Building A Sound Business Case With Fixed
BY DAVID ACKERMAN
A sound business case is everything -- just ask competing service
providers. As for building one in the fierce metro market, avoiding
dependency and selecting a platform that enables flexibility is a good
place to start. It can be done with the right technology. This article
will examine the options and a real world example of two companies that
succeeded in building a sound business case using fixed broadband
Examining last mile options prompts the question, how much metro fiber
is really lit? In a recent article, a leading firm stated that only about
22 percent of the fiber on the 22 metro routes studied is lit. Even though
much of the ï¿½fiber glutï¿½ is dark, there are still widespread rumors that
the price of fiber will continue to drop. How much will the price drop
throughout 2003? If youï¿½re a competitive service provider, the answer is
not enough. Dependency will still exist, which increases the cost of
running the network. Leasing from a third party, indefinitely, cannot
match the advantages of ownership. Additionally, fiber lacks flexibility.
For example, if the optimal location for a network hub site is a mile away
from the fiber, costs skyrocket by trenching more fiber (if that is even
As the industry struggles to recover, competition among local exchange
carriers and alternative service providers is alive and well. The only way
to compete profitably in new markets is to lease lines or to build
infrastructure. But leased lines are not economical for competing service
providers because of the cost and dependency issue mentioned above. They
do not create a sound business case. In fact, many alternative service
providers are looking to put in their own infrastructure to reduce the
operating expenditures that were driven up by leased lines.
It boils down to reducing expenses. Why wouldnï¿½t service providers want
to reduce expenses by building their own infrastructure? One reason might
be association. Look what became of so many investments in building fiber
networks. But from the beginning, the great fiber build-out required
carriers to ï¿½guesstimateï¿½ how much capacity would be needed in the future.
After all, they had one shot at digging, guided only by a lot of growth
predictions that, in hindsight, were grossly over-inflated. At anywhere
from $500 to $1,000 per foot to trench in metro areas, there wasnï¿½t enough
latitude to support the level of miscalculation. Not all infrastructures
are alike, however. Building one with the ï¿½rightï¿½ technology is crucial
for a safe investment.
Today, service providers are trying to gain a competitive advantage
with innovative, economical solutions, while reducing operating expenses.
Private networks are looking for the same results. The goal is to deploy
solutions that will not only remove the access bottleneck, but also pave
the way to expand value added services. In short, they are all striving to
create the better business case with a fast payback in the process.
Building oneï¿½s own infrastructure, with the ï¿½rightï¿½ technology, is still
the best way to do it. Fixed broadband wireless, for example, has
tremendous deployment flexibility and enables service providers to grow
along their networks along with customersï¿½ needs. Fiber, on the other
hand, must be built up before knowing the size and location of the
Fixed broadband wireless makes good business sense from all
perspectives. Whether youï¿½re a conservative, alternative service provider
looking to reduce operating expenses associated with a leased line, an
emerging competitive service provider looking to get an early stronghold
on a new market, or just a business in need of a private VPN connection
between buildings, fixed wireless is a sound choice.
Fixed broadband wireless technology is hardly a newcomer to the
high-capacity connections scene. In fact, itï¿½s been a business-to-business
alternative all along for interconnecting private networks, bypassing a
LEC or connecting to the Internet. It is cost-effective and can be quickly
deployed. The good news is that none of this has changed. The better news
is that more people today understand that this is a viable solution. It is
becoming more practical. It is a contender.
Nothing drives home the importance of picking the ï¿½rightï¿½ technology
more than a tangible example. The proceeding summary is one such example.
