March/April, 2004

WisperTel - On the Front Range of Broadband

Colorado’s wisperTel Looks to the Hills, Targeting Residential and Commercial Subscribers in Upscale Bedroom Communities Outside Denver


By Timothy M. Downs.

The mountains and foothills west of Denver, at the Front Range of the Rocky Mountains, are populated with thousands of homes. And it is here, on terrain that is anything but flat, with a climate that is often not mild, that Barry Pier decided to test his broadband wireless startup operation.

Pier formed wisper Telecommunications (wisperTel) and serves as CEO. The wireless Internet service provider (WISP) is his third venture in telecommunications — one of many WISPs emerging in North America. WisperTel positions itself as a carrier-class alternative to incumbent broadband operators Qwest and Comcast in the region.

“We haven’t lost a customer yet in one-and-a-half years,” Pier said in response to a question about competing against the entrenched carriers. “In fact, we have seen instances in which homes in these communities have been bought and sold contingent upon wisperTel service.”

Currently, wisperTel has over 1,000 subscribers to its broadband wireless service.

Roadmap to Broadband

Pier’s experience in telecommunications spans more than 20 years. It reads like a roadmap from the halcyon days of wireless.

Pier had an early stint as a director of mobile wireless with the mega-engineering firm Fluor Daniel. He was part of the business development team at Denver-based US West, which launched the first PCS networks in London and the European continent. Many US West executives went on to found Callahan and Associates, which licensed and deployed PCS and cellular networks from London to Moscow. Pier next worked with Western Wireless, assisting with its mostly rural cellular network buildout in Washington state. Western Wireless is still one of the nation’s leading rural wireless carriers.

In 2001, following a short career with the now-defunct Advanced Radio Telecom (ART), Pier launched wisperTel.

Network Evolution

WisperTel deployed a trial network in February of 2002. That network used Nokia’s RoofTop radios in a mesh network architecture. Backhaul was accomplished via Solectek’s point-to-multipoint unlicensed radios.

WisperTel’s network faced a dilemma in late 2002 when Nokia stopped making its RoofTop gear. There were other problems associated with RoofTop as well.

“Nokia’s firmware didn’t work. They distributed a product, but they had distributors that didn’t provide technical support,” said Michael Brinks, wisperTel’s director of business development/sales and a founder of the company. “The second hop didn’t work as well as represented — nor did the third,” Brinks added, referring to RoofTop’s mesh technology.

Brinks said that 30 days after Nokia ended its RoofTop line, wisperTel selected equipment from Trango Broadband Wireless, after testing two other vendors’ gear.

“We went in with the big name and we tried other vendors’ equipment, and we were most satisfied with the Trango products. Their gear actually exceeded our expectations in terms of range,” he said.

WisperTel often faces rugged terrain in deploying its radios in the area, with mountains ranging between 6,000 and 10,000 feet above sea level. Brinks said that there are still some valleys where wisperTel hasn’t established coverage.

He added that the climate of the area adds additional variables for radio transmission. Some customers at the tops of peaks have lightning rods located in every corner in order to receive wisperTel service. Additionally, the area sometimes receives up to nine feet of snow, turning trees into impassable obstacles. There were also problems with placing antennas on roofs in a region with such heavy snowfall

“We no longer install on the roof,” Brinks said. “You can’t transmit through nine feet of snow on the roof. The snow will actually move the antenna [by its weight]. When we mount Trango’s antenna under the eaves, it resolves 100 percent of the issues.”

WisperTel’s network backbone consists of towers on three mountains (Lookout, Squaw and Mount Morrison). On those towers, Solectec radios link to the ISP network operating center in Wheat Ridge, Colo. and to the public network. The company has had no problems securing roof rights for its network, with many homes serving as network gateways, according to Brinks.

The company deployed commercial service in May of 2002, following a difficult funding campaign — happening, as it did, at the bottom of the telecom capital collapse. WisperTel’s funding continues to be a mix of non-venture capital private equity and debt.

Grassroots Approach

WisperTel’s business stems from its wireless expertise, plus a grassroots approach to finding customers in its mountainous niche market.

WisperTel focuses on wealthy bedroom communities, such as Evergreen, Genesee, and Conifer, Colo., which are residential areas for many who work in the greater Denver metropolitan area. “We focused on doing the residential market first,” Brinks said.

