CABL Forum - Re: WiMax

Has satellite TV finally spotted the on-ramp to the information superhighway?

While phone and cable companies have long been able to offer customers an Internet connection, technical limitations have prevented satellite competitors DirecTV (nyse: DTV - news - people ) and EchoStar Communications (nasdaq: DISH - news - people ) from selling their own. Now the two companies look set to roll out an Internet connection that might even give them a leg up on the competition.

Industry observers predict that the two companies are likely to work together to build a wireless broadband network, a notion that DirecTV Chief Executive Chase Carey hinted at again on Wednesday. While Carey said he wouldn't have details about a wireless rollout before the end of this month, he acknowledged that the company is pursuing a strategy and could potentially partner with a rival, at least to build the service out.

It's a refrain he also made at the start of February when he said that, "We would probably look to do something that is an investment in an entity that takes responsibility for the initial build-out, and not something that falls beyond the investment," he said.

If the two companies do work together, they're likely to invest in a network that would use WiMax, a long-range data-broadcasting technology pegged as a successor to Wi-Fi, the wireless networking technology that can only be used within a few hundred feet of a transmission antenna. Some reports have suggested that the companies might kick in $1 billion each to build the network, though In-State analyst Norm Bogen pegs the cost of a nationwide WiMax network at around $3 billion.

Even so, that could be money well spent. While both DirecTV and EchoStar already have partnerships with telcos in order to offer bundled DSL and phone service, they've long wanted to own their own pipe. That would give them the chance to offer a "triple play" competitive with the voice, video and data services that cable companies already offer and that telcos are beginning to roll out.

This alone would be worthwhile for the satellite companies, who have specialized in building customer bases in rural areas where cable and DSL penetration remains spotty. DirecTV added 1.2 million subscribers in 2005 to bring its total base to 15 million, while EchoStar added 1 million subscribers last year to end 2005 at 12 million.

And using a WiMax network could potentially offer even more. The network is supposed to be faster than the offerings from the cable companies and telcos, and, since it's wireless, would be an easier upgrade than traditional pipes. It could also potentially offer bells and whistles that landlines can't: For example, a user could download a movie into multiple devices at once, all in separate locations. That could be useful for both companies, which have said they want to offer their own handheld media players that could work independently of a set-top box.

WiMax is a multibillion dollar technology led by investments from some of tech's leading companies, such as Intel (nasdaq: INTC - news - people ), AT&T (nyse: T - news - people ) and Samsung. It's still nascent: Industry standards for some WiMax equipment were set just last month, and standards for mobile products could happen later this year. But analyst Steve Mather of Sanders Morris Harris says WiMax should be ready for a mass rollout soon: "This might actually work, because WiMax technology is maturing enough to make it potentially profitable."

http://www.forbes.com/home/technology/2006/02/23/directv-echostar-wimax-cx_ck_0223satellite.html

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Re: WiMax