The future online is wireless - it may not seem so now, but all indications are that cable-free connections will increasingly dominate in the years ahead. “Despite the fact that wireless Internet access from a PC still remains a relatively nascent behaviour – just 15% of users connect to the Internet in this manner today – the future of Wireless Internet access looks very promising globally,” says a recent study by research firm Ipsos (www.ipsos-na.com). Figures cited in support include the rise of laptop/notebook computers (34% of users worldwide have one), and the growth of Internet-capable mobile devices (31% of adults have used one). Coupled with this, we’re seeing growth in the use of wi-fi networks in the cities, allowing businesspeople to stay in touch with their offices on the move. Plug-in wireless modems or built-in wireless connections allow access to local “hotspots” – many of them situated in cafes, to encourage businesspeople to grab a coffee while checking their email. Freedom of movement is the big selling point for wireless Internet. It’s never going to beat fixed-line broadband for big users of bandwidth (audio, video and gaming), but the convenience of opening up your portable PC or mobile phone and getting online without having to plug it into something is very appealing to people who rely heavily on the Net.
"Effortless Broadband"
The big players in the national wireless scene are Vodafone (www.vodafone.co.nz) and Woosh (www.woosh.com). Vodafone’s 3G network provides what its Head of New Product Development, Hamish Sansom, calls “effortless broadband”. Its very popular Vodem plug-in USB modem can install in a minute or two on a Windows PC and generally provides download speeds up to two megabits per second. “There is a road map for that to increase dramatically over the next year or two as well, as we increase not only the download speed, but we increase the uplink speed so it will be significantly faster than the fixed line is today,” Sansom says. Increasing its national coverage is a major target for Vodafone. A key to this is the deployment of the lower-frequency 900-megahertz spectrum. The advantage of a lower-frequency signal is its wider coverage, which will enable Vodafone to reach more areas outside the main centres. At present, 3G coverage is via the two-gigahertz spectrum, which offers higher data capacities but less reach. People who just use the Net for email and a bit of surfing will be offered cheaper deals to migrate to the lower-frequency spectrum. Vodafone’s other big revenue earners are PC cards, aimed at the businessperson on the move, and Vodafone Live!, which offers information, games, music downloads and eight Sky TV channels to mobile phone users. Woosh launched its wireless network in 2003 and has networks in Auckland, Wellington, Christchurch and Southland, with a national subscriber base of about 30,000 users. Woosh posted a $24.8m loss in January, its revenue outstripped by the amount of capital it spent developing its networks. In some ways this reflects New Zealand’s reluctance to embrace broadband Internet. “Broadband in New Zealand hasn’t generally accelerated in the way people might have liked,” says Nick Clarke, Woosh’s Commercial and Legal Manager. “We had very quick dial-up take up in New Zealand, driven by free local calling, but we’ve been slow on broadband. Part of the reason for that is, in raw terms, we’ve got a fantastic dialup product; it’s cheap and it’s pretty efficient.” Telecomms industry sources also suggest the quality of service provided by wireless networks has not been up to scratch. Many of them are using outdated equipment and their download speeds are generally slower than fixed-line connections.
Signals to and from Space
High-speed satellite Internet is available throughout New Zealand, courtesy of IPSTAR (www.ipstar.co.nz), a broadband satellite that covers Asia and Australasia. In New Zealand, its coverage is exclusively distributed by BayCity Communications (www.baycity.co.nz). It offers up to four megabits per second downlink speed and two megabits uplink. Most of BayCity’s business comes from the farming sector, where there’s heavy demand for online banking and other services, and many areas cannot get broadband via fixed lines. Users require a dish similar to a Sky installation and a router that’s small enough to fit into a cupboard. The rental agreement includes the cost of the hardware, and the average cost is around $90 a month with a 1GB data cap. BayCity is working on offering other products, including telephony.
The Big Auction
Woosh’s hope for a brighter future is to roll out the latest version of Wimax (Worldwide Interoperability for Microwave Access), a highspeed technology that distributor Intel claims will offer three times better performance than the best current wireless technology.