“We looked out and saw a million-and-a-half-dollar homes with dialup. For us, we saw that market, and began working with home owner associations, chambers of commerce and other organizations.”

WisperTel has refined its business model over the course of nearly two year’s experience operating in the field. The company markets to potential customers prior to network deployment. The decision to deploy is based on a sales uptake of four to six homes. With that market established, wisperTel may elect to deploy a wireless gateway hub to serve homes in the remainder of the community. The goal is to have cash flow and network deployment occur nearly simultaneously.

“We have found a new generation of business model, similar to a CLEC/WISP juncture, that has worked for us,” Pier said. “It is the inverse of the ‘Field of Dreams’ strategy” (i.e., build a network and the subscribers will come).

“We’ve taken our wireless expertise and built the infrastructure and network facilities only where the demand exists,” Brinks added.

For residential customers, the wisperTel T-1 product, starting at $59.95, delivers a guaranteed throughput of 256 kbps, burstable to 768 kbps. The company’s commercial T-1 product begins at $299 — a rate that is nearly half of the standard pricing offered by Qwest.

Brinks said that the Trango gear enables wisperTel to offer up to 8 Mbps service to customers. Additionally, the fixed wireless equipment enables wisperTel to offer symmetrical service and service level agreements at the two nines’ degree of assurance.

Today, wisperTel focuses on two core areas of growth: residential wireless connectivity and partnerships with other ISPs to expand the wisperTel footprint (see “Franchising Broadband”). Currently, wisperTel’s footprint covers 340,000 homes and 31,000 businesses over 1,000 square miles west of Denver.

Nearly the entire base of wisperTel’s network uses Trango Broadband’s fixed wireless equipment (the 5850 access point and FOX customer premises equipment [CPE]) utilizing the unlicensed 5 GHz frequency band. Solectek’s and Redline Communications’ gear are utilized as well. Redline’s fixed wireless systems are used for both network redundancy and backhaul.

“We deploy a community gateway in areas dominated by singlefamily homes. Every hub has a stand-by generator, and we don’t deploy CPE on rooftops. Under the eaves [is the place] we have found to be the best location, especially in winter,” Pier said.

In 2004, the company’s plans are to expand contiguously up and down the Front Range of Colorado’s Rocky Mountains in a regional footprint. The next step is to expand nationally using the wisperTel network and business model as a template with which to partner with other WISPs, dial-up ISPs and entrepreneurs.

WisperTel has also begun beta testing Trango’s new 900 MHz fixed wireless gear as a way to deal with tree obstacles in its service area, Brinks said.

FRANCHISING BROADBAND

WisperTel, a successful carrier-class wireless broadband service provider, is one of a handful of organizations with a standardized business plan, system and network deployment scheme that can be duplicated by partners, franchisees and others. Broadband Wireless Business asked wisperTel’s CEO Barry S. Pier specific questions about the company’s franchise expectations.

BWB: What do you look for in a franchisee?

Pier: First, we look for a management team with experience. It doesn’t have to be wireless experience, but they must understand that they’re in the customer service industry. We target dial-up ISPs or WISPs that are not in a condition here they can scale the business alone.

BWB: What is the franchisor offering?

Pier: Basically, we offer a buyer’s cooperative where all the wisperTel network stakeholders can gain from a greater economy of scale in equipment purchasing. We also offer what we call a complete playbook, which includes the business plan, outline of processes, expertise to configure equipment, identify markets and coverage areas. They identify the target markets they want to serve; wisperTel works with them on how to serve these markets. BWB: Are franchisees part of a wisperTel brand? Pier: Yes. We provide for territory exclusivity, and allow for the use of the wisperTel brand in collateral materials and sales materials.

BWB: What is the cost of starting and maintaining the business (including all fees)?

Pier: The franchise fee is based on the service area, and varies by territory. We don’t charge a lot up front, but we do try to cover our service costs. The franchisee can choose which services they will provide. WisperTel does have a rigorous qualification process, which can take anywhere from 90 to 120 days, with a detailed technical and market analysis. Once we complete a market discovery analysis, we layout the network specifically, along with the financials to support deployment.

About the Author • Tim Downs is president of Shorecliff Communications and editor of Broadband Wireless Business magazine.

Inquiries for franchising wisperTel should be directed to Dave Johnson via email at djohnson@wispertel.com.

To comment on this article, please send e-mail to info@shorecliffcommunications.com.

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