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2007 Australia - Wireless Broadband - Personal Broadband

This report provides high-level overviews and strategic analyses of the developments in wireless broadband. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions. The subjects covered in the report include:-

The Market in 2007
Infrastructure Overview and Developments
Spectrum and regulatory issues
Overview of the key wireless broadband projects and case studies
The fixed wireless market
The WiFi Hotspot market including key players
WiMAX moving into broadband mobility
High-speed satellite services

There has been some good progress in wireless broadband in regional Australia. The developments in South Australia, in particular, are very promising - these have been made possible by the financial assistance of Federal and State Governments.

The subsidies from HiBIS, and now Broadband Guarantee, are enabling broadband providers to deliver high-speed broadband services to areas where it would not normally be economically viable. At the same time, some of the smaller players in these regional areas have failed because they were not able to build sustainable business plans. However, with the infrastructure in place, it has generally been possible to ‘salvage’ the services. While there has been a certain amount of disruption, in most cases alternative solutions have been put in place, making possible a continuation of services over the subsidised infrastructure.

Outside regional areas, progress has been slow. PBA (Commander) has stuck to its niche market approach and is selectively using wireless broadband in some of its business deployments. Unwired now has around 80,000 customers, but, although this is a significant figure, it is only a small percentage of the four million broadband users in Australia. The same applies to the Austar service in Wagga Wagga.

As we have indicated in previous reports, future development in wireless broadband will be more linked to personal wireless services. Similar to developments in the fixed network, the mobile networks, also, will see transformation from voice to data services. However, the market dynamics are such that it remains more lucrative for the mobile operators to maintain their high call charges, rather than start looking at more affordable mobile data/wireless broadband services.

Despite some good developments from Telstra’s NEXT G, and also from Hutchison, the interesting services that are being offered over these networks are, in general, too expensive to be taken up by many customers. As has been the case in this market segment for the last ten years, services are mainly aimed at the business markets and the top end of the consumer market. Market demand is definitely there, but not at the current prices.

The success of the Hutchison cricket service, offering a flat $5 rate for access to all services related to the ‘A’ series of matches, proves that people are interested if the commercial conditions are right.

These and other scenarios and developments are further discussed in the report.

Mobile data, Mobile voice and Wireless revenue forecasts

Year Mobile Data
(excl SMS) Mobile Voice
(incl SMS) Wireless Mobile
2007 $500 million $12 billion $20 million
2012 $500 million $6 billion $7 billion
2017 Merged with wireless $1.5 billion (= mobile VoIP) $14 billion

Key Highlights:

There is increasing doubt about the business case for WiMAX - whether it will stand up against alternative offerings from fixed and other mobile systems.

The future of the WiMAX technology, however, may lie more in the area of mobility and Wireless Personal Area Networks (WPANs), but in that case it will be in competition with HSDPA and other mobile technologies.

It is most unlikely that companies will launch national WiMAX networks in competition with the current fixed and mobile operators. Few will dare to take on these dominant players.

By 2015 all mobile networks will have been converted to wireless broadband networks, offering the services we have talked about for a decade - but by then at a low cost. Business models will be based mainly on advertising, and partially on subscription models.

There are around 30 companies in Australia that provide hybrid satellite-based Internet access. This is largely due to (HiBIS), a Federal Government broadband subsidy scheme, which was replaced in 2007 by a new Broadband Guarantee scheme.

By 2007 there were some 150,000 (commercial) wireless broadband users - a far cry from the numbers predicted by some analysts earlier in the decade. This constitutes less than 5% of the total broadband market.

There are over 3,500 hot spots installed around the country. The market remains confused about what wireless broadband actually is - WiMAX, WiFi Mesh, LMDS, GPRS/EVDO, 3G, HSDP, Blackberry, etc. We stand by our view that it also needs to be linked to affordability.

According to many observers, spectrum for wireless broadband remains a key issue; however ACMA welcomes discussion on this subject with any serious potential player.

This report provides high-level overviews and strategic analyses of the developments in wireless broadband. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions.

Further information provided includes:

Analysis of the wireless broadband market in relation to developments in mobile data and fixed broadband.
Subscriber statistics and a 5 and 10 revenue forecast.
The business models that need to be deployed in order to develop this market beyond the current mobile data activities.
Statistical comparisons on the WiFi and hotspot market.

