Q&A: NextNet's Chuck Riggle on MMDS Networks - Mexico,Regional Friday, January 24, 2003 15:47 (GMT-0400)
Mexico's MVS Comunicaciones recently launched a wireless broadband Internet
network in Mexico City. Marketed as the world's largest NLOS broadband wireless
commercial deployment, the network was build with Multi-channel Multi-point
Distribution System (MMDS) technology and operates through a platform designed
by US-based NextNet Wireless.
NextNet's OFDM-based platform, called Expedience, delivers consistent broadband
speeds across NLOS cell radiuses of up to 30km, using indoor, plug-and-play
(self-installable) subscriber units, as well as outdoor (bracket-mount)
NLOS subscriber units. This week BNamericas spoke with NextNet business
development VP Charles Riggle about the MVS project and NextNet's ambitions
elsewhere in Latin America.
BNamericas:
To begin, I'd like to get a better understanding of what
NextNet does. Can you explain your relationship with MVS and how NextNet
is contributing to their broadband project?
Riggle: NextNet is the first company to develop a non-line-of-sight
plug-and-play system for broadband service delivery, targeted primarily
to small business and residential-type end users by a licensed carrier.
The Expedience platform developed by NextNet is unique in that it provides
the greatest coverage, along with consistent and predictable throughput
everywhere in the coverage area. This is unlike some other technologies,
such as the CDMA mobile networks, where the further away you go from a base
station, the less capacity the network provides. The platform can provide
a consistent broadband service to anyone, anywhere in the cell, without
losing capacity as you get further away from a base station.
BNamericas:
Looking at MVS, can you explain how they plan to market
their network? What is the business plan; who are the customers?
Riggle: MVS created its own ISP (I-go) to market broadband services
customers directly on a retail model. MVS will also operate as a carrier
of carriers. In that regard, they are going to be partnering with a number
of large and small ISPs, which will utilize the infrastructure network that
MVS maintains, and also buy CPGs from NextNet to put their own customers
on MVS' network. They will get paid directly by their end users, and then
pay a wholesale price for the amount of bandwidth they use on the MVS network.
MVS is a powerhouse in Mexico for broadcasting services; they have a very
large market share for pay TV, radio and broadcast video. They are only
now entering into the Internet service business, and are using the carrier-of-carriers
model to establish themselves as the premier provider of services, whether
directly or through ISP partnerships. There are large carriers that have
been in telecommunications or data services much longer than MVS has, and
MVS is looking to partner with them rather than to compete with them directly,
as a best means to make money in this market.
BNamericas: And to what types of end-user will MVS and its
partner-ISPs expect to sell their broadband Internet access?
Riggle: All types. The Expedience platform is based on layers
of Internet Protocol (IP), which makes it extremely flexible to do multiple
applications. The most simple application is residential Internet access
and that's one of the services that MVS is providing. They are also targeting
small business customers that would otherwise perhaps purchase DSL-type
services.
MVS is also working with large enterprises like banks and other multi-facility
organizations that need to connect their facilities, buildings or branches
to one another. In that case they provide Virtual Private Network (VPN)
services over their wireless network to those types of entities. In addition
to that, there are other applications such as 802.11 [wireless LAN] hotspots.
That is a service that MVS is providing through other partners, which have
the customers that connect to those hotspots.
BNamericas: You are saying MVS can operate plain old broadband
as well as wireless LANs over the same technology?
Riggle: Our system is very transparent
to an 802.11 network, and so we can easily provide them the backhaul connectivity
from each of those hotspots to the Internet or to a private network. They
are working with providers of hotspot services to give them backhaul wherever
they want to place those hotspots.
BNamericas:
Does the
network allow for seamless roaming across a contiguous geographic area,
or do you have to migrate from hotspot to hotspot as with wireless LANs?
Riggle: The NextNet platform incorporates a mobile application
that supports seamless roaming between sectors and cells. Within the central
business district of Mexico City, where they are currently providing coverage
(about 200 square miles) you can drive from one side of the city to the
other in your car and maintain service throughout that area, getting Internet
service, seamless roaming from cell to cell, without losing your connection.
Subscribers may live in one part of the city and work in another part of
the city; they can take their unit (laptop/PDA) to work and get access,
take it home and get access - anywhere within the coverage area.
BNamericas:
MVS says they are building a nationwide network, but
at present the network only includes central Mexico City, and the company's
expansion goals are to Guadalajara and Monterrey, the second- and third-largest
cities in Mexico. Are they looking at an only urban-network technology,
or are there also rural applications?
Riggle: I can't speak
for MVS on their expansion plans; but I can say that in addition to covering
the world's largest city in Mexico, NextNet also has deployments in medium-sized
cities in very small, rural markets in the US and other international locations.
Our platform is very scaleable and provides a solution not only for big
carriers and big cities, but also for very small ISPs in towns as small
as a few hundred subscribers.
BNamericas:
MVS is deploying the only network of this kind in Latin America. Do you at NextNet foresee other
operators/companies developing similar networks in other parts of the region?
Riggle: With respect to deploying online broadband wireless
access throughout Latin America, we think that Mexico is just the tip of
the iceberg. Just about everywhere in Latin America MMDS licenses are held
and used either for multichannel pay TV; and some license holders have experimented
with line-of-sight first-generation data services. We are in talks and in
trials with a number of carriers both in Central America and South America,
regarding the deployment of the NextNet system.
BNamericas:
What kinds of companies are you typically working with?
Riggle:
The customers we deal with are MMDS license holders and their partners.
In some cases it may be with an existing pay TV provider like MVS; in other
cases it may be with a telecom provider that has partnered with a license
holder.
BNamericas:
The MMDS networks we are talking about
work on the 2.5-2.7GHz range of radiomagnetic spectrum. What is the spectrum
availability/occupation generally like in Latin America?
Riggle:
The licenses are typically lent by the regulatory body of each country's
government, and it is different depending on the country. In Mexico, MVS
has the concession for 80-90% of the spectrum. In Brazil, there are several
dozen license owners each with a concession for spectrum in a particular
city. In the US, licenses were made available on a group of channels within
the MMDS band on a per-city basis, so it is even more complex there.
In many countries, one entity owns all spectrum in the whole country or
in a large number of the cities. And that's how the spectrum is typically
allocated in Latin America. The spectrum is generally allocated worldwide
except in Western Europe, where it is used primarily by government.
The Expedience platform uses spectrum in the 2.5-2.7GHz bands, but we are
currently working on other licensed bands under 5GHz.
ABOUT NEXTNET
NextNet Wireless is a privately held company, and developer of the industry's
first and world's largest commercially deployed NLOS broadband wireless
access system with plug-and-play subscriber equipment. NextNet's OFDM-based
Expedience platform provides telecommunications carriers with solutions
for rapid deployment of high-speed, two-way voice and data services over
the "last mile" of the communications network. The Expedience
system delivers broadband wireless access services over MMDS (2.5-2.686
GHz) frequencies, offering wireless carriers a highly profitable solution
to compete with DSL and cable modems. NextNet's primary investors include
DCM-Doll Capital Management, Enterasys (NYSE:ETS) (formerly Cabletron Systems),
Green Ventures, Globespan Capital Partners and Star Ventures.
ABOUT MVS
MVS holds 190 MHz of clear continuous MMDS spectrum, covering 75% of Mexico's
100 million people, including 15 million TV households, 90% of upper-income
socioeconomic groups, 80% of middle-income groups and around 90% of medium
and small companies. The company presently provides services directly in
Mexico City through ISP subsidiary I-go, which launched operations in November
2002. It plans to extend coverage to Guadalajara and Monterrey by mid-2003.
