Australian Broadband

Wi-Fi Kiosk presentation

2009-03-16T10:10:00.004+11:00

A new presentation on the Handlink Wi-Fi Kiosk is now available on Slideshare - Wi-Fi Kiosk
The unit is now shipping with built-in 802.11n wireless.

The Wireless Kiosk is currently being showcased on the 'Gadgets & Reviews' page by the Slideshare editorial team.

Handlink Coin Based Wi-Fi Kiosk

2008-06-14T22:31:00.007+10:00

The Handlink Wi-Fi Kiosk is a cool combination of retro charm and the latest wireless technology.

Just pop some coins in the slot and your ready to surf the web on any Wi-Fi enabled gadget, whether it be a Laptop, iPhone or any other web enabled gadget.

So finally a good way to spend your loose change.

As a venue owner you can manage these units remotely, so you will know when its time to collect the money.

From August 2008 the kiosks will also include built-in 802.11n wireless. I imagine they will also include a PayPal facility in the not too distant future as this is already available in Handlinks WG-602 Wireless Hotspot in a Box solution.

WorldWide Telescope

2008-06-01T14:04:00.000+10:00

Want to see the same images that scientists at NASA use for their research or perform your own research with those images? Or do you want to see the Earth from the same perspective that astronauts see as they descend to Earth? How about taking a 5 minute break and viewing a panorama of a different city? Install WWT and start your explorations.

Broadband For World's Tallest Apartment Building

2005-08-07T08:26:00.000+10:00

The world's tallest residential apartment building was recently completed on the Gold Coast. Each of the tower's 526 apartments is fitted out with high-speed synchronous broadband thanks to Data FX.

Using a Nortel network, integrator Data FX has been equipped the Sunland Group's new Q1 apartment building in Surfers Paradise, which for a time at least is the world's tallest residential tower.

Designers of the iconic Q1 chose to equip the 80 floors with a network on par with any urban business centre. Apart from the 500 plus apartments, the building also houses conference facilities, ground floor retail outlets, sandy beach lagoon swimming pool, spa, sauna and fitness centre, and Australia's only beachside observation deck.

"There's a misconception that living on the Gold Coast compromises access to world-class business facilities, so Q1 is about to change all that. Not only is the building equipped with an integrated communications network, but residents will also have access to all the facilities they require for business and personal communications and entertainment whether they're permanently based in Q1 or renting a holiday apartment," said Data FX Chief Operating Officer Daniel Thompson.

"One of the unique features of our Q1 solution is two-way Internet access, which means upload speeds match download speeds for a faster, less restricted experience. This means guests and residents can enjoy all the benefits of a super-fast network like video-on-demand and real-time video conferencing.

"As a solution provider for multi-billion dollar residential and commercial developments throughout Australia we're responsible for ensuring our customers - and their customers - get the best possible experience from our technology solutions," Thompson said. "That's why Nortel, with its proven technology, was chosen for Q1, and why we'll continue specifying Nortel for major developments where carrier-grade availability, speed and reliability are simply non-negotiable."

"Service providers like Data FX are increasingly using Nortel's technology to deliver carrier grade services to a wide range of customers such as property developers, neighbourhood communities and multinational enterprises," said Mark Stevens, president, Australia and New Zealand, Nortel.

"The network deployed throughout Q1 means that work does not need to be a place you go, but rather a thing you do," Stevens said. "Using Nortel technology, Data FX has delivered a solution that is designed to give Q1 residents access to the same powerful business infrastructure enjoyed by millions of business users in major financial centres. This means they can enjoy the lifestyle benefits of this magnificent development without foregoing access to the same rich multimedia and networking facilities they rely on for their business. It's literally the best of both worlds."

Big Air - Wireless to apartment blocks

2005-04-30T09:08:00.000+10:00

BigAir, offers what it calls a fixed wireless service. It is targeting business customers and consumers living in apartment blocks who often have trouble getting traditional broadband services.

The technology used by BigAir is a variant of the 802.11 (WiFi) technology used in hotspots and home wireless networks. It requires line-of-sight between an antenna on the customer's roof and one of the company's 10 base stations. Currently the service is only available in Sydney.

BigAir has a range of plans to suit corporate and residential customers. Prices start at $29.95 monthly for users with modest speed and download requirements, increasing to a whopping $499.95 monthly for speeds of 10Mbps and a data limit of 100GB.

BigAir co-founder Jason Ashton says the company will install a service in an apartment building with as few as five expressions of interest from residents.

"Our technology makes it very cost-effective to offer a service," he says. "We put an antenna on the roof and use the building's existing copper wiring to deliver broadband signals to individual apartments."

Ashton says the low latency (the delay between sending and receiving a signal) of the network makes it very suitable for voice over internet protocol services, which are becoming increasingly popular with consumers.

VoIP services allow telephone calls over a broadband internet connection, greatly reducing the cost of national and international calls.

1 Gbps now available in Hong Kong Apartments

2005-04-22T09:11:00.000+10:00

Hong Kong Broadband Network (HKBN) officially launched its 1 Gbps symmetric service for the residential market. Approximately 800,000 households, out of a total of 2.2 million households in Hong Kong, are wired to receive the service. The 1 Gbps symmetric service is priced at US$215 per month.

HKBN noted that its 1 Gbps service is up to 166x faster downstream and 1,950x faster upstream than the advertised bandwidth of the incumbent's ADSL service.

HKBN Premium bb1000 service is being offered on the same metro Ethernet infrastructure that delivers the company's Mass Market bb100 (symmetric 100 Mbps for US$34/month) and Entry Point bb10 (symmetric 10 Mbps for US$16/month) services.
http://www.ctinets.com/

HKBN is installing more than 10,000 Cisco Catalyst LAN switches and more than 800 Cisco routers in buildings throughout Hong Kong. Category 5e copper cables are wired from the LAN switch cabinet to the apartments of each target customer. Fiber-to-the-building (FTTB) was deployed between the buildings using the Cisco ONS 15454 Multiservice Transport Platform (MSTP) and Cisco Catalyst 4507R Switches.

HKBN is also using a Cisco Optical Core network. The deployment includes the Cisco ONS 15454 SONET/SDH Multiservice Provisioning Platform (MSPP); Cisco Catalyst 6500, Catalyst 4500, Catalyst 3350, and Catalyst 2950 series switches; and Cisco 2600XM Series routers. Cisco's ONS 15454 MSPP enables the carrier to converge its legacy voice and data services and a new pay-TV service into a single platform, and at the same time offer Layer 2 and 3 IP services using Resilient Packet Ring (RPR)-ready ML Series line cards. The network enables HKBN to deliver up to 200 digital pay-TV channels via MPEG-2 at 4.5 Mbps to 10 Mbps with DVD visual quality. Its service also features interactive pay-TV elements and enables PC or TV connection with the aid of a set-top box.

Japan MSO Tackles 100mbps Challenge

2005-04-04T09:25:00.000+10:00

By: Fred Dawson

Japan’s largest cable MSO is exploring new techniques for delivering data at speeds of 100mbps and above in response to the challenge posed by 100mbps fiber-based services from Nippon Telephone, Telegraph and other entities.

In what amounts to a preview of how cable operators everywhere are likely to respond to telcos’ expansion to fiber capacity in the years ahead, Jupiter Telecommunications is experimenting with a new “wideband” system developed by Cisco Systems Inc. as a prototype for DOCSIS 3.0, the very high-speed version of the Data Over Cable Service Interface Specifications now under development at Cable Television Laboratories.