1.1 Personal wireless broadband
1.1.1 Business models more important than technologies
1.1.2 Competition needed to change the mobile model
1.1.3 Will WiMAX deliver?
1.1.4 Not being seen to be bored
1.1.5 Smart wireless devices
1.1.6 Fixed wireless
1.2 From WiMAX and 3G to 4G mobile
1.2.1 Service evolution
1.2.2 How to move forward?
1.2.3 Vindicated, 4G is arriving earlier
1.3 Key years for wireless broadband: 2007/2008
1.3.1 Fixed wireless
1.3.2 Wireless mobility
1.3.3 Who are the key players in this market?
1.3.4 Shame on you, wireless industry
1.3.5 The promise of regional funding
1.3.6 Various standards
1.4 Room for free wireless broadband
1.5 Wireless broadband providers on the rise
1.6 Competition analysis - Unwired and PBA versus Telstra
1.6.1 Pre-launch skirmishes (2003-2004)
1.6.2 The cold realities of competition
1.6.3 Telstra’s spoiling tactics - EVDO dead-end street
1.6.4 Unwired neutralised by Telstra in Sydney broadband market
1.7 Market statistics
1.8 Market forecasts
2.1 Infrastructure developments
2.2 Major players
2.3 Brief overview of infrastructure
2.3.1 WiFi in the unlicensed spectrum
2.3.2 World Interoperability for Microwave Access (WiMAX)
2.3.3 3G High-Speed Downlink Packet Access (HSDPA)
2.3.4 Other digital cellular
2.3.5 Wireless security under scrutiny
2.4 Wireless mesh network
2.4.1 Technical introduction
2.4.2 Muni WiFi
2.4.3 metromesh
2.4.4 RoamAD
2.4.5 Australia’s first wireless mesh network
2.5 Local Multipoint Distribution Services (LMDS)
2.5.1 Introduction
2.5.2 Multipoint Distribution Systems (MDS) and LMDS licences
2.5.3 The AAPT initiative
2.5.4 The Optus service
2.6 Wireless Local Loop (WLL) - telephone services - history
2.6.1 Under-serviced regions (1997 trials)
2.6.2 Bypassing the incumbent
2.7 Spectrum and regulations
3.1 Introduction and overview
3.1.1 Regulatory frameworks
3.1.2 Wireless broadband spectrum - an overview
3.2 New innovative spectrum direction
3.2.1 Introduction and analysis
3.2.2 Wireless explosion requires a rethink
3.2.3 ACMA’s innovative spectrum plans
3.2.4 Spectrum harmonisation
3.2.5 Shame on you, wireless industry
3.3 Regional wireless
3.3.1 Broadband wireless access services
3.3.2 Facilitation regional developments
3.4 Bandwidth, mobility and convergence
3.5 60GHz wireless
3.6 Radio LANS - 5GHz
3.6.1 Radio LANs (RLANs) and Wireless LANs (WLANs)
3.6.2 Radio LANs in the 5GHz band
3.6.3 Expansions proposed in 2004
3.7 LMDS - 27.5GHz and 28.35GHz frequencies
3.7.1 The 1999 auction
3.7.2 The 2000 auction
3.7.3 The 2076-2111MHz and 2300-2400MHz frequencies
3.8 Bands in the 1880-2690MHz range
3.9 Ultra Wide Bandwidth (UWB)
3.9.1 Licensing for anti-collision vehicle radar
4.1 Access Providers Ltd
4.2 Allegro Networks
4.3 Austar
4.3.1 Wireless broadband for Wagga Wagga
4.4 BigAir
4.4.1 W Home
4.5 Buzz Broadband - Australia’s first WiMAX operator
4.6 ClearTowns
4.7 COLT Ballarat
4.8 Commander - Personal Broadband Australia (PBA)
4.9 CountryTell - Albury/Wodonga
4.10 Digital River - wireless broadband developments
4.11 Homexone
4.12 IPWireless for Townsville
4.13 Metromesh WiFi network within Perth CBD
4.14 Neighbourhood Cable
4.15 Nextep
4.16 NSW - Sydney: free wireless broadband services
4.17 Optus
4.17.1 Introduction
4.17.2 Test with UTStarcom
4.17.3 Test with Alvarion
4.17.4 Optus in bed with iBurst and/or Unwired
4.17.5 Reselling access providers
4.18 Pacific Internet
4.19 Personal Broadband Australia (PBA)
4.20 SkyNetGlobal - W Home
4.21 Telstra
4.21.1 CDMA-based services
4.21.2 WiFi hotspots
4.21.3 Flarion
4.22 Unwired Australia
4.22.1 The largest player in the market
4.22.2 Fixed wireless access
4.22.3 On the way to WiMAX
4.22.4 Expansion
4.22.5 Unwired to roll out 802.16e (mobile WiMAX)
