’t well-wired, you could use this as an affordable way to upgrade bandwidth capacity,” he said. “It will be outlying areas that drive this.”

George Karidis, an analyst with the Brockville, Ont.-based Yankee Group in Canada, noted there are already successful broadband wireless operators in the U.S. and can’t understand why there are none in Canada.

He believes Canadian enterprises should begin to see broadband wireless operators knocking on their doors in the fourth quarter of 2000.

“They all have the spectrum, but they have to find hardware, they have to hire people, they have to negotiate with landlords to have access to rooftops and they have to have a sales and marketing team and do all of that at the same time,” Karidis said.

In the short term, Karidis believes the broadband wireless players will see success as a carrier’s carrier, giving CLECs access to buildings they don’t have on their existing networks.

“Rather than going to a building that already has two or three fibre extensions in the basement, they could go to a building that only has Bell running into it, or Telus in Western Canada and try and target that and offer it as an extension of the landline network.”

Taking the low road

For enterprises that can’t wait for broadband wireless access, there are operators currently offering high-speed wireless services over lower-band unlicensed spectrum.

WaveRider Communications Inc. of Toronto manufactures two types of equipment that operate in the unlicensed 2.4GHz band and provide up to 11Mbps of bandwidth. One product allows companies to deploy individual last-mile connections, while the other product allows firms to deploy managed wireless networks, or extend wireline networks.

Charles Brown, WaveRider’s director of marketing, said the unlicensed spectrum gear isn’t ideal for downtown cores, because it relies on line-of-sight, which is often blocked by large office towers.

“It makes more sense for us to work with our providers to operate in markets where you don’t have cable access, you don’t have DSL access, fibre access is poor and you have a lot of businesses that can’t really get better than 56Kbps dial-up,” he said.

Brown believes there will continue to be a space for unlicensed wireless equipment even after broadband wireless rolls out. He sees the two technologies as complementary.

“They’re talking about speeds that are much faster than 11Mbps,” he said. “They’re talking 100Mbps, 150Mbps-type speeds, very high-capacity networks. They’re more of what I think of as the backhaul-type market.”

Brown said WaveRider has had talks with LMCS providers who would like to see WaveRider networks acting as a last-mile distribution points of LMCS networks.

Like Nadjafi, Brown believes wireless makes sense for a lot of business users. The cost/performance equation of wireless gear is improving, he said. For example, WaveRider’s 11Mbps connection gives users many times the bandwidth they could expect from a T1 connection with a break-even point of about three months.

“This is the year I think we’re going to see this take off.”