At the same time J-COM is looking at the use of fiber in conjunction with an in-building distribution system that would provide support for delivering 100mbps service to multidwelling units, using existing coaxial cable to send the stream to customers on a shared basis.

While the in-building solution would address an immediate competitive need for J-COM, a wideband approach such as the one Cisco is offering will give operators the capacity to deliver IP-based services at speeds of 1gbps and more. Sources report CableLabs is coming under increasing pressure to deliver DOCSIS 3.0 specs, with the latest prognosis calling for completion of a draft for circulation to members by year’s end and possible commercialization some time in 2006.

However, for J-COM and perhaps for other cable operators who experience early fiber or VDSL2 (very high-speed DSL) rollouts in their territories in the months ahead, commercial availability of a standardized approach to expanding their broadband bandwidth may not come soon enough. “It’s a real issue for us as to whether we should proceed with a proprietary system or wait for the standard,” says J-COM CEO Greg Armstrong. “We are taking a hard look at the Cisco system.”

Basically, Cisco’s Wideband Protocol involves integration of multiple digital cable channels or “QAMs” (in reference to the role quadrature amplitude modulation plays in increasing channel bit rates) into a single high-capacity channel that can operate at 100s of mbps as opposed to the 38mbps that any single 6MHz channel can deliver over today’s cable systems. The concept tops earlier channel-sharing approaches to expanding throughput over DOCSIS by breaking up the transmission frames into fragments and “stacking” them so that all fragments are transmitted simultaneously across all the integrated channels. This cuts the time it takes to deliver the frame to a tiny fraction of what it would take to deliver the frame over a 6MHz channel.

As proposed by John Chapman, a distinguished engineer at Cisco, the Wideband Protocol could be used not only for Internet data but also to create a pathway for IPTV over cable networks where the single wideband stream would carry the equivalent of hundreds of digital TV programs. Addressing a recent conclave of cable engineers, Chapman called on the cable industry to adopt a goal of operating a 1gbps IP channel within five years. That speed would consume the equivalent of 24 regular cable channels, leaving 75-80 percent of the 860MHz cable network capacity untouched. “Twenty-five percent (of capacity) five years from now for IP services is not unreasonable,” Chapman asserted.

Using the wideband approach would give J-COM a way to trump the highly publicized 100mbps Internet service NTT is offering in single-dwelling and multidwelling environments. But, for now, the biggest challenge is to at least match what NTT is doing in MDUs, where users share the total 100mbps capacity that comes into the building over fiber and is distributed inside via VDSL. While pushing fiber to every single-dwelling home is not in cable’s game plan, operators can sometimes justify the costs of extending fiber to a building where dozens of potential customers reside.

“The buzz word in Japan is 100mbps,” Armstrong says. “But if you’re a fiber service customer in an MDU, you’re sharing that bandwidth with a lot of people. What we’ve found monitoring various Web sites is that 80 percent of the fiber-to-the-premises customers are experiencing actual throughput speeds in the 18-20 megabit range.”

The trick for J-Com is to give all its customers in the building shared access to the 100mbps, since that is all NTT is doing. To do that, the company needs to run fiber to the building and then be able to get a 100mbps stream onto the in-building coaxial cable. This means it has to find a way around the 6MHz channelization scheme within the 750MHz of bandwidth that is usually employed for delivering cable services.

The company is testing an in-building distribution platform that puts the 100mbps data feed onto the coax spectrum above 800MHz, out to about 1GHz, Armstrong says. This is tricky because, at the high end of the spectrum signals tend to break up faster than they do at lower frequencies, which shortens the distance they can travel on unamplified in-building wiring.

“So far (the system) is working very well, but it’s new technology, so there isn’t any real market experience to go on,” Armstrong says. “The concern I have is operating at those high frequencies and the distance limitations you can run into. But we’re getting a steady 50-60mbps throughput per user, so it’s encouraging.”

Bell Canada 4.3 million servable with VDSL, ADSL2+ by 2008

2005-02-07T10:04:00.000+11:00

Bell Canada 4.3 million servable with VDSL, ADSL2+ by 2008
~ $250/home, 1 HD at 12 Mbps, 2 SD programs 4 Mbps
Video service over VDSL is working so well in 25,000 Toronto apartments, Michael Sabia expects to expand that to 100,000 in 2005. He'll also expand the ADSL2+ remote deployment with tens of thousands of line-powered units installed within 3,000 to 4,000 feet of most homes. Bell will also pass 1 million homes with ADSL2+ in 2005 and speed that build in later years.

Initial plans for video call for a conservative 12Mbps for HDTV and 4Mbps for SDTV on MPEG4. Glen Campbell at Merrill interprets "this as reflection of its 'real world' experience and customer expectations for picture quality." The 8 mbps Paris HD demo was all pre-encoded; 12 mbps for live hockey is more realistic in 2005. BCE estimates ~300,000 apartment units, 2/3 of the total in large buildings in Toronto, Montreal and Ottawa, will cost of C$110mn, $300 (U.S.) per unit. Serving 4 million "Fiber to the node" with ADSL2+ remotes is projected at $220 per home.

Vonage .::. VOIP for Ygnition Apartments

2004-11-25T22:13:00.000+11:00

Vonage® Announces Private Label Partnership with Ygnition Networks

Vonage is the First Broadband Telephony Company to Announce a Strategic Sales Partnership with a Broadband Service Provider Designed for Multifamily Communities

Edison, NJ, December 23 – Vonage, a leading provider of broadband phone service, today announced a co-branded partnership with Ygnition Networks (formerly Interquest Communications) to deploy broadband telephony service to Ygnition’s more than 130,000 Luxury Apartment Units served. These services will be deployed across eight U.S. states: Washington, California, Florida, Colorado, Texas, Utah, Arizona and Oregon. Vonage will offer Ygnition’s broadband Internet subscribers unlimited local and long distance calling throughout the United States and Canada for a flat rate.

Ygnition Networks is the first multi-dwelling broadband provider to partner with Vonage to deploy an affordable telephony service to its subscriber base. Subscribers residing or working in its broadband deployed communities will be offered Vonage’s full array of calling plans. all plans include most of the standard telephony features like caller ID, call waiting and voicemail and a number of proprietary features at no additional cost.

“By introducing our first partnership with an ISP provider that concentrates on connecting consumers within their local residences and single office/home offices clearly illustrates the importance of broadband telephony,” said Cyrus Driver, vice president, Wholesale Sales and Canadian Market.

“This partnership offers Ygnition Networks the opportunity to enhance its company’s offering and revenues, while reducing churn, thereby increasing the return on investment on existing DSL/Cable Modem/T1 infrastructure. Vonage enables Ygnition to offer inexpensive voice services to their customers with near-zero capital investment and operational cost, while leveraging two trusted brand names, Vonage and Ygnition Networks.”

“We are pleased to be working with Vonage,” said Glenn Meyer, CEO of Ygnition. “With a hard-earned reputation for service excellence within our industry, it was important for us to find a Digital Voice partner that we felt comfortable with. It was also important to find a partner that could serve our growing national footprint and Vonage was a perfect fit. We’re confident that our valued subscribers will be well served by this partnership. Along with our new Cable Television offering, Vonage gives Ygnition a compelling bundle of Broadband services to offer our Real Estate partners.”

