If you live out in the country, chances are you have limited choices for high-speed Internet. The big cable and telco carriers don’t provide service to these areas as lower customer density makes it too expensive to roll out their networks. Satellite internet providers such as HughesNet and Viasat provide service almost anywhere but are typically considered a “last resort” due to limited data caps and high latency and end up serving the most inaccessible subscribers. In these areas, an entire industry of Wireless Internet Service Providers (WISPs) has sprung up. In the US, over 3,000 WISPs serve more than 3 million end users who would otherwise be stuck with satellite or slow DSL.
Most of these WISPs are small businesses with a few hundred to a few thousand subscribers. Because of this, they have unique challenges and benefits from traditional carriers:
- WISPs are often closely involved with their communities and can offer personalized service making it very attractive for their customers.
- Because of their smaller size they don’t have the resources to deal with high regulatory overhead.
- Due to rapidly evolving bandwidth requirements and technology, WISPs often find themselves overhauling their network every 3 – 5 years to keep up. Fiber in comparison is more expensive to deploy but can last decades. Some WISPs are now rolling out a combination of fiber and wireless networks.
In addition to this, most WISPs are for-profit businesses (vs local coops) that need to deal with marketing, maintaining their networks, customer satisfaction and ARPU with small and versatile teams, all while keeping up with technology, watching regulatory changes and the bottom line. For 2017, here are some of the key trends to watch in this industry:
The FCC imposes a number of regulations on the entire industry such as the 2015 Open Internet Order which introduced heightened transparency requirements for all broadband internet access service providers and served as the basis for net neutrality regulation.
On January 23rd, Ajit Pai was appointed to become the chairman of the FCC. Pai has been an advocate for less regulation during his tenure in the FCC and this will have an impact on the direction of the FCC. A month later, the FCC voted to extend an exemption to enhanced transparency requirements to providers with less than 250,000 connections. This includes making available data about bandwidth, packet loss and latency.
The concept behind these regulations is excellent but can be particularly burdensome for WISPs. Therefore relaxing some of these requirements for smaller providers will have a positive effect on the WISP industry.
“WISPs are providing a critical service to millions of households in the US that wouldn’t have access to affordable high speed internet otherwise. Due to their typically smaller sizes and unique technologies they have unique challenges and benefits compared to traditional carriers.”
According to Sandvine, Real time entertainment (streaming video and audio) continues to drive the bandwidth growth of fixed networks with 71% of total traffic. In North America, market leader Netflix continues to dominate with 35.2% of downstream traffic during peak hours. Youtube takes the second spot with 17.5% and Amazon video has established itself as the leading paid OTT alternative with 4.3%.
Although streaming video can put a huge strain on networks, it can also provide a great motivation for subscribers to increase their data plans and thereby increase ARPU. Although streaming in High Def or even 4K provides a great experience, even more important is that the experience is consistent and without buffering. The key is to manage traffic to avoid buffering and provide a high quality picture but also ensure that other users in the household are able to enjoy other activities such as web browsing simultaneously.
This is especially challenging during peak hours and requires a more advanced tool set than putting in place basic traffic shapers including detailed Quality of Experience statistics.
The main competition for WISPs are other WISPs, DSL and satellite internet. 2017 will see changes in satellite internet offerings as both HughesNet and Viasat are launching new satellites promising greater speeds and data caps.
HughesNet launched Echostar XIX on December 16th and is currently in the testing phase with service beginning on March 16th. Gen 5 Plans have not been officially released, but speeds will likely be around 25Mbps with data caps up to 50GB daytime and 50GB bonus bytes. It will also be available in all regions of the continental US.
Viasat-2 is scheduled for launch in the next few months and to be operational for consumers in Q4 2017. Speeds will likely be higher than 25Mbps.
As existing satellites for both HughesNet and Viasat have become quite congested in certain regions, these will both result in major improvements. The higher speeds will be attractive to consumers, but the data caps will continue to make applications such as streaming video difficult.
For WISPs it will be important to differentiate on more than just bandwidth. The lower latency compared to satellite internet will help but providing a great quality of experience will be key.
In Summary, WISPs are providing a critical service to millions of households in the US that wouldn’t have access to affordable high speed internet otherwise. Due to their typically smaller sizes and unique technologies they have unique challenges and benefits compared to traditional carriers.
The 3 key trends for WISPs in 2017 are:
- A changing regulatory landscape due to FCC changes
- Continued bandwidth growth due to high demand for real time entertainment
- Increased competition due to new satellite launched from Hughesnet and Viasat.
With less regulatory overhead, opportunities for increased ARPU due to demand for streaming video and the ability to deliver more data with less latency than satellite should make 2017 a great year for WISPs.
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