Mr. Andrew Nester Chairman - LMA Systems, Inc. Broadband Wireless World Forum San Francisco, CA
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Transcript of Mr. Andrew Nester Chairman - LMA Systems, Inc. Broadband Wireless World Forum San Francisco, CA
Mr. Andrew NesterChairman - LMA Systems, Inc.
Broadband Wireless World ForumSan Francisco, CAFebruary 19-21, 2001
LMA Systems, Inc. Proprietary Document
The MarketThe Market Wireless Broadband
The Strategis Group predicts that wireless broadband revenues will reach $3.4 billion in 2003.
Dain Rauscher Wessels estimates wireless broadband revenues will reach $7.4 billion in 2003.
eMarketer reports by 2003 small and medium sized business will represent 80% of the total fixed wireless market.
Competitive Assessment 100% of towns/cities with more than 1,000,000 inhabitants have access to both
DSL and cable. In towns/cities with 50,000 to 100,000 inhabitants, 26.2% have cable and 32.1%
have DSL.(Source: US Dept. of Commerce)
LMA Systems, Inc. Proprietary Document
Broadband OpportunityBroadband Opportunity
0
10
20
30
40
50
Internet Access
Internet Access 2000
US Central CitiesRural Urban
02468
101214
Broadband Access
Broadband Access 2000
US Central CitiesRural Urban
Commercial Opportunity 65% of small and mid-sized companies have Internet Access 11% of these companies use broadband
(Source: Insight Research, March 2000)
Residential Opportunity
(Source: NTIA and ESA, US Dept. of Commerce)
LMA Systems, Inc. Proprietary Document
Wireless Broadband Opportunity Wireless Broadband Opportunity Exploding demand for high speed broadband services Need for high speed connections over the last mile Availability of proven wireless solution using MMDS spectrum Availability of licensed MMDS spectrum in second tier markets Availability of proven, reliable head-end and CP equipment FCC first accepted applications for two way data services in August
2000 Sprint and WorldCom providing leadership and credibility
Spent $1B each to acquire spectrum in 1999 Announced plans to launch 60 first tier markets over next two years
LMA Systems, Inc. Proprietary Document
CompetitionCompetitionResidential SOHO Small
BusinessMedium Business
Large Business
DSL (ADSL)
Cable
T1
T3
Satellite
MMDS
LMDS
Unlicensed Wireless
LMA Systems, Inc. Proprietary Document
Who is LMA Systems?Who is LMA Systems? Provider of fixed, two-way wireless broadband solutions to
businesses, residences, and institutions.
LMA Systems, Inc. Proprietary Document
LMA Target MarketsLMA Target Markets Focus is on secondary and rural U.S. markets
Minimum market size 50,000HH “Positive” demographics
Good business mix High PC penetration High HH income High education level Good growth projections
Few Competitors
LMA Systems, Inc. Proprietary Document
Target SubscribersTarget Subscribers Small & Medium Businesses Corporate Telecommuters SOHO Advanced Residential
Heat Seekers Multiple PCs Home Networks
LMA Systems, Inc. Proprietary Document
Have a Strategic Plan Have a Strategic Plan Acquire spectrum in second tier and rural markets Provide technical/customer support from single network
operating center Offer broadband services to small to medium sized
businesses and advanced residential customers Target through “geo-marketing” to capitalize on coverage
areas Increase recurring revenue stream in two ways:
Develop broadband value added services Leverage network with larger numbers of residential customers
LMA Systems, Inc. Proprietary Document
Frequency Evaluation CriteriaFrequency Evaluation Criteria Availability (fragmented ownership provides opportunities) Fit (clustered, usable spectrum) Valuation ($X per channel per household, adjusted for
market size) Acquisition options
Purchase Lease (with option to buy and/or right of first refusal) Joint Venture (with option to buy and/or right of first refusal)
LMA Systems, Inc. Proprietary Document
Comparison of TechnologiesComparison of TechnologiesLMDSLMDS LPTV *LPTV * MMDSMMDS UnlicensedUnlicensed
BandwidthBandwidth Very HighVery High HighHigh HighHigh MediumMedium
RangeRange ShortShort LongLong LongLong MediumMedium
PropagationPropagation True LOSTrue LOS Near LOSNear LOS Near LOSNear LOS Near LOSNear LOS
CPE CostCPE Cost HighHigh LowLow LowLow MediumMedium
Ideal MarketIdeal Market UrbanUrban Suburban/ Suburban/ RuralRural
Suburban/ Suburban/ RuralRural
SuburbanSuburban
License CostLicense Cost MediumMedium MediumMedium MediumMedium LowLow
* LPTV is currently licensed for downstream only.