Vonage .::. The BROADBAND Phone Company

SkyNetGlobal acquires Smart Apartments Pty Ltd for $500,000

2004-03-25T15:00:00.003+11:00

SkyNetGlobal acquires Smart Apartments Pty Ltd for $500,000 in stock and adds 5,000 apartments in Melbourne

25th March, 2004

SkyNetGlobal, (ASX: SKG), Australia's leading provider of wireless broadband solutions, today announed that it has acquired Smart Apartments Pty Ltd, a Melbourne based provider of broadband internet services that targets premier residential apartment buildings.

Smart Apartments Pty Ltd who trade as e-partments, has signed long term exclusive agreements with a total of 14 apartment buildings covering 4,950 homes in Melbourne, and has provisioned 7 buildings with 200 subscribers paying an average of $70 per month. In addition, e-partments has signed an exclusive preferred supplier agreement with Network Pacific Real Estate, who have access to 75 buildings covering approximately 3,600 apartments.

Smart Apartments' properties include many of Melbourne's finest buildings, such as the Melburnian, Rockmans, Regency Towers, Clarendon Towers and Bouverie Close in Carlton.

Under the purchase agreement, SkyNetGlobal will acquire 100% of Smart Apartments' issued shares from existing shareholders for $500,000 through the issue of 6,978,367 SkyNetGlobal ordinary shares. The founder of Smart Apartments, James Brader will stay with the company for a period of up to 3 months to ensure that that the business is successfully integrated with W Home. The company has no debt or liabilities and the transaction will be immediately cash flow positive for SkyNetGlobal.

CEO of SkyNetGlobal, Jonathan Soon said, "The Smart Apartments business is an ideal fit with SkyNetGlobal's W Home business. Both provide broadband solutions to apartment dwellers in large residential complexes. SkyNetGlobal will intergrate Smart Apartments into W Home and offer home automation products to its customers."

"We announced in May last year when we launched W Home, that our target was to sign 10,000 apartments in 2 years, the acquisition of Smart Apartments will make us 12 months ahead of target and provide us the base needed in Melbourne."

"W Home now has No. 1 market share in both Sydney and Melbourne, with a total national coverage of more than 10,000 apartments. Such a solid foundation will allow us to expand at a greater pace over the next 12 months with the objective of increasing our target revenue and earnings substantially," said Mr Soon.

ABOUT SKYNETGLOBAL
Listed on the Australian Stock Exchange (ASX: SKG) and headquartered in Sydney, SkyNetGlobal is a leading innovator of wireless broadband solutions specialising in 802.11 wireless (WiFi) & Home Plug powerline technologies. SkyNetGlobal's solutions include a global remote access service called "Connector" providing internet connectivity to 5000 wireless hotspots worldwide, and W Home, a smart home system designed to deliver efficiency, convenience and cost savings for apartment dwellers, offering broadband and home automation products. For more information please visit our website at www.skynetglobal.com

Packaging and Promotion - MDU

2002-09-13T12:39:00.000+10:00

Weathering Uncertainty
Integrated Infrastructure and Strategic Marketing Provide Protection
By David S. Stehlin

The new millennium dealt a one-two punch in the form of uncertainty and instability to the service provider market, particularly to CLECs. Widespread user demand for mega-bundles of communications services--comprehensive service packages, offered by a single provider, ranging from long-distance telephone to home security systems--did not materialize. Not long ago, mega-bundles were touted as a sure consumer draw by upstart and major U.S. telecommunications providers. Amid intensifying financial pressures, many CLECs have dropped out of sight. Non-facilities-based providers were especially hard hit.

In order to survive--and thrive--in this new capital- constrained environment, service providers now need to review their business models, keeping one concept foremost in mind: integration. It is crucial that carriers adopt an integrated marketing plan and an integrated communications infrastructure. CLECs must develop a cohesive residential marketing strategy, but tailor bundling, pricing and services to the distinct single-family unit (SFU) and multiple-dwelling unit (MDU) market segments. Providers also must design and deploy an integrated infrastructure that facilitates the delivery of multiple services, fast Internet access and remote service provisioning.

Unless they strive for this level of integration, even brand-name service providers will continue to struggle in today's changing marketplace.

One Size Doesn't Fit All
Perhaps it was late entry to the residential market that initially blinded CLECs to the need for an integrated residential marketing strategy. Whatever the reason, few CLECs currently have such a strategy. Even fewer providers realize that they cannot penetrate the residential market with a one-size-fits-all marketing plan.

The typical CLEC that now offers converged communications services is an unknown to SFUs and MDUs, and must conduct face-to-face marketing with consumers. Beyond that fact, the provider that tries to offer identical bundling, pricing and services to MDU and SFU market segments is likely to run into trouble. There are important distinctions in what these buyers want in communications services.

Separated by just a few miles, MDU and SFU residents sharply differ in the communications services they want most. The single-family buyer wants several family members to be able to be online or to watch TV, separately and at once, without requiring multiple connections or cable modems. The SFU also will welcome bandwidth-on-demand, which delivers higher-than-normal bandwidth on a per-usage basis.

Because most providers currently use both copper and coaxial cable to deliver residential services, customers who want broadband service now must pay several providers for multiple connections into the home. However, if the service provider installs an integrated infrastructure, multiple members of each household can have separate, simultaneous television or Internet access, all from a single connection into the home.

The provider that offers bandwidth-on-demand will appeal to SFU families that want higher bandwidth for future needs, such as videoconferences with distant relatives and interactive gaming for their children. Bandwidth on demand also will interest work-at-home parents who need to telecommute to their corporate servers.

Reaching Dual Audiences
While the service provider targeting the SFU segment must market directly to homeowners, the provider selling to MDUs must reach the resident as well as the property owner or manager. If bandwidth-on-demand and multiple simultaneous connections attract SFU subscribers, remote service provisioning is a plus in the MDU market.

The average MDU resident moves every 1.6 years. This tenant churn requires the provider to roll costly trucks and crews to the property to turn on and off service. In addition to competitive communications services, the MDU tenant and property owner want easy, quick and efficient service turnaround.

The provider that can remotely provision services, without rolling a truck to the property, has a sales advantage that will interest apartment owners, managers and residents alike. With remote provisioning, everyone benefits. Providers avoid costly truck rolls, property managers offer residents better service, and tenants no longer have to wait for a technician to connect or disconnect service.

MDU property owners and managers also want to be able to offer localized video information to their residents, for example, about a weekend barbecue or upcoming weather. Property mangers would like to augment this localized information with local advertising from restaurants and shops near the community. Most MDU cable systems already have local video channels. However, the provider that allows the property owner to more easily inject localized information, without having to contend with a complicated central headend facility, has a sales advantage.

Integrated, But Distinct
Amid current market constraints, providers that deliver smaller, simpler service bundles are outperforming competitors that offer mega-bundles. Providers that have targeted smaller service bundles to specific market segments have been rewarded with higher revenues and more loyal customers. After developing smaller bundles, one major provider reported that its customer turnover fell 20 percent for bundled subscribers.

While the industry has moved away from the mega-bundle, at least for now, it is clear that single-service providers are in trouble. Offering a single service--even a perceived "hot" service such as high-speed data access--cannot produce adequate revenues to pay for the network the service provider must install. Single-service providers compromise their ability to scale, to reduce costs and to increase revenues.

