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Australian providers desert wireless

Australian providers desert wireless

After rising quickly in 2004, the number of wireless providers in Australia has fallen dramatically in 2006, according to a survey of 512 ISPs.

Market Clarity CEO, Shara Evans, said the period between 2004 and 2005 saw the number of ISPs offering wireless plans rise strongly to about 140. However, this has dropped this year to less than 100 providers. Around 38 of these are resellers.

Evans said the initial enthusiasm in wireless from the industry was driven by the availability of wholesale wireless services, the DSL black zones and the cost of offering DSL or other broadband technologies.

"While these drivers have not gone away, we have seen a number of things happen [to flatten the market] which come down to fluctuations in the number of ISPs, technological issues and commercial issues," she said.

"In the reseller space, where ISPs have not invested in their own infrastructure, they may have had an initial willingness in wireless, only to find that the technical support staff weren't sufficiently skilled across the radio engineering aspects of providing wireless support.

"Some providers probably found that it was too hard and they had relatively low take up of those services to justify the support costs."

Evans said there were a number of factors that determined how cheap and easy, or costly and difficult, wireless is to deploy.

These included whether the service used private licensed frequency bands, or class licensed frequencies supplied free of charge by ACMA. While there might seem to be immediate cost savings in using class licensed frequencies, these were ultimately much more susceptible to interference and could be more costly in customer support.

Other factors include coverage, geographical terrain and the type of CDE used; each CDE has a different type of chipset with varied signal strengths.

"For consumer installed products, the problems relating to the installation may have to do with a range of environmental factors - maybe they are in a valley or there is a structure near their building that interferes with the signal, or there may be a lack of knowledge by the customer," Evans said. "If a provider is not sufficiently aware of all the issues associated with wireless and they are trying to support customers in self installing, it can be a very long and costly exercise.

"I don't want to leave the impression that wireless is not a viable technology because it certainly is."

If an ISP had radio engineering resources either in house, contracted or supplied by their wholesale provider they were much more likely to be successful, Evans said.

"Wireless is still an early market and will continue to be important particularly in regional markets and to those with mobile lifestyles," she said.

"Our findings are not necessarily bad news for resellers. Those which remain in the market have fewer competitors in their geography than previously; which may improve their opportunity."

Evans advised that it is a good idea to avoid over-saturating a single geographical area with too many resellers, unless a unique value-added service, or other service bundle, is included in the offer.

"In order to be successful, resellers should look for wholesale providers whose services align with their customer base and complement rather than compete with existing services. They should also look for wholesale wireless services which offer comparable value to wired services," she said.


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