The fixed broadband wireless space is littered with wreckage. The leaders at the turn of the Millennium - Winstar, Teligent, Metricom - lie in the dustbin of venture history. Their demise took down many equipment companies, and crippled the remainder. The current 'leaders' are the survivors, and are being challenged by new technologies. The battle lines are forming around unlicensed vs. licensed bands. Much of the growth in fixed wireless is coming in unlicensed bands. The licensed band holders are mostly sitting on their spectrum (Sprint, XO) or in bankruptcy (Teligent).
The hope, or hype, surrounds WiMAX, an attempt by Intel to repeat the magic of WiFi. The industry dynamics are quite different. WiMAX is to WiFi what ATM was to Ethernet - an attempt to create a more robust networking foundation that simply failed to gain enough market traction. The Ethernet ecosystem drove costs down and crept into available niches faster than ATM could gain a foothold. It also improved performance beyond the dreams of ATM. Gigabit Ethernet is not your father's Ethernet. Similarly, WiFi is well established and is pushing limits well before WiMAX gets started. The techniques of WiMAX can be incorporated into WiFi systems - and already have (check out SkyPilot Network). The advanced modulation of WiMAX can also be incorporated into WiFi silicon, as a next generation upgrade. WiFi is also pushing technology beyond where WiMAX wishes to be - for example, with the 802.11n standards effort, that could lead to MIMO and other advanced signal processing techniques on a piece of $5 silicon.
Nevertheless, WIMAX has been good to the fixed wireless industry, of raising hope for a Third Pipe based on fixed wireless to challenge DSL and cable. How should we evaluate the current state of the market?
Top three companies
There really aren't three top companies yet. A noted above, the current leaders are survivors more than leaders, and are being challenged by new technologies. The three companies who are currently in the lead positions in this battle seem to be:
* Alvarion, which has survived the downturn with a decent position worldwide in unlicensed as well as licensed band equipment
* Flarion, which is driving the WiMobile (802.20) standard and is being tested by Nextel for a nationwide 4G system
* Clearwire, which was recently bought by Craig McCaw and combined with NextNet, an equipment company migrating to WiMax (802.16). Nevertheless, it is too early to declare any winners.
Top three innovations
* Mesh networking, which is to fixed wireless what 3G is to the cellular industry - the next generation technology. Mesh is particularly suited to unlicensed bands, as it allows traffic to route around interference, and at scale may prove to be more reliable than point-to-multipoint systems in licensed bands.
* MIMO, a signal processing approach that may be incorporated into 802.11n, the next advance in the WiFi space. Moore's Law will soon allow multiple radios on the same slab of silicon in the same band, enabling the incorporation of advanced signal processing techniques like MIMO in incredibly cheap chips. These techniques will extend range and speed, and reduce interference. WiFi chips based on 802.11n should surpass 100 Mbps and eventually head towards 144 Mbps.
* OFDM, which is not a new innovation in itself - it was invented in 1971, and is being used in fast DSL chips - but has become the common foundation of WiFi, WiMax and WiMobile. OFDM seems destined to surpass CDMA and may form the basis of 4G mobile (and fixed) wireless systems.
People/Companies to watch
* Craig McCaw. He is reinvigorating interest in MMDS spectrum.
* Nextel. Nextel owns about half the MMDS spectrum in the US. It may anoint the winning technology in the band; or it may lose interest and lead to a second fixed wireless boom/bust. Nextel is trying to swap out of its current cellular spectrum into better spectrum, and may have bought the MMDS licenses as a hedge.
* SkyPilot. SkyPilot Network is one of the first WiFi mesh companies, and is about to launch product. (As a personal disclosure, I started SkyPilot, invested in it and remain Chairman.) What makes it interesting to watch is that it modified WiFi to gain many of the advantages of WiMax (higher speed, longer range) at the remarkably low price points of WiFi, and should be the first to demonstrate whether a mesh overcomes interference risk in unlicensed bands.
* Airgo. Airgo is first to launch a MIMO WiFi chipset, even before the 802.11n standard is set.
* FCC. Michael Powell is keen to promote a Third Pipe alternative to cable and DSL. The FCC has also been a strong proponent of unlicensed bands, and may create more unlicensed bands in the 'beachfront property' below 3 GHz.