The Yankee Group (http://www.yankeegroup.com/) predicts that over the next year, several standalone MDU service providers will expand their offerings beyond just high-speed Internet access. Yankee predicts that video applications will become a critical part of these providers' product portfolios. Attempting to become more competitive, some leading standalone, high-speed Internet access providers already have formed partnerships with other providers to offer additional services to customers.

Integrated Infrastructure
To succeed in today's volatile market, the service provider also must plan and employ from the onset an integrated communications infrastructure. An integrated infrastructure goes hand in hand with an integrated marketing plan, and requires the same level of foresight and strategic thinking.

I have tracked with interest the success of a current provider that not only has an integrated residential marketing strategy, but also owns an integrated infrastructure. Over its built-from-scratch, high-capacity, low-cost fiber network, this provider delivers bundled telephone, cable television and high-speed Internet services. The company targets its service only at customers in the most densely populated areas in the United States. This single network is expected to be cost-efficient today and in the future as new services are developed. The provider anticipates being able to offer more robust products and enriched services without having to upgrade its infrastructure.

With the exploding demand for bandwidth, this provider and others have found that they must be flexible in how they design and deploy their network. Flexibility is required if carriers are to be able to provide the services that consumers will want tomorrow.

Much like developing an integrated marketing plan, strategic thinking is required to design and deploy an integrated communications network. While it may be daunting to aim for this level of integration, consider what happens when a service provider does not.

I recently read of an overbuilder that is building a fiber network to carry data traffic only, and a separate hybrid fiber/coax (HFC) network for video and voice. In addition to absorbing the capital costs of installing two networks, the overbuilder must hire separate groups of technicians and buy different equipment to maintain both networks. The maintenance costs of running two networks promise to be substantially more than if the overbuilder had installed a single, integrated network from the beginning.

Besides offering lower long-term costs, an integrated backbone can help the provider deliver the localized information that is so appealing to MDU property owners. The provider now has adequate bandwidth to be able to offer localized video channels, bandwidth-on-demand and similar services. An integrated infrastructure can enable the provider or apartment manager to remotely provision video and data information and programming to better serve the subscriber.

Finally, by deploying an integrated communications infrastructure before consumer demand exceeds the provider's resources, the carrier can tailor the suite of services offered to residents. An integrated, scalable infrastructure allows for remote service provisioning, which gives the provider an inexpensive way to market to consumers not currently receiving the full suite of services. The service provider can cost-effectively market to the particular consumers it wishes to reach.

David S. Stehlin is president and CEO of OnePath Networks Inc. He can be reached at dstehlin@onepathnet.com or (602) 514-1800.

Broadband and Cable for Multifamily Properties

2002-09-13T09:53:00.000+10:00

Broadband and Cable for Multifamily Properties
"The year 2002 will prove to be a watershed year for industries involved with Broadband Multifamily Properties," said Robert L. Vogelsang, Chairman and CEO of National Satellite Publishing and a 40-year veteran of providing cable and Internet services to properties.
"The last year saw a great number of companies fail who tried to provide broadband and bundled services to residential properties and because of that two new dynamics are coming into play that have the potential to inspire the growth of a very strong industry.
"First, providers, whether they are incumbent or alternative, are realizing that to service a multifamily property it takes much more than knocking on the door and dropping off a wire. Becoming educated in the nuances of this market often times will be what makes the difference between success and failure.
"Secondly, and most importantly, property owners are realizing they can no longer play a passive role in technology decisions. When companies repeatedly come onto a property and fail, it is very bad for the rental business and because of this property owners are realizing they must become much more active in the decision making process. Years ago, providers would almost never be asked questions about their technology, infrastructure or balance sheet. Today some owners are beginning to rightly demand these answers.
"Throughout 2002 we will continue to see the influence of the educated property owner, which in turn will raise the bar for the entire industry for not only the next year but for years to come."

ADI interview - provider to large Apartment buildings in New York

2002-09-04T12:40:00.000+10:00

nPost.com: I am here with Marc Josephson of ADI, Advanced Digital Internet, thank you very much for meeting with me today. What exactly is ADI?

Marc: ADI was started a little over two years ago to provide very high speed Internet access to large residential building in New York City. We currently have 70 building in New York City, and have recently launched in Philadelphia. Our goal is to bring a high speed T1 or T3 lines into the basement of a building, install a router, and run Ethernet cables up to each floor. We initially started wiring each apartment via Ethernet cables, but we found that it was too expensive and so we started providing wireless nodes based on 802.11. Our customers have wireless access from their apartments, and this solutions saved us the cost of doing the horizontal wiring. The users also now have the flexibility provided by a wireless solution, and it is also much more aesthetically pleasing in that we have wired some very old apartment buildings and they did not want wires stapled to the ceilings of their hallways.

The advantage of the Wireless LAN is that it has an 11-megabit capacity, which is more than enough to handle residential Internet access. It has been a good foundation for us, and we are now beginning to upgrade to 802.11a, which is 54 megabits. With that we will be able to start delivering video and other high bandwidth applications.

nPost.com: How do you market these services? Is it directly to the building owner, manager, or the end user?

Marc: It is a combination. First of all, in order to build the infrastructure such as installing the wires, transmitters, etc. we have to have approval from the landlord. The first thing we do is we meet with the building owner, and determine if they are interested in letting us provide service. If they are, we then perform a site survey to determine the best way to approach that building. Doing this we are able to determine the cost of wiring each building, and we will then go back to the landlord and reach an agreement of whether or not to move forward. If both parties are interested we will then enter into a Building Services Agreement, which gives us the permission to install wires, routers and transmitters.

What we look for is the active cooperation of the building owner and management. While we sell directly to the end user we don't want to barrage people, stuff mailboxes, etc. We have found the most success if the building owner or manager sends a letter to the tenets mentioning our services, and providing ADI contact information. We will also arrange to do a lobby presentation, where we typically have a couple laptops with a wireless connection and streaming media presentation for people to take a look at when they arrive home from work.

nPost.com: Do you also provide the wireless connection for their desktop or laptop?

Marc: Absolutely, the great thing is that we started doing this when Windows 95 was the norm, and installing a wireless connection required a trained technician. Now Windows 2000 and Apple's AirPort have this capability bundled in. It is now plug-n-play, and the software installation is quite trivial. At least half of our users self-install and the other half pay us to have a technician come in and make everything work.

nPost.com: It is very capital intensive to wire a building, and you don't start wiring a building with customers already lined up.

Marc: That is an excellent point, and I actually skipped a step. After we figure out the engineering we like to perform a survey of the tenets, whether through the owner or ourselves, to determine the level of interest for our service. If there is a very low level of interest we are able to tell the owner that the deal doesn't make sense and save our capital for buildings that do have the interest. Also, as part of the Building Service Agreement we also give a free network connection to the Super or the doorman.

nPost.com: How many users are required to make a building deployment viable for ADI?

Marc: The rough rule of thumb is that we require about 20 customers in one building to break even. With the communication expense of bringing a T1 or T3 to the building, and we also have the one time expense of the routers, the cables, and the transmitters, which we amortize over a three-year period.

nPost.com: Your wireless solution really enables you to minimize your costs associated with adding additional users.

Marc: After we have been in a building for three to four months penetration really begins to ramp up.

nPost.com: What are you seeing as your average penetration for a New York apartment building?