LMA Systems, Inc. Proprietary Document
Site Buildout PlanSite Buildout Plan Cookie Cutter approach Approximately $500K to $1M per site (hard and soft costs) FCC application and buildout occur simultaneously 90 days to launch of services Dedicated Team (s)
RF Engineer Data Engineer Project Management Launch Marketing Programs Launch Sales Team Launch Installers Assigned QoS Support (Technical/Customer)
LMA Systems, Inc. Proprietary Document
Subscriber AcquisitionSubscriber Acquisition Comprehensive Site Marketing Plans Business Partners Direct Sales In-House Sales Universities MTU’s (Multi-Tenant Units) Third Party Sales Corporate Sales
LMA Systems, Inc. Proprietary Document
Broadband ServicesBroadband ServicesBase Level Offering Internet Access/Services Data Carrier Services Virtual Private Networks (VPN)
LMA Systems, Inc. Proprietary Document
Broadband Services Broadband Services Advanced Offering B2B Application Services/ Web Hosting Voice over IP Custom Video Application Services - Delivering top end applications to small
and medium sized businesses. Examples: Profession Specific (Legal, Health Care, HR, etc.) Customer Relationship Management (CRM)/Contact Management Project Management Data Warehousing
LMA Systems, Inc. Proprietary Document
Have the Right BalanceHave the Right Balance Businesses bring in five times the revenue of residential
accounts. Businesses are better users of value added services. Residential accounts may transition to business accounts
as e-commerce, home-based businesses and telecommuting grow.
LMA Systems, Inc. Proprietary Document
Different Markets have Different Different Markets have Different NeedsNeeds
Choose your markets and segments carefully. Select the right portfolio of products to meet the needs of
your customers. Don’t be everything to everyone.
LMA Systems, Inc. Proprietary Document
The Key is…The Key is… Carefully manage subscriber acquisition & retention costs. In today's competitive broadband marketplace, it's not
enough to know who your customers are, what you want to sell them and how you hope to manage that relationship. To survive and succeed, providers must manage subscribers based on the value those customers bring to the enterprise. Those that do not will lose the coming battle for market share and increasing revenue.
LMA Systems, Inc. Proprietary Document
Cost per Residential SubscriberCost per Residential Subscriber
Equipment Costs
$0
$500
$1,000
$1,500
$2,000
$2,500
xDSL MMDS UnlicensedBWA
Cable
Cos
t per
Sub
scrib
er ($
)
Plant/License Headend/Common Equip. CPE Installation
(Source: First Union Securities, Sept. 2000)
LMA Systems, Inc. Proprietary Document
Where You Want to BeWhere You Want to Be
MMDS
DSL
CableLMDS
Unlimited
Limited
High Low
Delivery Cost
Sweet Sweet SpotSpot
LMA Systems, Inc. Proprietary Document
Key Factors for SuccessKey Factors for Success Procure adequate spectrum Conduct thorough market and competitive assessments Know your target market and their needs Establish differentiation Manage subscriber acquisitions
LMA Systems, Inc. Proprietary Document
Questions & AnswersQuestions & Answers
Thank you.