Wave Issue 0302 1/24/03 Article 5-03

***In-Stat/MDR: Unlicensed Spectrum Drives Wireless Broadband
Infrastructure Beyond Wi-Fi
(January 22)

License-exempt wireless ISPs (WISPs) are quickly becoming a
bigger and bigger factor in the overall broadband picture,
according to a new report from In-Stat/MDR. With Senators Boxer
and Allen jointly introducing a bill calling upon the FCC to
allocate increased spectrum to be made available for license-
exempt fixed wireless broadband (FWB) systems, In-Stat believes
it is clear that interest in FWB is moving beyond just technology
enthusiasts. The market research firm estimates that there are
1,500 - 1,800 license-exempt WISPs in the US, and worldwide end
user revenues generated from infrastructure in the license-
exempt WISP market are forecasted to be $265.2 million for 2002.
These revenues will grow over the next couple years as operators
build out their networks. But, as the market matures, annual
infrastructure revenues will decline back to 2002 levels.

In-Stat/MDR has also found that:

-- While some WISPs are buying their own wireless LAN equipment
and modifying it to meet their needs, many more are turning to
proprietary vendors such as Alvarion. Proprietary systems allow
WISPs to add in other features not found in wireless LAN, such as
the ability to add various service levels, differentiate network
users, and billing.

-- What the FCC does with unused MMDS spectrum should be watched
carefully. If the FCC opens the spectrum to other MMDS providers,
and vendors can supply adequate MMDS gear, MMDS could push
license-exempt back to the fringes of the market. If the FCC
opens up some MMDS spectrum for license-exempt WISPs, that should
spur further market development.

-- In the early years of the market, the ratio of dollars spent
on infrastructure to service revenues will be high. However as
the market matures, In-Stat/MDR forecasts that capital
expenditures on wireless equipment will be near 17% of FWB
service revenues by 2006. This is in line with traditional
capital expenditure to service revenues found in other
telecommunications segments.

The report, "Unlicensed Spectrum Drives Wireless Broadband
Infrastructure Beyond Wi-Fi," looks at the overall market in
terms of technology, drivers, inhibitors, and various government
attitudes toward these services. The report also examines the
overall infrastructure opportunities available selling to this
market and contains primary research collected from Broadband
Wireless Exchange. Specifically this report covers worldwide CPE,
access points, and point-to-point bridge shipments and sales
revenues. The report price is $2,495 U.S. Dollars

In-Stat/MDR offers a range of information resources and
analytical assets to technology vendors, service providers,
technology professionals, and market specialists worldwide.

www.instat.com