Enterprise focused ISPs start to blaze the trail for WiMAX

Rethink IT, Dec, 2004

The real opportunity for Speakeasy lies in mobility--by 2007 it aims to have a service that integrates VoIP, data and video and can be taken throughout the US via mobile WiMAX devices and public hotspot access.

The Seattle trial is promising 3Mbps of symmetrical bandwidth with optimization for voice. The target market, until subscriber equipment gets cheaper, will be businesses, where Speakeasy will undercut T1 lines by half. With 1.5Mbps T1s costing around $750 a month in the area, it aims to offer double that bandwidth for about $600-$700 a month. Installation time will be 24-48 hours rather than up to three weeks for T1. The company believes it is a steep hike from 1.5Mbps T1 to the higher bandwidth options such as T3 or OC3--even a fraction of the full 48Mbps can cost $10,000--and that WiMAX can exploit this gap.

For Speakeasy, WiMAX is also a chance to move into wireless mobility in the 2007 timeframe, and to hedge its bets against possible regulatory changes that could limit its access to last mile providers and so hurt its DSL broadband business.

The company raised $24m in fourth round financing last March to support the launch of a voice over IP service and expand its roll-out of integrated broadband/Wi-Fi services for consumers and in August it added an undisclosed sum from the Intel Communications Fund, specifically earmarked for WiMAX deployments from 2005.

Speakeasy's earlier round was led by 3i Ventures and BV Capital with participation from previous investors Ares Management, Cornerstone Ventures, Matthew G Norton and Granite Ventures. It has raised $50m to date and hit profit in 2003. The company was founded in 1994 as one of the world's first internet cafe chains and now provides DSL and Wi-Fi in 120 US cities.

NEXTWEB

Also interested in the voice potential of WiMAX is NextWeb, a Californian broadband wireless provider, which has signed a VoIP partnership with Level 3 Communications. NextWeb will launch a service for its 2,000 business customers in the middle of next year.

Like Towerstream NextWeb is forced by shortage of spectrum to offer enterprise services in unlicensed 5.8GHz bands, but it claims that a well designed system can be as robust as a licensed option. The largest BWA operator in California, the company serves business customers in the Los Angeles, San Francisco Bay and Orange Country regions. The company recently made a string of acquisitions of ISPs, not only pointing to a consolidation trend in the US, but also giving it a claim to be America's largest business oriented WISP. It has made four acquisitions in two years, buying up Innetix of San Jose, California, World Wide Wireless Networks of Orange County, Oakland-based Libritas and finally SkyPipeline, from another wealthy Californian area, Camarillo.

NextWeb claims it has not experienced any interference problems in 5.8GHz and offers service level agreements guaranteeing 99.99% uptime--the same as licensed BWA services, though less than some wired alternatives--and 50ms latency.