Marc: Well, we are seeing about a 30% penetration after the first year, and at the end of the second year we are getting closer to 40%.

nPost.com: From an economic standpoint you are limited to apartment building with greater than 100 units.

Marc: Any smaller, and it is really risky for us. We have done a few brownstones that have 10 to 15 apartments and we provide a flat rate for the whole building. That solution has worked well for customers that don't have access to Time Warner Cable or DSL. Each tenet will typically pay $50 per month, which is much more than normal, but at the same time they have access to almost unlimited bandwidth.

nPost.com: What has been your competitive positioning against Time Warner Cable, Excite@Home, and DSL?

Marc: We are looking for building in which there are no alternatives, where we can be the only solution. In building where these are both DSL and Cable Modem we find that we get the highest proportion of users because we guarantee the bandwidth. A user with a Cable Model shares that bandwidth with many others, and DSL is limited from a bandwidth standpoint. At peak periods both of those other technologies slow down because of the number of users that are online. When we sign up a new customer we provide different levels of bandwidth with associated pricing.

nPost.com: How do you ensure that each user has access to their bandwidth level?

Marc: We monitor the bandwidth used, and as soon as a building reaches 75% of their capacity we order more capacity to the building. We have migrated from T1, which have 1.5-megabit capacity to T3, which have 45-megabit capacity.

nPost.com: How is the laying of the T1 and T3 cables facilitated? Does ADI actually lay the cable or do you work with local carriers?

Marc: We use local carriers such a Verizon, ConEdison, and Level Three.

nPost.com: With wireless LANs one of the major issues is security. How is ADI approaching security and what is it doing to ensure it/

Marc: Couple fold. We employ an encryption program, and we have set up a VLAN for each user. The VLAN provides an encrypted tunnel to each user, although a sophisticated hacker could break it, just like they can break into anything. Our system is not perfect, but it is much more secure than other solutions.

nPost.com: Exploring your growth strategy; do you employ feet on the street working with Property Managers, building owners, etc.

Marc: Yes, we have a dedicated sales force. We have also been able to develop lasting relationships with the Property Managers that we have worked with which has led to significant sales via word of mouth. Our direct sales force also comes from the Real Estate industry, and has a lot of contacts and experience in this area.

nPost.com: You mentioned that you also provide a wireless capability to the building Manager, Super or Doorman, how does that then work into your BAM Software Solution?

Marc: BAM or Building Assistant Manager was a software package developed by a Building Superintendent in the Trump Organization. He had been managing high-end properties within that organization and was very highly regarded. He wrote his own software to help manage the properties. The functionality is incredible, but the problem was that this was his first programming job, and he was learning as he went. The modules don't follow a consistent architecture, so we acquired the program from him and have rewritten most of it. He had the insights, and the requirements to write a dynamic product.

nPost.com: He knew his needs.

Marc: Exactly, from that standpoint the software is excellent. One of the modules he had developed for the software is one called Package Tracking. You get a large apartment building and a lot of the packages arrive during the day, when the tenets are off at work. The tenet gets home and there is a different doorman on, and they don't get notified that their package is waiting. We took the functionality he had created for tracking packages and put it into a stand-alone module. We then added a bar code scanner, which logs in the package information to the computer, the Addressee, date, time, etc (from UPS, FedEx). Once a package is logged in the software automatically sends an email to that resident notifying them that they have a package waiting.

nPost.com: The market for high speed Internet access has received a lot of press lately with the bankruptcy filing by Excite@Home and the financial straights of DSL providers. What is it going to take to be successful in this market?

Marc: @Home built a wonderful broadband network. They also figured that they needed to develop a portal so that they could grab the users. Not only would they be the network, but would also be the content play. We also worked with a number of Real Estate owners who convinced us that we needed to do that as well, and we developed one that no one uses. Yahoo! and Excite do a much better job than we ever could. We had to decide which business we wanted to be in, was it providing Internet access or being a portal? We decided that our core strength was obviously Internet access. With the collapse of Internet advertising that model is no longer viable.

nPost.com: You decided to focus on your core competency; Internet access, how did that help you?

Marc: We have been able to do something, which is extremely difficult, which is to put together reliable high speed Internet access and be able to make a profit. Which is why we are one of the last high speed access provider that is not part of a cable company.

nPost.com: Many providers have had major issues in solving the issue of the "last mile". What were the factors that impacted you in driving a profitable last mile solution?

Marc: How much time do we have? It requires solving multiple problems simultaneously. We took a very strategic look at the business and tried to determine the rates of decreasing cost in different components. If you came up with a solution for a problem three years ago you will have a much different structure today. Going forward it is also going to be very different. The trick is to design an architecture that can adapt with the structural changes over time.

nPost.com: The network has to incorporate as much flexibility as possible, because you can't determine where the changes will be.

Marc: Well, were able to accurately guess where the changes were going to be made. One key was that we took a look at where the greatest improvements in hardware price performance has been, consumer electronics. As PCs became consumer electronics they began following Moore's Law. Every year, they became better, cheaper, and faster than the year before. Communications equipment has improved, but nowhere near as fast. The phone business has not really seen that dramatic type of improvements, which is one reason it is so difficult to compete in the phone business. Take a look at LAN equipment; Ethernet routers, hubs and switches price points. You can now buy an Ethernet switch for about $50, which is as powerful as one that cost $1,000 three years ago. We have tried to build our infrastructure on Ethernet equipment versus communication equipment. So that over time our components are become cheaper and more powerful.

nPost.com: What have been some of you keys to success in starting ADI?

Marc: Very simple; hire good people and be very frugal. I tell my people to be very careful with the money that they spend, because you can only spend it once.

nPost.com: What do you see as a key to success in this market? Is it to continue and grow your base of NYC customers and the number of service offerings your provide, or is it to expand your model nationally?

Marc: It is both. On the residential side we are finding the added values and services are getting a lot more attention than they used to. Although, they aren't a large moneymaker yet, but we believe they will be. Just Internet access is enough to provide a viable business, and if we can make a profit providing Internet access all these other services are additional gravy. Whereas a lot of our competitors constructed business models that required them to sell a bundle of service in order to make money, which clearly didn't work. With a lot of these bundled packages some of the products are nice, and some are so-so.

nPost.com: And consumers want the best in every category.

Marc: They are willing to sacrifice a little if the product or service is really convenient or they are getting something special.

nPost.com: Do you foresee providing services such as Movies on demand, Internet telephony, etc. through your network?

Marc: For the last four years I have been saying that voice over IP is right around the corner. I just haven't got the right year and or decade as of yet. What has happened is that the long distance capacity issues have forced down the cost so dramatically that there was never an economic break-even point for voice over IP. The technology works, it just isn't economically viable.

nPost.com: And video?

Marc: We are specifically planning to do video, and we have actually developed a technology for video on demand that works. You can actually see the demo behind me (points to server and video equipment behind him in conference room) that we have set up for a demonstration that we conducted yesterday.

nPost.com: Another important factor is that you provide a service that users actually pay for. Having just resigned from Intellispace what are your plans moving forward both with ADI and other pursuits?

Marc: Well one of the key reasons I resigned from Intellispace was that I hired a bunch of really good managers who were really running the day-to-day operations. With their model it is now much more of an evolutionary approach to the business. It no longer requires the dramatic change that I could bring to it.

