Formus chief promises bagful of goodies for NZ telecomms

Fast implementation, flexible connections and high-speed networking are the benefits Formus promises to bring to the New Zealand telecommunications market. The Colorado-based telecommunications company, which bought five lots of radio spectrum in the 26-28GHz range from the government in February, will initially offer business customers point-to-point data delivery and Internet access, says newly appointed CEO Ron Buckman.

Fast implementation, flexible connections and high-speed networking are the benefits Formus promises to bring to the New Zealand telecommunications market.

The Colorado-based telecommunications company, which bought five lots of radio spectrum in the 26-28GHz range from the government in February, will initially offer business customers point-to-point data delivery and Internet access, says newly appointed CEO Ron Buckman.

Formus will focus on business customers but may cater to some sectors of the residential market later such as large apartment buildings at a later date.

“We will be able to offer a very fast service delivery,” he says. “All we have to do is put up an antenna and make the connections. The network speed will typically be an E1 (2Mbit/s) or 10Mbit/s.

“Basically the customer will have a network interface card, category 5 cable and a 10BaseT hub, and we’ll add a device for making the input to the wireless connection, an uplink and a transmitter. It will be very cost-effective and connections can be easily configured for different frequencies depending on the customer’s needs.”

With Internet access, Formus will start as a “carriers’ carrier” but may eventually become an ISP also. It will offer speeds of up to 150Mbit/s and by re-using frequencies will be capable of 300Mbit/s.

A clear line of sight for the antenna is important but Formus does not anticipate any problems. It will use existing buildings for each transmitter, which have a 2.5 kilometre radius.

However, an Auckland trial planned for September has been pushed to November as Formus has had “minor reliability issues” with some of the equipment from prospective manufacturers.

Buckman says a decision on who will provide the equipment will be made by the end of the month. Likely contenders are Nortel, which will provide equipment for Clear’s LMDS (local multipoint distribution services) or California-based Stanford Telecom, with which Formus partnered for trials in Colorado.

“Part of the problem is that each country uses different frequencies and manufacturers have to build different uplinks. Everything at the moment is a bit off. We’ve been working with a lot of manufacturers to get them down the path,” says Buckman. “Most companies are spending $US500 million to $1 billion developing technology and are expected to come out commercially with products by June next year. Formus is working with both, although the company’s chief scientist and CEO are in close contact with all major manufacturers including German company Bosch.

“From a cost perspective we’re seeing a fairly nice cost curve with the price coming down by more than half in the next four years.

“Today the cost of the equipment for the antenna and receiver units for the customer is about $NZ8000 but we expect that to come down greatly.”

Finding a local partner is also key to Formus’ strategy. Formus is looking for a 50-50 partner to invest $10 million initially and then $30-$40 million over the next three years.

Buckman has spoken to Clear, Telstra, Telecom and several ISPs.

“We always like to go with a local partner who can bring local expertise or knowledge to the table,” he says.

“We bring the cash to do the build and we have the technology and expertise.”

Buckman expects to have 15 to 20 staff on the ground by the end of the year.

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