Two Heads Are Better Than One

Navini Networks and Pronto Networks have a modest proposal
for hotspot network operators. Rather than pay the exorbitant price for DSL
or cable first-mile backhaul from individual hotspots, why not go wireless all
the way?

Navini and Pronto recently announced an initiative to market a joint solution
to hotspot network operators, integrating Navini’s second-generation wide area
fixed wireless access networks and Pronto’s turnkey (or outsourced) hotspot
systems.

More than a few major hotspot business plans have been derailed not because
of the capital costs involved in buying access points and other infrastructure,
but by the high cost of installing individual hotspot sites and the recurring
cost of providing first-mile backhaul, says Sai Subramanian, Navini vice president
of product management and strategic marketing.

"That is most often what kills these business plans," Subranian says.
"Especially for network operators [who want to put in] a few hundred or
more hotspots."

"They either can’t justify bringing lines in to all those locations,"
says Pronto CEO Jasbir Singh. "Or service isn’t available."

For "serious network operators," the Navini-Pronto solution makes
a lot of sense, Singh says. It does require investing capital in Navini wireless
infrastructure, he concedes. "But it’s much cheaper in the long run."

Navini’s proprietary non-line-of-sight (NLOS) Ripwave fixed wireless access
systems work in spectrum bands below 3 GHz, including license-free ISM (2.4
GHz), MMDS (2.5 GHz) and WCS (2.3 GHz). Base stations typically cover a range
of three to five miles and deliver bandwidth to individual subscribers of up
to 1.5 Mbps.

The Palm-size Ripwave modem-antenna is customer installable — it requires
no outside antenna, no truck roll. A subscriber with an office and home in the
same Navini coverage area could take a modem and laptop home — or to any other
location within the service providers footprint — and make a connection using
the same account.

The battery operated modem connects to the computer via USB or Ethernet. It
can provide broadband mobile access at road speeds up to about 40 mph. A PCMCIA
modem card will be out some time in the second quarter of this year, making
it an even more mobile solution, Subramanian says.

"For the subscriber, it’s plug ‘n’ play," he says. "Plug [the
modem] into the side of the computer and you’re up and running with broadband
access in less than ten minutes."

It’s a breakthrough technology, Subramanian contends, because it’s not only
plug ‘n’ play, but also offers high bandwidth and wide area coverage. Other
wireless technologies — PCS, Wi-Fi and first generation fixed wireless access
systems — are deficient in one area or another. Mobile is low bandwidth, WLANs
offer only local area coverage and first generation fixed wireless isn’t plug
‘n’ play.

Navini claims the technology provides a total cost of ownership up to 50 percent
lower than DSL or cable, and up to 70 percent lower than first-generation wireless
broadband systems. According to Subramanian, service providers can break even
on a single cell with "two or three hundred subscribers."

BellSouth recently announced it would trial
Navini’s 2.3 GHz WCS system in Daytona Beach, FL. Sprint has been trialing an MMDS version in
Houston, TX, since the middle of last year. There are other trials and commercial
deployments underway as well, including overseas.

According to Subramanian, customer response has been very positive. Sprint’s
trial customers in Houston are begging the service provider to let them pay
for it because they don’t want it to be discontinued. "One European customer
had people camping out to get one of the first 100 modems," he adds.

Pronto developed and sells a turnkey Wi-Fi-based hotspot solution for network
operators. The company is essentially a hotspot outsourcer. It installs the
hardware and its own software for back office functions such as authentication
and billing and manages it all for the network operator.

"The majority of hotspot network operators are smaller companies,"
Singh notes. "They are not looking to spend too much on setting up back
office functions, buying billing systems and so on. Our product offering makes
sense for them. But if a larger operator wants to own everything, we can sell
them a complete solution."

Pronto has a surprisingly large number of hotspots already lit up or sold and
slated for installation this quarter, a number Singh made us promise not to
reveal. However, based on the current pace of sales, the company expects to
have 4,000 to 5,000 hotspots up and running by the end of 2003, he says.

The joint solution would involve building a wide area Navini network with Navini
modem-antennas at each hotspot to provide the first-mile backhaul. The integration
of the two technologies is no more than an Ethernet cable between the Navini
and Pronto customer premises equipment (CPE) .

The Navini base station could be co-located in a "telco hotel" or
some other facility that provides wholesale middle-mile backhaul rates, Singh
suggests. He says hotspot operators can pay as little as $1,000 for 1 Gbps of
bandwidth — enough capacity to support hundreds of individual hotspots.

"For serious network operators with a few hundred hotspots in a relatively
concentrated area, it’s a very good solution," says Singh. "For immature
network operators with only a few hotspots — well, maybe they’ll use it some
time down the line."

At this point, though, Navini and Pronto haven’t actually sold a joint solution
yet. They’re just gearing up the marketing effort. Singh won’t even guess at
how many Navini-Pronto sites might be up by the end of the year. He says the
first implementations likely won’t be until the second quarter.

"We see a lot of value in this," Singh says. "That’s why we’re
assuming it will be of interest."

He believes it will be of particular interest to a new class of hotspot player
that Pronto is seeing emerge now: city and regional governments. Many want to
set up hot zones in their jurisdictions, either as the operator themselves (such
as Long Beach, CA)
or as underwriter of a project run by private sector players (as in the city
of Pittsburgh,
PA
).

"This is not your typical situation where an entrepreneur is involved,"
Singh says. "We’re very surprised. We’re seeing a lot of interest from
places you’d never think of."

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