U S Wireless Broadband LMDS MMDS and Unlicensed

U. S. Wireless Broadband: LMDS, MMDS and Unlicensed Spectrum February 17, 2000 Presented By: Peter Jarich & James Mendelson

The Strategis Group Broadband Information Services • Telecom Information Services Since 1964 • Global Presence • Publications in All Fields – – – Wireless Broadband Internet User Trends Branding & Bundling Competitive Telephony & Convergence Consumer, Financial, Technology Focus • Online News Services

WHAT? What Is Fixed Wireless? Why Is It Important?

The Wireless Local Loop? • Fixed, not mobile. • Not simply voice. • All you need is spectrum!

The Spectrum? • Three emerging technologies. • Individual characteristics. • Individual costs.

The Importance? • New Technologies • Living Examples • Major Carriers • Real Drivers

WHY? What is the Fixed Wireless Business Model?

Fixed Wireless Cost Structure • 80% Labor Cost vs. 80% Equip. Costs • “Backhoes Don’t Obey Moore’s Law. ” Tren Griffin VP Strategy, NEXTLINK

Fixed Wireless “Control Structure” On-Network Unbundle Local Loop Unbundle T-1 Resale Profit Margins Service Control • Facilities Competition is the only option! • Profit Control • Service Control • The Reality of the 14 Points

Wireless = Bundling (Practice) Bundling Take Rates 35% 35+% 25% Wireless Exceeds Expectations!

MMDS Cell Site Migration • Macro to Microcellular deployments. • More spectrum per end-user. • More bandwidth per end-user. Cell Site Migration 5 -10 mi 60 - 70 mi

WHO? Who has Launched Broadband Wireless Services and Where is it Available?

Local Multipoint Distribution Service Hype Becoming Reality High. Speed. Com NEXTLINK • Urban & Rural • Major & Minor Players

MMDS - Wireless Cable Following the Cable Model • One-Way & Two Way • Urban & Rural

MMDS - Wireless Cable Sprint & MCI World. Com Battle AT&T with Nationwide Coverage Operational • ~200 Markets • Rural & Urban Non-Operating

Unlicensed Spectrum Broadband The Early Winner? Multipoint • 200+ Markets • Rural Deployment

HOW MUCH? What Revenues will Wireless Broadband Earn?

Forecast Assumptions • Internet as Key Driver – current emphasis – local phone service is ubiquitous – new technologies and mission-critical voice • Scope of Total Internet Market – 2003 Business Penetration = 74. 1% to 91. 8% – 2003 Residential Penetration = 83. 6% – 2003 Access & Transport Revenues = $34. 1 Billion • Target Markets • 2000 - 2001 Launch Dates

Network Coverage - Business

Network Coverage (Households)

Broadband Wireless Subscribers Business Subscribers

Broadband Wireless Subscribers Residential Subscribers

Service Revenues Millions, $ By Technology 2003 Total: $3. 4 Billion

Broadband Wireless Market Share By Service

WHAT DOES IT ALL MEAN? What Conclusions Can We Draw?

U. S. Wireless Broadband Perspectives • Wireless Broadband Is Here Today • Wireless Is Not Just Voice • Wireless Meets End-user Demand For Bundles • Wireless Meets Operator Demand For Revenue And Service Control • Revenues Are Growing Quickly And Will Be Substantial!

U. S. Wireless Broadband: LMDS, MMDS and Unlicensed Spectrum Price: $2, 400 (pdf/html) $2, 900 (print) To Purchase: Tim Riordan (202) 530 -7591 triordan@strategisgroup. com Further Questions: Jamie Mendelson (202) 530 -7589 jmendelson@strategisgroup. com