Towerstream Expands To DFW, Winding Down ITB
Towerstream announced their 9th US market today - Dallas / Fort Worth Texas. What's unremarkable is that it's more of the same that we've come to expect from Towerstream - they're offering Broadband Internet Access at highly-competitive prices, service levels, and performance, and they happen to use wireless, rather than wireline, as a competitive advantage.
At the same time... doing so is remarkable. Towerstream really does have the formula down to keep doing this, market after market, extending their core strengths of their call-center sales model, outsourced, low-overhead installation, use of Broadband Wireless Internet Access technology, very solid, reliable backbone / backhaul, and above all, low-overhead and highly cost-effective. When it comes time to compete on price in an inevitable head-to-head competition in coming years, Towerstream will be positioned very well.
On a personal note...
As I explained in 73, and Thanks For All The Fish, I will no longer be writing very much about BWIA, including here on Independent Towerstream Blog. There's ample "content" and "expertise" about Towerstream available for readers that want to follow developments.
But I did want to take a moment and express my deep admiration for what Philip Urso and Jeff Thompson, and the organization they've put together, have accomplished. When I began writing about BWIA in 1996, I predicted, somewhat quietly, that Broadband Wireless Internet Access, using license-exempt spectrum, was a viable business model even in urban areas. Someone would eventually understand that the "interference" in license-exempt spectrum wasn't intractable, but rather was an engineering issue that could be dealt with effectively by choice of good technology and proper network design.
Among analysts and writers, I was entirely alone in this belief at the time. When Towerstream began, it wasn't technology that drove their choice to use license-exempt spectrum - it was the simple economics that (paying for) licensed spectrum was incompatible with Towerstream's business model. Towerstream shopped around for technology that would make it possible for them to offer Broadband Internet Access sufficiently reliable for them to be able to offer a Service Level Agreement, which they had to have to be minimially competitive to wireline services such as T-1's. Such systems were expensive at first, and that first vendor whose product worked eventually had production (and other corporate) issues so severe that Towerstream went with other vendors, but by then they had proven the business model (and incidentally) the technology that entabled it, and in doing so, motivated other vendors to "step up" their own technology to meet Towerstream's needs.
But Towerstream really understood what business they were in, and in that, they are almost totally alone in vendors of Broadband Internet Access. In my conversations with Urso and Thompson, they truly get that they're in the "Internet Bitpipe" business. They haven't been tempted to get into "high margin" lines of business like telephony services, hosting, applications, or anything other than providing best-bang-for-the-buck Broadband Internet Access to businesses.
But Towerstream, for all its strengths, isn't omnipotent, or invulnerable.
One major weakness of Towerstream's strategy is that they choose to operate only within major urban cores, and ignore "secondary" cities such as providing service in San Francisco, but not San Jose, and providing service in Seattle, but not Redmond. Those secondary cities is where the most aggressive growth is happening and often where competitive Broadband Internet Access is needed the most. But, there's something to be said for Towerstream's stated strategy that they're not competing with anyone but the incumbent telco in those urban markets, and Towerstream is doing all the business it can scale into by simply poaching customers of those incumbent telcos who are fed up with monopoly pricing, service attitudes, and increasingly unreliable services as telcos try to wrest more and more revenue from their wireline infastructure without actually investing in additional physical capacity or reliability.
And that's the ironic... but highly lucrative... situation that Towerstream has found itself in. By staying focused on using wireless technology to deliver Broadband Internet Access, by staying focused on Internet services, by eschewing "high margin services" and staying lean and highly cost-effective... the services that Towerstream is now delivering to its customers are more reliable, higher capacity, and far more cost-effective than the equivalent wireline services.
Kudos, Towerstream!
By Steve Stroh
This article is Copyright © 2008 by Steve Stroh except for specifically-marked excerpts. Excerpts and links are expressly permitted (and encouraged).
This article was written and posted via Broadband Wireless Internet Access (BWIA); T-Mobile Wi-Fi HotSpot at Starbucks - sometimes ya just got have some social interaction and really strong coffee.
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