WiMax and 'Jet Blue Economics'

November 17, 2005

Jeff Thompson, the newly appointed CEO of business-oriented wireless broadband service provider TowerStream Corp. was on hand to provide some insights in his keynote at the latest Light Leading Live show, WiMax: From Development to Deployment, held at the Westin Times Square in New York City on November 16th.

Thompson hit on a variety of topics during his hour-long presentation, but he focused on how a startup can build and expand a wireless broadband business in the face of fierce competition from competitors new and old, service and maintain a customers, and exploit the advantages of wireless in getting service up and running quickly.

“It’s 'Jet Blue' economics versus 'Delta' economics,” Thompson told the crowd.

Own the infrastructure, own the air.

TowerStream owns its own metro-ring backbone and last-mile connectivity in the U.S., and this is a key factor in controlling its outlay, according to the CEO: “There’s no monthly recurring costs."

Similarly, the company has been trying to “scoop up properties throughout major markets in the U.S.,” so that when it comes time to place its “pre-WiMax” base stations, the firm can offer customers the best line-of-sight or near line-of-sight connections and set them up quickly.

“Customer acquisition costs are much less expensive when you have prime real estate,” Thompson says.

Unsurprisingly, customers for wireless broadband services are like technology buyers the world over: They want low cost, reliability, high data transfer speeds, and customer service.

More services at lower cost.

One of the keys to working with WiMax and the precursors to this technology is to exploit the new applications offered by wireless broadband. VOIP is a key service for the TowerStream chief.

Interestingly, Thompson has a unique take on the issue of the availability of licensed WiMax spectrum in the U.S., something that many talking heads say could dog the adoption of the technology over here.

“We’ll get rid of the some of the weird 30MHz channels from the proprietary guys,” he chuckles. “Things are actually going to improve.”

Full News Analysis at UNSTRUNG.