Also, the events of September 11th, 2001 really got to me, and I decided to devote a significant amount of my time in Pro Bono work for the City (NYC) and the Federal Gov't. The goal here would be to make the telecommunications infrastructure more reliable. I have been working with the Mayor's Office, and I am meeting with some Senator's and Congressmen next week, and I have been meeting with other Business and Community leaders in the New York area to say how do we facilitate a more robust communications infrastructure

MDU Take up Rates

2002-09-04T09:17:00.000+10:00

According to Clyde Holland, now managing partner of Vancouver WA.-based Holland Partners, (previously group managing partner of Trammell Crow’s West Coast division), the penetration rate in the buildings he helped install in 1999 and 2000 is now between 25 and 30 per cent. Holland points out this is four times the national penetration rate for high-speed Internet access, which he claims stands at about six per cent.
“It’s basically on a steady growth curve,” he said of the ReFlex take-up rate, “though obviously the biggest pop is right at the beginning.”
Muse notes that the company targets a penetration of 10 per cent within the first 30 days of being in a building to take advantage of early adopters and get revenues flowing. Actual experience is that it hits between 9 and 15 per cent in that period.

Bringing Broadband to your Tenants

2002-02-13T11:29:00.000+11:00

What Property Owners are Thinking & Doing
By Amy Helland, Cahners In-Stat Group
They all say they want it, they all say they need it, but what are property owners actually doing to bring broadband to their tenants? Cahners In-Stat Group recently completed a study surveying over 200 property management groups on their actions and intentions to make their buildings broadband enabled. The sample group included both small independent management groups and large Real Estate Investment Trusts (REITs). 44 percent of the respondents' portfolios included only office buildings, while 34 percent of the portfolios included only residential buildings. 22 percent of respondents had portfolios comprised of both residential and office buildings.
While demand for broadband has been stated and restated exhaustively, the heart of In-Stat's survey was to determine what property owners have actually done to prepare their buildings for broadband and what are their true expectations of the service. Among the factors examined in determining the extent property owners have embraced high-speed in their buildings are the installation of specialized wiring and the implementation of a community portal.
Of the overall respondent pool, 54 percent had installed specialized wiring in at least a portion of their buildings. For the purpose of the survey, specialized wiring was defined as CAT 5 or higher twisted copper pair or fiber. The majority of those that had installed such specialized wiring held a pure or partial office building portfolio. The installation of new wires is much more attractive in the business market where the cost is more easily recovered through subscriptions to fuller, higher revenue packages. Fiber is gaining an increasing share of deployments in those commercial buildings that are categorized as Class A based on the tenant expectation and revenue potential. While fiber is becoming increasingly important, much of the market is still served by existing wire solutions, this is especially true in the residential market.
The implementation of a community portal was also selected as an indicator of the extent to which technology had been integrated into the building's operations. These portals are often offered as part of the solution provided by an in-building provider. Community portals offer the building owner and tenant a variety of conveniences. For the property owner, portals offer the potential to streamline management through message posting, maintenance request submission, and bill paying. The portals also offer the potential for an additional revenue source through local business advertising, however this potential has not widely come to fruition. For the resident, the portal offers the flip side of convenience through simplified bill payment, service request submission, and community notices. Portals also offer the capability for residents to post messages for other residents.
The adoption of a community portal was less prevalent than the installation of specialized wiring: only 23 percent of total respondents had a community portal available at their properties. Portals were more prevalent in the office properties than in the residential communities. Many building owners are skeptical about the value that a portal offers, as only a small percentage of the tenants, those subscribing to the in-building broadband provider, will have access to the network. The value of these community portals will increase exponentially as these providers' penetration rates increase.
In addition to examining the building's broadband capabilities, the survey also explored the broadband tendencies of these building's tenants. From the service provider prospective, there are four primary types of tenants:
* Those that do not have broadband and are uninterested in the service;
* Those that do not have broadband because they are unsatisfied with available service;
* Those that do have broadband with another provider
* Those that are their subscribers
It is important for the service provider to understand the composition of their potential market when they approach a building.
The majority of property owner respondents indicated that less than 25 percent of their building's tenants subscribed to broadband services. However, 20 percent of respondents indicated that a full 100 percent of their building tenants had broadband service. These two clusters of respondents, representing opposite ends of the spectrum, indicate that there is great diversity in buildings and the tenants they house. These two clusters suggest that there are two distinct subgroups in the real estate market-those properties that attract technology adopters and those properties that do not attract technology adopters. In order to be successful in provisioning broadband services, providers must accurately assess which type of properties a management company holds, or which properties within that company's portfolio that houses technology adopters. Generally these properties can be identified by a handful of key selection criteria including geographic location, size, and rent. Typically those characteristics that define the Class A real estate market will also define the subset of buildings that offer the best potential client base. These buildings are located in an urban environment, they house a large number of tenants, and their tenants have the discretionary income to afford high rent real estate.
While it is extremely important for a service provider to assess the potential for broadband adoption among a building's tenant base, it is also important to acknowledge those tenants' preferences and what the competition might be. Early in the evolution of the in-building broadband market, these providers, what were then called BLECs, hoped to possess exclusive contracts with the building owners. However, in an October 2000 ruling, the FCC specifically ruled against such relationships in the office building market (there is yet to be a specific statement on the residential market). Because the in-building provider faces competition from traditional, CO based providers, it is interesting to see what type of penetration rates these providers have obtained. According to the survey, 38 percent of building owners indicate that over 25 percent of their tenants subscribe to broadband services from a BLEC provider. Considering that the generally acknowledged penetration rates loom around 10 percent, the survey has highlighted instances of substantially higher penetration rates. Penetration rates were generally higher for in-building providers in the business market and were very low (5 percent or less) in the residential market.
Perhaps the key concern for in-building providers in today's market is how property owners perceive them. In light of the lackluster performance of many providers in 2000, many providers have reason to be skeptical about the validity of in-building providers. However, according to the survey respondents, many property owners are satisfied with the performance of their provider and many of those providers that do not currently have a relationship with a provider would chose to work with an in-building provider as opposed to a traditional provider.
The MTU broadband market is evolving at a rapid pace: old models are being discarded and new ideas embraced. The transition that has occurred in the past 12 months in the market, with many players exiting the market and a few new moving in, has left the market largely open. An open market represents the potential for service providers to grow their existing base and create market share. However, an open market also places the property owner, and ultimately the tenant, in a position to choose from among the options. As the survey results expose, there is great potential in the MTU market for those providers that are smart in t6heir pursuits and creative with their offerings.
About the Author
Amy Helland is an analyst with Cahners In-Stat Group. The author may be reached with questions or comments via email at ahelland@instat.com.

