PRIME COMPANIES INC LMDS CASE STUDY FOR PENNSYLVANIA

PRIME COMPANIES INC. LMDS CASE STUDY FOR PENNSYLVANIA BROADBAND WIRELESS WORLD FORUM FEB 19 -21, 2001 SAN FRANCISCO, CA

PRESENTED BY: NORBERT J. LIMA PRESIDENT AND CEO PRIME COMPANIES INCORPORATED

History Prime Companies participated in the 1999 LMDS Auction. n Prime Companies was successful in acquiring 8 LMDS “A” licenses. n Geographically speaking, these licenses range from Western Pennsylvania going in a northerly direction all the way into New York state. n

Goal Strategic and cost effective deployment of LMDS services in the secondary markets in Pennsylvania and subsequently New York. n Serve the underserved markets! n

The Challenges of Getting Started IMPLEMENTATION STRATEGY: n n n Think in Diminutive Mode- buildings were small- Max 6 stories. UNDERSTAND THE MARKETS –MARKETING STUDIES Which market to deploy first? – Which markets have tallest buildings? – Which markets have broadband/DSL?

Challenges of Getting Started n Due Diligence § What’s customers’ perceived needs? § Understand customer’s level of internet and e-commerce knowledge. § What manufacturer is able to deliver? § What technology – TDM or FDM § Dynamic Bandwidth Allocation. § Is equipment available now- or is it vaporware? § Evaluate hardware Pricing! (Both base station and CPE)

Challenges Continued… n Site Lease Negotiations (This is not N. Y. C. !) – Base station locations – Building-top CPE locations – Ordering Services – Bandwidth from Local Providers-not much competition! – Is DS 3 available or only T 1’s?

Customer Base n n Not 70+ story building, not 20+ story buildings - Best Case, 6 Stories- Not a large number of customers in any one building! Unlike Metropolitan Areas , education is a must- in secondary markets a 56 K modem is “A Screaming Speed” – Educate what speed means – What bandwidth means

Customer Base Continued – How can people benefit? – What is e-commerce and the impact on their business? – EDUCATE, EDUCATE! – Your customers are business only. In the secondary markets we need to capture all business and residences in the future.

Equipment Prices and the Economic Impact n n n Need more competition! Need more buyers! All this will drive the price down… Why price needs to be cheaper-More Price Effective! Most business buildings have one to four tenants, and CPE costs are too high!

Equipment Prices Continued – In 1 to 2 tenant buildings we don’t need min. 2 -10 BT LAN connections and two T 1’s– Maximum from one ODU/CPE 16 -10 BT-Much too much! – Less capacity with better price- more business customers and capture residential market equals= rapid deployment! – Maximize Repeater design – Optimum penetration with least amount of infrastructure

Equipment Prices Continued Must develop standards particularly in the CPE equipment as to invite competition! n Standards allow competition and creates competitive pricing structureshighly needed –particularly in the secondary markets. Manufacturers, this is an $11 B equipment market! n

Strategies for Success Create Alliances i. e. Chambers of Commerce n Regional Economic Development Centers n Apartment House Associations n