It will overview how a rapidly growing broadband service provider in the
Southwest quickly reached profitability in the Dallas market by building a
cost-effective last mile solution with fixed broadband wireless equipment.
airBand Communications is a wireless broadband service provider
with a strong presence in the Southwest, specifically in Phoenix, Houston,
Dallas, and Fort Worth. The company created a sound business case by
utilizing Ceragon Networksï¿½ high-capacity fixed wireless systems, which
enabled airBand to build its backhaul infrastructure with licensed
wireless IP rings, expand into the Fortune 1000 enterprise market, grow
their networks to meet increasing capacity demands and have the ability to
expand its integrated service offering (voice, video, data, and
The relationship began with a deployment at airBandï¿½s
hub site in Phoenix, where the company has a base of business customers.
airBand urgently needed backhaul connectivity, but couldnï¿½t even obtain a
landline connection from the local phone company within a reasonable
timeframe. Given their pressing need to turn up the hub site, deploying a
wireless solution was clearly the only way to rapidly secure high-capacity
connections. So they connected with Ceragon -- literally to meet their
ï¿½ airBandï¿½s aggressive business plan demanded a high-capacity
solution that would enable them to accelerate growth by offering services
to the Fortune 1000 enterprise market. airBandï¿½s initial customer base
was comprised of small to medium sized businesses. They recognized a
significant growth potential in selling to larger customers such as
financial institutions. However, airBand needed a secure, reliable,
high-capacity access solution to launch into this new market.
They wanted to cut operating expenses by eliminating ILEC leased fiber
expenses. Yet, airBand wanted assurance that the payback on their
alternative solution investment would be realized within a year.
airBand wanted to deploy a licensed IP ring backhaul solution that
could co-exist with their unlicensed point-to-multipoint offering.
They wanted an IP ring solution that could connect their network
points-of-presence (POPs) -- also known as point-to-multipoint (PMP) base
stations -- one to the other. The companyï¿½s goal was to achieve a
protected ring with its built-in redundancy.
ï¿½ They wanted to
invest in equipment that could handle Fast Ethernet today and carry
expanded services in the future. airBand also wanted a networking
product that would enable them to grow with their customersï¿½ changing
needs. For example, a system flexible enough to integrate voice and video
services when appropriate.
ï¿½ airBand wanted to be able to get a link ï¿½up and runningï¿½ within
30 days, including licensing the spectrum. Moving quickly is a key
competitive advantage to a growing wireless broadband service provider.
airBand wanted to avoid the cumbersome process of getting a leased line
and leverage the speed to market advantage of a wireless solution. They
needed a licensed solution that could keep the pace.
Some specifics of the backhaul deployments include:
Backhauling airBandï¿½s Fast Ethernet services over an IP ring.
their offerings, airBand licensed individual frequency links in the 18 and
23GHz bands. This met the companyï¿½s requirements for a quick,
licensed-product rollout, as obtaining a license to operate in these bands
is very easy. The FCC, within a relatively short time frame, issued
ï¿½ Ceragonï¿½s FibeAir system seamlessly integrated with airBandï¿½s
existing point-to-multipoint network.
ï¿½ FibeAirï¿½s modular design proved to be extremely valuable, enabling
airBand to integrate its Fast Ethernet networks and provide an additional
Fast Ethernet or DS-3 interface connection. This flexibility will enable
airBand to continue to expand its offering and bundled services.
airBand currently has 15 IP links of Ceragonï¿½s FibeAir
point-to-point fixed wireless broadband equipment up and running with
deployments in Dallas, Phoenix, Fort Worth, and Houston. Additional
deployments are underway. Already, airBand is seeing a tremendous payback.
Compared to $3-5K per month for a leased DS-3, Ceragonï¿½s equipment is
paying for itself in less than a year. The payback on an OC-3 connection
is even better. Furthermore, Ceragonï¿½s solution enables more than twice
the capacity of a DS-3.
Free from the constraints of dependency, service providers who choose
to compete by building their own infrastructures will have the power of
choice. And for many, choosing fixed broadband wireless will keep them at
the front of the pack. It is a choice technology for emerging service
providers, enabling them to offer expanded services, achieve rapid growth
and see a fast payback. It also is a means for LECs to reduce operating
expenditures. The flexible nature of this technology gives service
providers agility -- the key to securing an edge in todayï¿½s
David Ackerman is president of Ceragon Networks.
Ceragon, a leader in the global high-capacity wireless infrastructure
market, is a pacesetter in broadband wireless networking systems, enabling
rapid and cost-effective high-capacity network connectivity. For more
information, please visit the company online at http://www.ceragon.com/.
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