Wireless LMDS a Clear MasterStroke

AUCKLAND (03/17/2000) - Clear Communications has been spared from having to do expensive customization of equipment for its LMDS (local multipoint distribution service) network, thanks to its purchase of radio spectrum from Formus Communications Inc.

LMDS is a broadband wireless technology which Clear will use to deliver voice and high-speed data services.

Most LMDS equipment vendors have come out with products that use radio spectrum in the 26GHz range but prior to its recent spectrum purchase from Denver-based Formus, Clear only had 28GHz radio spectrum.

When Clear bought its original lot of radio spectrum at a government auction two years ago, it expressed the hope of having a national LMDS network in place by April 1999.

"We haven't moved so far because the price wasn't right, and the technology was immature when we bought it," says Ken Benson, Clear Communications networks director. "We subsequently discovered that our spectrum was at the top end of the range -- 28GHz and the equipment makers have tended to standardize on 26GHz. We would have had to have any equipment we used customized towards the 28GHz spectrum. So in the long term the lifetime costs of that wouldn't have paid off. This (Formus purchase) puts us into the standard range."

Benson says even if it had failed to obtain the extra 26GHz spectrum from Formus, Clear would still have gone ahead with a LMDS roll-out but it would have taken longer and been more expensive.

Now with the new spectrum under its belt, the telco is planning a NZ$120 million (US$58.8 million) network roll-out with the first site slated for July.

Strong contenders for the first site are Rotorua, Tauranga and the Auckland suburb of Panmure.

Benson says he expects deployment to the rest of the country to be carried out in the three months following the July rollout. An LMDS equipment vendor is expected to be chosen by April.

In the case of vendor selection, Clear has taken advantage of work equipment and lab tests done by its parent company British Telecommunications.

"We've drawn up a short list and we're looking at local support capability, whether they will be able to integrate into our network," he says. He wouldn't reveal which companies are on the short list.

Clear will primarily use LMDS as a "last mile" technology that replaces the need for wired phone lines, thus allowing it to by-pass interconnection agreements with Telecom New Zealand which it needs to give customers access to its fiber optic network.

"At the moment we use Telecom tail circuits to connect customers to our network. This has constrained us in terms of service delivery and pricing.

Until now Telecom has had a big say over what we can and can't do. LMDS gets us out of that."

Fixed-point wireless services, such as LMDS, can crank bandwidth up to 2M bits per second over two to four kilometer distances. With LMDS voice, video and data are converted to a microwave signal via a rooftop antenna and beamed to a base station, where the signal is translated back into a digital bit stream.

But like microwave technology, LMDS has difficulty penetrating obstructions like buildings and leafy trees.

The target market will be small and medium business to just below corporate.

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