Susan Lee Issue: Asia-Pacific I 2003
Article no.: 10
Topic: Wireless Broadband Access – Meeting the Needs of SMEs throughout the World
Author: Susan Lee
Title: Co-Founder, CEO and Chairman
Organisation: PointRed Technologies, Inc
PDF size: 52KB

About author

Susan Lee has more than twenty-five years of management and technology development experience. She founded PointRed Technologies in 2002. The company provides a cost-effective, practical and innovative solution to delivering wireless broadband capability anywhere in the world. In the late 1990s, Ms Lee built a network integration company that grew to $2M revenue in the first year of operations. With Sun Microsystems in the late 1980s, Ms Lee has held the position of Systems Engineering Management for major semiconductor accounts such as Intel, Samsung, Seiko, Lattice Semiconductor and Cadence. Ms Lee’s background includes management, systems engineering, sales and marketing. Ms Lee is a MS candidate at Phoenix University and holds a B.S. degree in Computer Science and Business from Seattle Pacific University.

 

Article abstract

Most businesses in both the developed and developing world are Small or Medium Enterprises. The Internet makes it possible for them to participate in world markets, but their access to affordable broadband is often limited. Supportive government regulations and easy to use wireless technology are needed to provide SMEs with affordable broadband. Wireless systems in the Asia-Pacific region, particularly India and China, have generated a 70 per cent return-on-investment within three months and can turn a profit within four to five.

 

