australia goes unwired with $a37m from intel

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Australia goes Unwired with $A37m from Intel

Australia is about to become the world's hottest testbed for the commercial wireless revolution, let by a feisty provider -- Unwired -- and $A37 million from chip maker Intel's investment arm, Intel Capital.

The investment will go toward rolling out a special form of very high speed wireless broadband seen by many in the industry as the next great step forward for communities that are underserved by copper wire networks -- something Telstra can take squarely on the chin.

The development comes as Intel is spreading a new kind of 'chip gospel' at its Intel Developer Forum in San Francisco.

Intel is keen to put aside the constant push for greater processor speed for chips that are capable of doing more with less power -- a paradigm critically important to the advancement of computing platforms at the heart of entertainment applications and wireless technology.

It has made a number of product and strategy announcements at the Forum but few will have as much significance to its outside, non-tech audience as the decision to sink so much money into a single wireless provider in one of the world's most complex delivery areas.

Ears in the wireless vendor community will be perking up because Intel Capital is a big, strategic spender with a very strong record of success.

It gets a lot of delivery out of its investment dollar -- and the bigger the investment, the more confidence it will have in the outcomes.

That's not to say it is particularly parsimonious, but while it has invested more than $US4 billion in approximately 1,000 companies in more than 30 countries since 1991, most of its investments are smallish and closer to home. Last year, for example, the $US130 million it invested was spread over about 110 deals -- of which, approximately 60 per cent were in the US.

How well do Intel Capital companies do? Intel points out that more than 160 portfolio companies have been acquired by other companies and another 150 have gone public on various exchanges around the world since the programme began.

Sinking $A37 million into one project so far from home is a sign of real commitment to the technology involved -- WiMax (Worldwide Interoperability for Microwave Access) -- and an enormous show of confidence in Unwired.

So who is Unwired?

Unwired is a relative newcomer, but has been blazing a hot growth track over the last year in Sydney, where it is based.

Set up in 2000, the company spent considerable time buying licences, raising capital and working through infrastructure issues. It went through several structural incarnation and emerged at the very end of 2003 as the company it is today -- one with spectrum licences covering approximately 95 per cent of the Australian population and ambitions to become the second local loop telecommunications service provider in Australia, delivering services to a geographical area covering at least 70 per cent of Australia's households and 75 per cent of businesses.

Most of that is on the drawing board -- blue sky.

But it established itself as a very aggressive market player this year through a series of radical broadband offers. At the end of June 2005, it had more then 28,000 customers in Sydney alone, just 10 months after it launched its commercial service on 19 August 2004.

To counter a major new wireless offer from Telstra's BigPond, the company has also just introduced subscriber plans with higher data caps and lower prices than BigPond's offer -- effectively cutting the ground out from under BigPond in the Sydney area.

Unwired has been on the one thread of the WiMax track -- using 'portable modems' similar in look to those on offer here from struggling wireless provider Woosh -- with technology from Navini Networks, an American private company based in Texas.

But the company has announced it would transition to Intel's version of WiMax and would start bringing in dual-mode modems and base stations to enable that transition with minimal existing customer disruption.

What's WiMax and why is Intel interested?

In making the announcement, Arvind Sodhani, Intel Capital president, said: "Continued investment in WiMAX technology is strategically important for the industry. It will enable the provisioning of fast, full-fledged broadband internet access to a vast proportion of the population in an accelerated time frame."

"Twelve months ago wireless broadband was on the horizon, but today it’s an accepted and trusted option for thousands of customers as evidenced by the rapid growth of customers for our Sydney business," said Unwired CEO David Spence. "Intel Capital’s investment will enable us to make wireless broadband available to a greater number of Australians and to quickly move to WiMAX in other cities as equipment becomes available."

Ok, but what is it, really?


It does not require line of sight, which makes it urban and hilly/forested geography compatible.

A base station has a theoretical reach of up to 50km (in some terrain that's down to 15km).

Shared speeds of up to 70Mbit/sec are possible (that's MEGA, not KILO).

It's a 'last mile' solution that can deliver directly to users or to wireless gateways -- but from such distances, in some cases, that the 'middle mile' all but vanishes.

"The upcoming WiMax network Unwired plans to deploy will demonstrate how a service provider can deploy this standards-based technology across multiple metropolitan areas potentially covering thousands of square kilometres and serving millions of people," said Varun Kapur, co-director of Intel Capital, Asia-Pacific Region. "It’s a model that other leading service providers around the world could and should replicate."

Broadband user group Whirlpool notes that a recently announced deal with Austar will enable Unwired to deploy its wireless service across much of Australia, including Melbourne, Brisbane, Geelong, Newcastle and other major centres.

Hear that rumbling in the backgound?

It's Telstra -- and probably Telecom NZ -- coping with indigestion.
25-Aug-2005