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Companies offering fixed wireless are often young and haven't been immune to recent economic swings.
Technical obstacles aren't the only problems that plague fixed-wireless companiesâ€"-many of which are less than two years old. Financial hiccups are part of the industry's growing pains. Shakeouts are inevitable.
John Rosica, president of the Silicon Valley operations of recruiting giant Management Recruiters International, knows firsthand how the market can affect the fledgling fixed-wireless business. For almost two years, Rosica was a satisfied customer of Advanced Radio Telecomâ€"-having signed on with the fixed-wireless carrier because "we were disgusted with the level of quality and consistency of Pac Bell's service," he says, referring to the local arm of SBC Communications, Pacific Bell.
Up until the end of March, when ART abruptly filed for Chapter 11 bankruptcy protection, Rosica says the company provided his firm with excellent service. "We couldn't have an hour of downtime," he says. MRI's IT recruiting Web site, which for the most part is hosted internally, requires a substantial amount of bandwidth to handle the traffic generated by job candidates posting their résumés to the siteâ€"up to 300 uploads a day. With ART, Rosica got Internet capacity equal to about 10 times a single T1 line-â€"for the same price.
In the wake of ART's demise, Rosica grudgingly went back to Pacific Bell, purchasing a T1 connection. His monthly broadband bill stays the same, he says, but his company will have to make do with a fraction of the bandwidth that ART provided. Why not choose another fixed-wireless service? Rosica says his experience with ART has scared him away from taking chances on new technology.
But if he had it to do over with ART, Rosica says he would. "I cannot say enough good things about them. I'm sure they tried up to the last minute to pull out some additional funding to save the company," he says. "I don't know what else they could have done."
ART is not alone. Three-year-old Teligent, one of the biggest players in fixed wireless with 35,500 customers nationwide, has had a rocky start. The company saw its stock skid in April to less than 50 cents a share after reaching a high of US$100 last year.
Teligent's senior vice president of marketing and communications Mike Kraft says the stock market has been hard on telecom in general, but particularly on smaller, newer companies. "We're fully funded in 2001," he says.
Mendelson advises companies to stick to short-termâ€"one-yearâ€"contracts. Not only will this prevent you from pouring money into a sinkhole, it also lets you hedge your bets.
Steve Flach, CIO of Caliper Technologies, plans to go with a fibre-optic connection for his data and voice traffic. Until that technology is available, he's been using fixed-wireless service from XO Communications, since last winter. A package deal from XO offers the company, which makes lab-chip devices that streamline laboratory experiments, both voice and data for a projected savings of $40,000 over service from the two telecom companies that were handling Caliper's network before. The company, which employs 200 people, was using two T1 lines for voice access and another two for Internet traffic.
Flach says XO plans to run fibre to his building eventually. He foresees using fixed wireless as a backup, but won't continue with wireless alone. "It's a matter of reliability," he says. "What if the antenna blows over?"
So far, Flach adds, XO's service has been solidâ€"and customer service has been responsive. As for the future, he says, "my crystal ball doesn't go beyond six months."