What Went Wrong: Broadband Delivery to the MDU

2001-12-04T09:47:00.000+11:00

Tenants want it, property owners want to offer it, and service providers want to deliver it, yet in-building broadband deployment to the multi family environment continues to struggle. With the list of failed providers continuing to grow, it is evident that there is still a kink in the strategy. Why is it that given the demand expressed by tenants and the availability created through in-building deployments, that this market has not exploded?
While the list of problems is long and varied, it can be summarized in three principal failings: low implementation of expressed intention, inherent disjoint between expenses and revenue, and dissimilar expectations among "partners."
The first issue of intention and implementation consists of relatively low number of apartment dwellers who have actually adopted broadband services despite the high percentage that express intent to do so. This disparity has resulted in a broadband penetration in apartments of less than 5%. In-building providers have fared slightly better usually maintaining a 5-10% penetration . However, these rates are not sufficient to create a sustainable deployment.
The second issue of revenue not meeting expenses stems from residential broadband's model of mass subscription at relatively low service fees. Consumer broadband services deliver a much lower per subscriber revenue stream than do business services, thus requiring more residential tenants to subscribe in order to generate equivalent revenues. With the current 5-10% penetration rates , providers are not even able to cover the monthly expense of a T-1 uplink, let alone the capital expense, maintenance expense, and various other costs associated with deployment. Until more subscribers sign up, there will be an unfavorable inequality between expenses and revenues.
The final issue is a divergence in expectations from providers and owners. While property owners are almost unanimous in understanding the importance of introducing broadband to their community, there is no consensus on how it should be delivered and where the responsibility should rest. A new model is being considered by many providers that distributes the risk/expense of a deployment between the owner and the provider. Yet, only a small percent of owners have truly expressed support in this model.
Compared to hotel management companies, apartment real estate owners are more resistant to the capital ownership model being endorsed by service providers and equipment manufacturers. While apartment property owners are hesitant to make the capital purchase or lease, they continue to want financial rewards. Furthermore, property owners do not want to become heavily involved in the administration of the property's broadband solution-for the most part, owners do not want to be in the service provider business. They are reluctant to commit their leasing agents in promoting and managing the service.
These three factors paint a very difficult picture for the service provider in today's market. However, logic and market forces favor providers. Property owners are beginning to realize that it is to their benefit to aid providers in creating a sustainable deployment model. They are realizing that when providers file bankruptcy due to an unsupportable model, leaving the property without broadband service, the cost to the property is greater than if they supported a shared risk model. Furthermore penetration rates are beginning to improve as providers devote more attention to each particular property and are more selective in their choices of where to deploy. Finally, as more traditional providers move into the market, with more resources at hand, the profitability of in-building deployment will increase.
While the barriers impeding success loom large, the in-building market is built on innovation and improving the standard, and no doubt these elements will be self directed as the market continues to emerge.

Venture Capital Notebook: Phoenix rises from dot-com dustbin

2001-11-18T09:48:00.000+11:00

Friday, November 16, 2001
By JOHN COOK
SEATTLE POST-INTELLIGENCER REPORTER
Glenn Meyer has heard the names before: scavenger, vulture, bottom feeder.
But Meyer prefers to think of his four-month-old Seattle company -- InterQuest Communications -- as something much grander: a phoenix rising out of the dot-com ashes.
InterQuest, which announced $3.1 million in venture funding this week, is trying to create a business out of the wreckage of the dot-com bust by buying up bankrupt high - speed Internet access providers.
"We definitely are bottom feeding, no doubt about it," said Meyer, a native Seattleite. "But there are a lot of people out there who understand the value of buying distressed assets and cleaning them up."
ComVentures' managing partner Cliff Higgerson, whose Palo Alto, Calif., firm led the first round of funding in InterQuest, is one of those believers. And he said it makes a lot of sense to buy defunct companies and reinstate Internet service to apartment and condominium dwellers in major cities.
"There is a real void in the market," Higgerson said. "The demand is there, the assets are in place and the growth potential is tremendous."
Meyer, whose 34-person company works out of a 2,000-square-foot office space near Southcenter Mall, has been busy trying to fill that void lately.
At bankruptcy auctions in August and September, Meyer paid less than $2 million for some of the assets of Darwin Networks, Reflex Communications and VelocityHSI Inc. -- an amazing deal considering those companies raised more than a quarter of a billion dollars when they were in business.
Those purchases gave InterQuest high - speed networking equipment in as many as 50,000 apartments in seven states. While only 13,000 of those apartments have been activated and just under 2,000 customers have signed up for high - speed Internet access through InterQuest, Meyer said he hopes to have all 50,000 units up and running by March.
He also has his eyes on a couple of other distressed Internet service providers that may help him in his goal to build a profitable company that delivers reliable Internet service to apartments and condos.
Next week, InterQuest will "relight" half a dozen properties in the Seattle area, including Signature Point Apartments in Kent, SummerWalk in Sammamish and On The Green at Northshore in Tacoma. Meyer said there is already a waiting list at some of those properties as word has spread that the service is coming back.
Jim Miller Jr., who founded Seattle-based Reflex in 1998 and remained on the board until its Chapter 7 bankruptcy filing in March, applauds the efforts of InterQuest, even though he says it is bittersweet watching his company reborn.
"I think there is always an opportunity for competition, especially against the two large incumbents: the cable company and the phone company," Miller said.
But he also said InterQuest faces some hurdles.
One of the biggest, he said, would be renegotiating deals with apartment building owners.
"The contracts that we had with the owners of properties expired because of non-performance," said Miller, whose company attracted 10,000 customers before burning through $69 million. "So (InterQuest) would potentially have to renegotiate the access agreements with the landlords, and that is just another delay in rolling out the service."
On top of that, he said, many landlords are gun-shy about working with another start-up after the failures of Darwin, Reflex and CAIS Internet .
InterQuest also could have trouble winning back customers who have already chosen new high - speed Internet access providers.
An example is Brian Duhon, a former Reflex customer who lives in Kirkland. After the demise of Reflex, Duhon signed up for DSL service through Seattle's Speakeasy.net. Now, he said, it would be hard for him to go back.
"The only way I'd switch to (InterQuest) would be if the service was faster ... and cheaper," he said.
Will DeWitt, who lives in the Central Park East apartments in Bellevue, said he was happy with his Reflex Internet connection. But DeWitt thought it was unlikely that his landlord would switch to InterQuest given that the building last month installed high - speed Internet access from Verizon.
Meyer, a former division president at Darwin Networks, is aware of the challenges facing his company. But he says they are surmountable.
Meyer said he has had "tremendous success" renegotiating with landlords over the past two months.
"My biggest fear was that there would be a lot skepticism," he said. "But candidly, we have only had one owner, out of the entire batch of probably 50, who said, 'I don't want to do this again.'"
As far as competing against Verizon, Qwest and other high - speed Internet providers, Meyer said that because of the quality of the InterQuest service and the marketing efforts, "we will generate the lion's share of the customers in the building."
And he said his team -- 95 percent of whom worked at Darwin, Reflex or VelocityHSI -- have learned from past mistakes.
"It isn't often in business that you get a chance to do something a second time around after it failed," Meyer said. "If it doesn't work this time, the only place to look to place the blame is the guy in the mirror."

MDU Broadband Providers Seek Profitability in Wake of Failed Business Model

2001-09-07T13:09:00.000+10:00

SCOTTSDALE, Ariz., September 5, 2001 - The inability to capture a substantial subscriber base has forced in-building broadband providers to seek additional means by which to achieve profitability according to Cahners In-Stat Group (http://www.instat.com). The high-tech market research firm reports that providers, in the wake of a failed business model, are working to introduce a variety of entertainment options to their service package. While offerings like gaming will deliver some increased revenue potential, providers will bank more heavily on voice and video offerings. "The in-building broadband delivery model was created as a more cost-effective means of bringing broadband services to tenants of multi-tenant buildings. However, despite the cost savings of an on-premise Point of Presence (POP), many of the providers in this market are struggling to generate revenues necessary to make the venture profitable," says Amy Cravens, Industry Analyst with In-Stat's Multi Tenant Broadband service.
In-Stat has also found that:
• Identifying target audience trends is even more crucial in this soft economic market. When service providers are developing marketing campaigns, it is important to direct the message toward the upscale renter market.
• Asia currently represents the largest Multi-Dwelling Unit (MDU) market due to the architectural, demographic, and technology trends in that region. With a much higher percentage of the population inhabiting MDUs and the recent push for broadband, these markets are primed for in-building deployments.
• Despite the difficulties encountered in the MDU broadband market, revenue growth is strong over the forecasted 5-year period with the worldwide market for services and hardware projected to grow from $393 million in 2001 to $3 billion in 2005. The direction and nature of this growth, however, has shifted considerably between 2000 and 2001. A significant portion of the total MDU revenue in 1999 and 2000 streamed from hardware sales, whereas during later years, equipment revenues decline considerably as a portion of overall revenue.

