Covad Wireless Business Internet Service - Industry Background

The Fixed-Wireless Market

While much has changed recently in the telecom market, Covad Wireless is participating in a segment ( the Wireless Internet Service Provider (WISP) segment) that is attractive and will rapidly grow
over the long term. Leading research firm Parks & Associates forecast dramatic overall growth in the WISP market over the next few years, estimating
that total US WISP revenues will reach nearly $2 billion by the year 2008. And other leading telecom research firms agree that Covad Wireless is focused on a market segment poised for rapid growth:

“The Yankee Group has been following this market for quite some time, and we believe that consolidating the WISP market is a great step for the industry,” said Lindsay Schroth, Analyst, Broadband Access Technologies, The Yankee Group. “The focus on offering a flexible, lower-cost solution to business customers is a great strategy, and this merger should be closely watched by other WISPs. By creating a scaleable company with brand recognition and greater buying power, we believe that Covad Wireless is poised for success in the market.”

Wireless is recognized as one of the lowest cost access solutions as compared with T1 and T3 (DataComm Research Company), and leading industry experts agree that broadband wireless is a tremendous growth industry. Broadband applications (including Internet access, Virtual Private Networking (VPN), Voice/video-over-IP, CAD sharing, medical imaging, multimedia streaming, CD burning, thick client applications, data warehousing, etc.) demand increased bandwidth.

The exploding demand for broadband Internet access remains under-served: recent reports by leading market research firms indicate that broadband fixed wireless will capture a significant share of this market for “first mile” access services. The following snapshots build a compelling panorama of this exciting future.

DataComm Research Company

“Demand far exceeds supply for next 10 years.”

“Wireless is recognized as lowest cost to deploy.”

The Strategis Group

“Broadband wireless access systems are expected to generate service revenues worldwide of nearly $10B in five years and $28B in 10 years.”

“$80 billion global market by the end of the next decade (end of 2010).”
While each market research firm differs on the actual market size, they all agree that wireless broadband is a very high growth industry.

California and Western States Market

Covad Wireless’s focus on California and the Western States is a distinct advantage. California is the 6th largest economy in the world and the ideal market to dominate while preparing and positioning the company for a national rollout. California has many positive characteristics, including significant adoption of Internet access by California businesses. It is widely known that as much as 40% of the world Internet traffic originates or terminates in California.

 

Covad Wireless also offers service in the suburban Chicago area of Illinois, another lucrative market for broadband services.