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March 7, 2005

TowerStream Takes on the Telcos

By Nancy Gohring

TowerStream uses broadband wireless to serve customers in five U.S. cities and says it has found a successful business model: TowerStream has 1,000 customers. An interesting component of TowerStream’s plan is that it operates totally independently of the telcos because it has its own wireless backbone. That makes its cost structure lower than other competitive operators.

TowerStream is also looking into ways that it can become a carrier’s carrier. This is a great way for it to leverage its existing network. The company plans to expand into another five markets by 2006.

TowerStream likely faces some challenges that it doesn’t go into much detail about here. For example, it places antennas on rooftops of tall buildings in these cities to create its backhaul network. Roof rights access became a huge issue when the LMDS operators were building their networks. Building owners started charging exorbitant rental rates and some operators were able to forge exclusive roof access deals, meaning the other operators lost out on valuable roof space. It’s possible that times may have changed, but I would suspect that the roof rights issue presents some challenges.

Jeff Thompson of TowerStream sheds a bit more light on the company’s voice over IP aspirations. TowerStream recently introduced a mobile voice over Wi-Fi offering in New York City. I was a bit critical of it because it sounded to me that TowerStream was planning on building tons of hotspots in public places and then attempting to link them together for a mobile service. But here, Thompson says the company is investigating solutions from Tropos, which has a mesh Wi-Fi offering designed to cover whole cities, and Cisco. Mesh solutions make covering large areas more practical.

But I still think Thompson underestimates the importance of ubiquitous or at least widespread coverage. He says that if you cover one square mile in Manhattan, you’ve got a million people. If we’re talking about a mobile offering, I disagree. If an operator is touting a service as mobile, customers will want widespread coverage or the service will be useless.

Posted by nancyg at March 7, 2005 1:47 PM

Categories: operators

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