Full Article

Small to medium sised enterprises (SMEs) are the heart of economic health, both in developing countries and in the most prosperous of nations. Broadband access will truly achieve its potential – and its economic viability – when SMEs are able to take part easily in this latest telecommunications revolution. Prior to the Internet Age, SMEs were at a disadvantage in conducting businesses globally. They simply could not afford to reach out and do commerce with people beyond their local environment. With the fast communications made possible by electronic mail, online order processing and collections and immediate access to billions of documents and other types of information on the Internet, SMEs have useful tools to expand beyond their regional marketplaces; the entire world has become one market. In theory, at least, many SMEs are now able to compete directly with large conglomerates that have huge financial resources devoted to marketing worldwide. However, there is still a distance to go between the availability of the technology, and its accessibility and affordability. SMEs have to take a practical approach to adopting technology. They need rapid return on investment to stay solvent. Without the financial and technical resources available to most large companies, they need to consider their immediate cash flow, as well as the ease and speed with which they can deploy new technologies and systems, to maintain profitability. Let’s look as the opportunities and challenges that face an SME that wants to practice global commerce. Today, the United States has the greatest number of Internet users in the world. Yet even in the US, the majority of SMEs are still using dial-up telephone lines to access the Internet. Dial-ups have disadvantages such as: relatively low data rates; noisy phone lines that can disconnect in the middle of a transaction; and, at times, difficult access to the Internet because of the limited number of dial-up connections available through the user’s Independent Service Provider (ISP). The number of users who are adopting faster broadband connectivity is rising at a rate of 66 per cent per year, but growth is limited by the cost of this service – both to the service provider and the end users. The costs to expand coverage by DSL and cable data services, both of which require a ‘wired’ infrastructure, can only be borne by large telecommunications companies (telcos). When these services are available, they often cost $100 or more per month for access. This is well beyond the financial capabilities of many SMEs. We need to look seriously at alternatives such as wireless broadband to provide lower cost, more effective, and faster ways to deploy infrastructure for broadband access. ‘Wireless’ infrastructure is particularly effective because it is inexpensive to install and maintain. Wired solutions require large financial outlays to purchase equipment components, such as expensive optical fibre cable, to acquire the rights-of-way and to deploy the cable over large areas. With wireless, small regional telecommunications companies can afford to deploy infrastructure, even in low population or remote areas, without needing the money to support extensive upfront infrastructure costs. In addition to being easier and more cost-effective to deploy, the ability of local regional telcos to develop a wireless infrastructure to reach additional SMEs and residences will create jobs and improve communications to reach the developing regions. Wireless deployment utilises small, light equipment that can be positioned almost anywhere – indoors or out. An added benefit to wireless deployment is that it can deliver voice service via the Internet as well as broadband data service. As we look beyond the more developed countries and the major population centres around the world, voice service, as well as data service, is in desperate need. Many areas without a wired infrastructure in place have not been able to keep up with the demand for basic telephone communications. Wireless solves that. Voice can be deployed cost-effectively using wireless Internet to bridge the ‘last mile’ to the end users. The last mile, in telecommunications parlance, is the work it takes to connect an end user in a home or business to the ‘trunk’ or central telecommunications unit. Small regional telcos using wireless are able to quickly deploy localised service and cost-effective Voice-over-IP and Internet data connections at competitive rates and without the huge overhead of a large telco. Using a cost-effective wireless solution to bridge the last-mile, regional telcos can extend additional applications such as voice, Internet, video and hot-spots (for wireless Internet connection away from the home or main office). These services provide increased revenue streams for the telcos, enabling them, in turn, to afford to provide even more coverage and services. As more connectivity is put into place, SMEs can take advantage of simple devices such as Personal Digital Assistants (PDAs) and electronic kiosks to expand their reach to local and global customers. An advantage of modern telecommunications is that these devices can be easily localised in terms of language and service offerings, and they can be placed almost anywhere. For example, regional telcos can create ‘wireless’ access to kiosks and enable community access to voice, Internet, and video communications much more quickly and affordably than larger telcos that depend on wired services and have higher overhead. There are roadblocks, though, to this sort of global access. Governments need to seriously re-evaluate the exorbitant fees that many charge for the licensing of wireless spectrums. When these spectrums are available to regional telcos at affordable prices, they will be able to deploy wireless more rapidly. Wireless, as noted, is a less-expensive, faster way to reach SMEs and residences. Once governments realise the benefits of minimising regulations, the challenge to reach the SMEs will depend on how fast regional telcos can install wireless technologies. It is possibly to deploy wireless technology in a new area in a matter of weeks. In addition, regional telcos can assist in the building of a well-designed ‘wireless wide area network’ technology, which allows extended range for wireless service, as well as more efficient utilisation of the spectrums they are licensing. Based upon a decade of experience with broadband, I believe that a reasonable government regulatory policy, together with flexible, easy to operate and reliable wireless technology, will overcome the challenges of expanding broadband rapidly and affordably, and thus bring it within reach of more and more SMEs. It has been our experience with wireless systems in the Asia-Pacific region, particularly India and China, that regional telcos are able to obtain a 70 per cent return-on-investment on their wireless deployments within three months and can turn a profit within four to five months of rolling out their wireless systems. This business model is applicable throughout the Asia-Pacific region because, first, this is a magnitude less costly than deploying wired infrastructure and second, government regulations in much of the region are less stringent. What should the industry do as a whole to bridge the ‘last-mile’ problem? Many telcos have invested enormous amounts of capital to lay out fibre. It is, however, extremely costly to extend fibre to SMEs that are not directly on the path of the cabling. The industry needs to accept and promote wireless as the most cost-effective way to reach their users. As communications becomes globalise, and demand for access continues to grow in less populated and less accessible areas, it is no longer reasonable for telcos to expect that their old model – wiring every households and SME – is viable. It is costly, and time-consuming to ‘wire the world,’ and expensive fibre cabling also has distance limitations that inhibit availability and quality of service. The wired model is not viable for expanding affordable broadband – or even, in some cases, voice – service to the mounting number of SMEs that wish to participate in global markets. It makes more sense for governments, telcos, and local business owners to work together to take advantage of the wireless access technology that can help level the playing field of global commerce. Governments benefit from increased business opportunities and trade; telcos can increase services and capture additional subscribers through affordable modular growth that supports a pay-as-you-grow business model; and more homes and SMEs gain access to the rich informational, communications, and commercial potential of the Internet.