TIME EUROPE
FEBRUARY 28, 2000 VOL. 155 NO. 8
Down to the Wire
In many countries ultra-fast wireless systems are supplanting fixed-wire connections, speeding up Internet access and potentially putting these nations at the forefront of telecommunications technology
By STEVE HOMER
It is fortunate that Pawel Biet-kowski has a sense of humor. His Warsaw-based Financial Printing Services produces confidential financial presentations and reports. To meet tight deadlines, the company conducts much of its business on the Internet, sending documents back and forth to clients for approval. But that's not always practical. "We have a joke," says Bietkowski. "When do Polish Internet companies go broke? In the autumn, because when it rains the telephone system has real problems."
Last autumn the weather brightened for Bietkowski's firm. It became one of the first companies in Poland to subscribe to a high-speed wireless service provided by Formus, one of a handful of companies capitalizing on the potential of fixed wireless systems. By simply putting a small antenna on an exterior wall a business can gain the speed of an integrated services digital network (ISDN) telephone line or fiber optic cable. Perhaps most importantly, the technology can be rolled out rapidly, bypassing bottlenecks in the local loop, the part of the telephone network which connects subscribers' homes and offices.
Europeans have been hearing for years that broadband services which offer speeds of more than 64 kilobits per sec. are just around the corner. European telephone companies, such as British Telecom and Deutsche Telekom, are just starting to introduce technology called asymmetric digital subscriber line (adsl), which permits the transmission of big stacks of data over ordinary phone lines. And cable companies have started offering services of up to 2 megabits per sec.--that's 31 times faster than 64 kilobits per sec.--in major city centers.
But most people and many small and medium-sized businesses in Europe still use maddeningly slow dial-up connections--and will continue to do so for some time to come. A recent study commissioned by Nortel found that 87% of Internet users worldwide will be using such slow "narrowband" connections to the Internet in 2002. The number of adsl connections is growing in Europe but will still only reach 4.1% of homes by 2003, according to technology consultancy International Data Corporation (IDC). And cable modem connections will only be used by 4.7% of homes by the same date.
Fixed wireless connections could change all of that, and not just in Europe. These links could rewrite the telecoms map of the world, propelling telecom basket-case countries into the forefront of the new world order. In Latin America, 10 countries have already licensed systems. In Europe, these so-called wireless local loop services are operational in Finland, Germany, Ireland and Poland, and further licenses have been granted in Finland, Germany, Ireland, Poland and Portugal. Tenders are being made in Spain and Austria. Almost every country in Europe, Latin America, North America and the main Asia Pacific markets will have licensed systems by the end of the year.
The connection speeds range from 64 kilobits per sec.--the same as an ISDN digital line connection and roughly double what you can get from a normal phone line--up to 8 megabits--about 150 times as fast as top speed over a normal modem. Above about 1.5 megabits, you can even deliver TV pictures. But the main selling point of wireless is not speed. It's availability. Wire-based suppliers can take weeks, months or even years to install a high-speed line or fiber optic connection--if such a service is even available--while wireless connections are typically made in a couple of days. "If you believe the Internet is changing the world and the way we work, then there will be a massive demand for data," says Cynthia Hillery, vice president of marketing at Netro Corporation, a wireless broadband infrastructure company. "Local delivery is becoming a serious problem that broadband wireless can address."
Today the main target is the business user, but in some places wireless broadband is already on offer to residential customers. "It is going to be an exploding market," says Jean-David Calvet, Alcatel's vice president of marketing for its radio communication activities. "Figures are difficult to predict, but we expect companies to spend around $1 billion on equipment in 2001." Aside from Formus, another company seeking its fortune in this sector is RSL Communications (RSL COM) based in Hamilton, Bermuda. The spread of its three main European forays shows how flexible wireless is and how profound its effect might be.
In Austria, cable companies are starting to offer high-speed cable modem services and the local telephone company is starting to launch adsl services. But RSL COM is using wireless technology to compete independently of the existing infrastructure. It could piggyback on the cable or telephone systems by buying leased services, but using wireless technology lets it control its own costs and quality of service. "With wireless we control our own destiny," says RSL COM Austria chief operating officer Peter Ziegelwanger. "Wireless is a way of leapfrogging the [incumbent players] and delivering services directly to business customers." The firm is in the process of bidding for a license.
