ADSL2 won't cut it, says baby wireless telco
The chairman and chief executive officer of business-focused wireless broadband company Access Providers (AP) have a warning for Internet providers building their own DSL-based networks. "They probably don't understand how difficult it's going to be," chief executive Keith Ondarchie told ZDNet Australia .
They should know. Before co-founding AP in 2001 Ondarchie spent a number of years heading up fibre broadband specialist Uecomm. His sidekick Ravi Bhatia established Primus Australia and managed the telco for six years into its current enviable position.
"There are ISPs that are playing around with ADSL2 and want to become network providers," said Ondarchie. "We know how hard that is. We know what it's like to run a network, we know what's it's like to build a network. This is a diversion for them."
The chief executive said while the industry was fascinated with the bandwidth ADSL2 could offer, that bandwidth was tied to proximity to telephone exchanges.
"As soon as you get away from the exchange you get problems," he said.
Ondarchie says his company sees DSL-based services as transient technologies that will eventually be replaced by wireless equivalents, especially in the business space.
"It'll be like dial-up. If anybody remembers that. What the industry needs to realise is that there is hundreds of millions of dollars going into research and development in the wireless space," he said, admitting nevertheless that DSL had been good for his business as it had educated the market about broadband.
However, Michael Malone, managing director of the nation's third largest Internet provider iiNet, does not agree. The company is currently spending tens of millions of dollars installing DSL equipment all over the nation. It offers ADSL2 solutions and is trialling ADSL2+, which has the potential to deliver speeds up to 24Mbps.
Malone regards DSL variations like ADSL3 or VDSL as being the likely next generation of high-speed access, particularly in the home market.
According to Malone, DSL might face competition in the business space over the next five years from vendors providing optical fibre direct to buildings. "But it's unlikely," he said.
Malone's opinions are backed up by his own company's experience of providing wireless solutions.
"We sell iBurst," he told ZDNet Australia . "iiNet had wireless in Perth; we launched that in 1999 and shut it down in 2003. We've been selling wireless in Auckland for the last two years and have also just shut that down."
The iiNet chief said the decision to ditch wireless came down to cost in the end.
"The cost of wireless -- once you put in the cost of spectrum over the top of it -- is simply more expensive than wired technology," he said. "It's in the order of ten times more expensive to deliver a byte of data over wireless than over wired."
"Secondly we had real ongoing quality of service issues. Simply, we have not been able to deliver a reasonable quality of service, particularly when we're looking at running telephony over it."
"The reality is, if there's wire coming into your home and you can get access over that, the cost of delivering it is very, very cheap."
According to Malone, one of the main problems with wireless technology is the high cost of end-user equipment like modems.
With the next generation WiMax standard, he said, wireless vendors like AP and Unwired will be able to bring that cost down. However, they'll still face competition from the wired providers who are able to use the existing copper-based networks to their advantage.
Like AP, iiNet will soon launch a Voice over Internet Protocol service. The iiNet solution is due by the end of August, Malone said. The company currently has 30,000 customers using its own ADSL infrastructure.