4.23 Vertel
4.24 Wireless Broadband Alliance (WiFi/WLAN)
4.25 Wizz Communications
5.1 Overview and developments
5.1.1 Introduction
5.1.2 Early developments
5.1.3 Fixed wireless broadband developments
5.1.4 Analysis of the problems
5.1.5 WLANs in the business and government market
6.1 Broadbanding the Coorong
6.1.1 VPN to link council offices
6.1.2 DSLAM rollout
6.1.3 Internode builds ADSL2+ network
6.2 The broadbanding of Western Australia
6.2.1 Kimberley Broadband Solutions project
6.2.2 FttH rollout for Western Australia
6.2.3 Broadband project for education and health services
6.3 The broadbanding of Central Victoria
6.3.1 Active since the mid-1990s
6.3.2 Disaster recovery centre and fibre loop
6.3.3 Mildura and Castlemaine
6.3.4 Regional strategies
6.3.5 State initiative
6.3.6 Macedon Ranges
6.4 Five Growth Councils in Victoria
6.4.1 Leading the broadbanding of new estates
6.4.2 30Mb/s and above
6.5 Omniconnect’s broadband network in regional Victoria
7.1 Overview and analyses
7.1.1 Market statistics
7.1.2 IEEE 802.11 - WiFi
7.1.3 Regulatory issues
7.1.4 Industry analyses - 2007
7.1.5 Market analyses - 2007
7.1.6 Meshed networks
7.2 Key players
7.2.1 Azure Wireless
7.2.2 Internode
7.2.3 interTouch
7.2.4 metromesh
7.2.5 Optus
7.2.6 Telstra
7.2.7 Hotspots in the hospitality industry
8.1 Overview and analyses
8.1.1 Key market developments - 2006 - 2008
8.1.2 WiMAX mobility
8.1.3 Wireless Personal Area Networks (WPANs)
8.1.4 Fixed WiMAX
8.1.5 Technology - wireless - broadband
9.1 Overview and forecasts
9.1.1 Mobile market
9.1.2 Mobility applications
9.1.3 Vindicated: 4G is arriving earlier
9.1.4 Scenario forecasting revenues mobile and wireless industries
9.1.5 Mobility devices
9.2 Wireless Personal Area Networks (WPANs)
9.2.1 Strategic move from Unwired
9.2.2 Bluetooth-UWB merger
9.2.3 Bluetooth
9.2.4 Unwired to roll out 802.16e
9.2.5 Ultra Wideband (UWB)
10.1 Historic overview
10.2 Satellite remains niche business
10.3 Broadband is threatening satellite TV
10.4 NewSat delivers on its satellite promise
10.5 Higher Bandwidth Incentive Scheme (HiBIS)
10.5.1 Introduction of the HiBIS plan
10.5.2 Not so pro-competitive
10.5.3 ISP subsidies
10.5.4 First results
10.5.5 Flaws in HiBIS
10.6 Market forecasts
10.7 Do-it-yourself system for remote communities
10.8 Satellite services from Telstra
10.8.1 Introduction
10.8.2 Iterra Satellite Service - mobile satellite communications
10.8.3 Telstra BigPond Satellite
10.8.4 Telstra places an order with Iridium-based satellite
10.9 BorderNET Internet
10.10 Elders Limited
10.11 SES New Skies
10.12 Optus Satellite Services
10.12.1 Overview
10.12.2 The satellites
10.12.3 The Earth stations
10.12.4 Possible new developments
10.13 NewSat (formerly Multiemedia Ltd)
10.13.1 Airworks Media
10.14 iPSTAR - Shin Satellite
10.15 Inmarsat
10.16 Orion Satellite Systems pty Ltd
10.16.1 Reachnet
Exhibit 1 - Allocations for wireless access services - 2006
Exhibit 2 - Successful bidders in the 2000 auction
Exhibit 3 - Access Providers network reach
Exhibit 4 - Applications
Exhibit 5 - WiMAX
Exhibit 6 - Key issues for mobility industry

Table 1 - Number of ISPs by broadband service offered - 2006
Table 2 - Subscriber statistics by operator - late 2006
Table 3 - Forecast wireless penetration as percent of fixed broadband - 2005; 2010; 2015
Table 4 - Public WLAN or hotspot users - 2003 - 2008
Table 5 - Large WiFi hotspot service providers - July 2006
Table 6 - Hotspot services market revenue forecast - 2003 - 2008
Table 7 - WLAN hardware market revenue forecast - 2003 - 2008
Table 8 - Forecast mobile data, mobile voice and wireless revenues - 2007; 2012; 2017

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