In Spain, RSL COM (which trades as Aló in the Spanish market) has teamed with other companies, including
United Pan-Europe Communications (UPC), to establish a joint venture called Aló 2000 that is looking at a completely different market. Unlike Austria, the Spanish cable TV service penetration levels are derisory and the incumbent national telephone provider, Telefónica, is soldiering on with an outdated telephone infrastructure. Eventually, RSL COM will offer services to residential customers, but the main target for now will be medium to large companies, offering these clients connections of up to 2 megabits per sec.
In neighboring Portugal, RSL COM has launched Maxitel, a joint venture with Privatel, a Portuguese telecoms investment company, to deliver connections to the residential market simply because it is so underserved. In April, instead of ultra high-speed services, the company will offer ISDN-type connections--still something most Portuguese residential customers can only dream of.
Early operators are charging what the market will bear, with fees ranging from $250 a month for a 64-kilobits-per-sec. connection up to $3,000 a month for a 2-megabits connection. But as the technology becomes more widespread, competition between wireless broadband suppliers is expected to push prices rapidly downward. Margaret Hopkins, a consultant at Analysys, a telecoms consultancy in Cambridge, England, says she expects wireless broadband to take off in Spain, Italy, Portugal and Greece. Cable networks have not been developed in those countries, and there is little high-quality copper wiring for phone lines, a requirement for a successful transition to high-speed adsl technology.
In Poland it looks as if telecoms could jump forward a whole generation. "We never had checks in Poland--we went straight from cash to plastic," says Jaroslaw Mulewicz, president of the Polish branch of wireless broadband provider Formus. "Now many banks are going into e-commerce in a big way and they need reliable connectivity. We are going to go from the worst of Internet connections to the best, almost overnight." Once that happens, getting a weather report via the Internet will take on a whole new meaning in Poland.
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February 28, 2000
COVER STORY
What's Eating Leonardo DiCaprio?
Not too long ago, he was the king of the world. Now Leonardo DiCaprio returns, after much indecision, in the eagerly awaited film The Beach
EUROPE
Downed and Out
Germany's worst post-war political scandal claims yet another victim--former CDU leader Wolfgang Schäuble
Reversal of Fortunes
Prospects are poor for the CDU as voters head to the polls in the first big electoral test since the scandalous revelations
It's Déjà Vu All Over Again
A collision between republicans and unionists over I.R.A. arms has blocked the path to peace
Back to the Future
Serb President Slobodan Milosevic resorts to old tricks to shore up support before local elections
Reporter Missing
A hard-hitting journalist disappears in Chechnya and the Russians are suspected of foul play
AFRICA
Falling Apart, Again
Even though democracy has returned to Nigeria, ethnic clashes still threaten to cripple the country
Power to the People
Zimbabwean voters just say no to President Mugabe's proposals for constitutional reform
TIME DIGITAL
Not Very PC
A new generation of devices is moving computing power off the desktop and into everyday items--TVs, phones and even park benches--making access quick, easy and less costly
The Trillion-Dollar Secret
Beneath the hype, the Internet is fostering a silent revolution through online exchanges that allow fast and efficient trading among corporate IT systems
Down to the Wire
In many countries ultra-fast wireless systems are supplanting fixed-wire connections, speeding up Internet access and potentially putting these nations at the forefront of telecommunications technology
The Need for Speed
Driven by the mantra of first-mover advantage, Internet incubator units are both nurturing and nudging their dotcom start-ups into the online marketplace at a frenetic pace
This Year's Models
The latest gadgets can do everything from making dinner reservations to measuring stress
Home Improvements
In a London suburb, domestic bliss gets a boost from cyberspace
Trying to Build A Brand on the Web
BOL stakes its claim to the burgeoning online market for books, videos and music
ENVIRONMENT
Deadly Discharge
A poison spill devastates river life in parts of Europe, prompting calls for better checks on hazardous waste
MEDIA
The Media under the Microscope
South Africa's Human Rights Commission investigates claims of racial bias in the news
THE ARTS
Queen of the Muses
A new book examines the extraordinary life of Zinaida Volkonsky, friend of kings and beggars
DEPARTMENTS
Essay
Techwatch
World Watch
To Our Readers
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