MDU PENETRATION RATES

2001-09-04T09:16:00.000+10:00

The fundamental failing, to date, is the inability for these providers to attain the solid penetration rates that are the basis of the model. The MDU market is based on broad penetration and numerous subscribers, compared to the commercial markets where subscription fees are multifold residential rates . The low-cost/high-volume method is proving to be the best model across all residential broadband markets as higher priced models are proving unfavorable.
However, because of the low per-subscriber fee, it is critical for MDU providers to have a mass audience to generate acceptable revenue. This requires, in the in-building model, strong penetration rates within the property, which were not achieved. The MDU model requires penetration rates in large properties of at least 20 percent, yet the current average looms around five percent. Because providers have not captured the subscriber base anticipated, they are searching for additional means to bring them to profitability.

Evolution - Sydney provider to Apartment buildings that fell over in 2001

2000-10-18T02:35:00.001+11:00

Broadband bet pays off for Triguboff

Author: Tony Boyd
Date: 18 Oct 2000

Mr Harry Triguboff's bet on superfast multimedia access for residents of high-rise apartments was given a stamp of approval yesterday when New Zealand-owned telco AAPT pumped about $3 million into Evolution Technologies (Australia) Ltd.
AAPT's decision to take a 12.5 per cent stake in the broadband cabling group alongside the 10 per cent stake of Mr Triguboff's Meriton Apartments group gives Evolution added kudos in the lead up to its sharemarket float later this year.
Evolution is the first Australian company to offer an ``always on" broadband internet service and cable TV using the latest digital subscriber line technology that is sweeping the United States.
Evolution used its strategic relationship with Meriton to negotiate the installation of its cabling in apartments being built by other developers.
Evolution's managing director, Mr Hart Mailandt, said his company was cabling about 20 Meriton sites and several other buildings including the Renzo Piano residential tower in Macquarie Street Sydney.
``We are doing a couple of Mirvac buildings, some properties being developed by Devine on the Gold Coast and we are talking to Grocon," Mr Mailandt said.
The most high profile and complete installation had been at 311 Castlereagh Street in Sydney where Meriton had built 1,200 units.
Mr Mailandt said that residents of buildings with the Evolution service would benefit from the installation of digital subscriber line multiplexer switches in the basement of their buildings.
He said this avoided the normal problems associated with ADSL installations at local telephone exchanges such as loss of quality of signal.
AAPT's investment in Evolution means that within the next 12 to 18 months residents will be able to get access to telephony and video on demand from the same cable delivery internet and pay-TV.

It's a green light for Evolution float, an orange for B Digital
By JANE SCHULZE in Melbourne
While confusion continued to surround the listing of the Seven Network's mobile telephony business B Digital yesterday, another company in which it has a 12.5 per cent stake is expected to meet its listing timetable despite the sharemarket's recent volatility.
The company, Evolution Technologies, which is laying broadband cable through high-rise apartment buildings, is expected to soon confirm Mr Harry Triguboff's Meriton Apartments as a key shareholder.
Meanwhile, a Seven spokesman said the B Digital float had not been postponed indefinitely and that the matter remained in discussion with its advisers, Warburg Dillon Read and Grant Samuel & Associates.
Despite earlier confusion, the company denied that an underwriting agreement had been signed.
Sources dismissed suggestions the Evolution listing was under review due to the market gyrations, and said that the board and prospectus documentation was being finalised.
The prospectus is expected to be lodged in the next two weeks. The plan is to raise $35 million from the issue of 70 million shares at 50c each.
The public offer will represent approximately 45 per cent of the company, which will be fully capitalised at almost $80 million.
While Seven's online business i7 (which has also signed content agreements with Evolution) will have 12.5 per cent of the business, Evolution's equipment supplier, Lucent Technologies, will also be issued options. If exercised, these would give Lucent about 5 per cent of Evolution.
Evolution has also signed a content agreement with Beyond International and is expected to start offering its first broadband Internet connection this month.
And while Internet gaming company Lasseters Holdings said it planned to postpone its sharemarket debut, sources said the listing of interactive gaming group gocorp.com was on track, with the issue opening today. That company is raising $20 million from the public

AAPT Takes Stake in Evolution
Tuesday 17th October 2000

AAPT, Australia’s third largest telecommunications carrier, today announced that it will take a 12.5% equity stake in leading convergent information provider, Evolution Technologies (Australia) Limited (Evolution), joining Meriton Apartments and Seven Network Limited’s Pay TV subsidiary C7 (C7), who are also shareholders.

Evolution, which is set to make its stock market debut later this year, is a convergent information supplier concentrating on delivering telecommunications solutions to consumers in multi storey residential buildings and cluster housing, via its Local Area Network.

The Company’s current consumer product and service offering include an "always on" broadband internet service and cable TV, with telephony and video on demand services expected to be available in 6-12 months time.

Evolution, through its strategic relationship with Meriton Apartments, which has a 10% stake in the company, is already delivering its "always on" broadband internet service to two major residential buildings in Sydney with several more cabled and awaiting occupation. To deliver these services Evolution is currently cabling in excess of 20 Meriton sites and several other buildings including the Renzo Piano residential tower in Macquarie Street, Sydney. The Company is also retro fitting existing buildings with ADSL switches in order to implement its service.

Content for these services are being provided by the C7 and Beyond International (Beyond).

As a shareholder and a strategic partner, AAPT will provide Evolution with backbone network carriage needed to deliver these services and over the longer term will deliver telephony services to residents in buildings connected by Evolution.

AAPT’s acting Chief Executive Officer, Mr. Ron Nissen said residential consumers are today seeking a much broader portfolio of products and services than in the past, including telephony, high speed Internet, pay TV and video on demand services.

"This relationship with Evolution will allow AAPT to leverage its expertise in the provision of high speed access, and telephony and Internet services to this market place," said Mr. Nissen.

Mr. Hart Mailandt, Managing Director of Evolution said "We are delighted to have secured this strategic alliance with Australia’s third largest telecommunications carrier which will provide users of our high speed network access to AAPT’s telephony services. We also see tremendous opportunity in marketing our services directly to AAPT’s significant customer base and entering co-marketing arrangements with AAPT.

"The alliance with AAPT demonstrates our ability to forge alliances with leading participants including Seven Network Limited’s Pay TV subsidiary C7 and Beyond International Limited. Evolution’s intelligent network is capable of accessing the best services currently available with the capacity to receive the services of the future which will include video on demand, IP telephony and the virtual office", Mr. Mailandt said.

Evolution has appointed Ron Nissen, acting Chief Executive Officer of AAPT as a director of the Company.