If auctions for LMDS radio spectrum were a flop in the US, why is Clear Communications so excited about its potential in the local market?
Because, says Clear's acting general manager for enhanced services, Julia Dol, carriers in the US don't have to pay Telecom New Zealand prices to lease terrestrial capacity.
Clear believes that LMDS (local multi-point distribution service) will finally allow it into the "last mile" and is predicting a new era of "diversity of choice" and competition on price and service to business customers. This, ironically, makes Clear precisely the kind of competitive carrier analysts expected to go for LMDS in the US.
The company will not market LMDS in its own right, but will use it as the delivery mechanism for all its existing products, including ISDN, ATM, Internet, frame relay, managed networks and standard business phone service. It will target "business clusters" of small to medium-sized companies and aims to be able to offer full services to about 70% of New Zealand businesses.
Clear paid $800,000 for one lot of 28GHz radio spectrum at auction in February, a price with which Dol says the company was "very pleased". It will choose from a shortlist of two hardware vendors in about three weeks' time, and announce trial locations in six weeks.
Trials will go forward in several phases, and the company will work for some time on technical issues before signing up any customers, but Clear is aiming for a full national deployment next April, and to have the bulk of its network in place within 18 months, with a further 18 months of infill to complete coverage.
LMDS base stations can deliver broad-band services, but are strictly line-of-site, and serve a radius of between 2km and 4km. Various customer-end units, some no bigger than a desktop modem, will hook up to dishes and provide customers with a back-channel.
Dol says "a lot" of base stations are provided for in Clear's business plan "but exactly how many is commercially sensitive". Although, Clear's plans currently cover only business customers, Dol says the technology "may be suitable" for the residential market and it is probable that consumers living near targeted business clusters will be included in trials.