Woosh wants to roll out Wimax over its existing network, then move out to cover the rest of the country. But to do this effectively, it needs a big chunk of radio spectrum. Licences to use the electromagnetic spectrum that transmits radio waves are allocated by the government. They cover various frequencies, and the one the Internet service providers are vying for is the 2.3GHz spectrum, originally intended for broadcasting services. The government has decided that management rights will be allocated by auction, due to begin shortly. In fact, it’s a reallocation, since parts of the 2.3 spectrum were originally sold in 1990. According to the Ministry of Economic Development, Woosh currently owns or has usage rights to about 30% of the spectrum. However, those rights expire in 2010, and the Ministry says there was no expectation of right of renewal beyond that. So Woosh will have to take its turn with everyone else wanting a piece, unless ongoing talks with the Ministry can reach some accommodation. Woosh’s chairman, Rod Inglis, says renewal of what Woosh calls its incumbency rights would be “fair and proper”. Inglis also thinks an open-slather auction will produce disappointing results. “In other countries, much bigger blocks are available, so you can provide higher speed services, IPTV, etc. The way they’re configuring it in New Zealand, if they follow the Ministry’s guidelines, the services available would be 20% of the speed that’s available from a cell site in the States or Australia. “The Ministry seems more concerned about getting as many players [as it can] into the business, which we think is unlikely because of the cost of building one of these networks.” So it seems that wireless Internet will be a niche market for a little while yet, until users understand the advantages. In the future,
imagine having a pocket-sized device that provides Internet telephony, instant messaging, Web access, email and streamed video. Then, when you arrive home, it automatically connects to your own wi-fi network, offering all those features, plus connectivity with all the other computers in your home. Your entertainment system (TV, DVD recorder, etc.) will also connect to this network. It could look something like this Intel video: tinyurl.com/2e7hsg Meanwhile, the wireless providers are poised to grasp the opportunities that will be provided by local loop unbundling and naked DSL (see last month’s NetGuide). The ability to communicate without a Telecom phone line, while keeping your existing phone number with the advent of portability, means wireless options will become more attractive. “There’s no doubt that over time [DSL] will be more competitive, but so will we,” says Woosh’s Nick Clarke. “Our prices will come down, speeds will get better, data caps will go up, so we’re confident that our appeal is broad enough and we’ll do fine as the market grows. In the future we really see wireless broadband becoming the personal connection, like mobile phones are today.”
A Provincial Success Story
FOR New Zealand, wireless Internet has provided a much-needed alternative to fixed-line connections in areas where the local telephone exchange just isn’t up to handling broadband. Rural/provincial areas have been crying out for high-speed Net access,
and residents of one region now have a choice, at competitive costs. “The limitations of existing infrastructure, especially people’s frustration with it, are probably the basis of our whole business,” says Terry Coles, chief executive of EOL (www.eol.co.nz), a Bay of Plenty company that has been in the wireless Internet business for more than a decade. “We don’t do any slow plans – it’s all high speed.” EOL is a MESH network provider. Rather than putting up large cellular towers, MESH networks send their signal via a series of small “nodes” – micro equipment small enough to hold in your hands. A signal hops from node to node to reach its destination. Signal repeaters that allow connectivity from town to town are the biggest visible presence of the MESH network. These networks are self-healing. A broken connection is automatically bypassed to the next available node, and Coles says it hasn’t gone down in three years. EOL is currently upgrading its entire network, which now stretches over 200km, covering Waihi, Mt Maunganui and Tauranga, with repeaters already built or under construction to take in Whakatane, Opotiki, Rotorua, Kawerau, Edgecumbe, Te Puke and Katikati. Medium-term plans envisage combining wireless with local fibre rollouts, to better handle demands for bandwidth-hungry technology like video streaming. Even so, EOL boasts a speed of three megabits per second for both downloads and uploads. A residential connection with modest data usage (500MB per month free) can be had for less than $20 a month, and a self-installed hardware package costs under $100.