TeraGo eyeing arrival of WiMAX equipment to expand addressable market

TeraGo Networks Inc.’s chief executive says the company will be able to compete more effectively in the business Internet and data communications markets against incumbent telcos and resellers when it begins to deploy WiMAX-certified equipment across its network. Bryan Boyd says that WiMAX not only levels the competitive playing field, but it will allow TeraGo to steal greater market share away from competitors offering services over hard-wired networks. "(WiMAX) is going to help us, without a doubt. It’s a better tool for us to give our customers a better product. As you know, in a competitive environment the better your offering the more likely you are going to take market share. Eight-five percent of our customers convert from Bell, TELUS, MCI, Sprint, Allstream, so we’re competing effectively today, but with better equipment we’ll compete that much better," Boyd tells Report on Wireless. Equipment with WiMAX chips will accomplish two things, he says. Adding the gear promises to deliver better performance with higher throughput levels or less expensive radios, or both compared to current wireless broadband equipment. The result, says Boyd, is that TeraGo can broaden its addressable market, Boyd says. "Right now it costs about the same amount of money to install a radio as it does to buy it. With WiMAX - because you’ve got a more tolerant radio - we’ll be able to bring that installation cost down. But also, the radio itself should be less expensive because of standardization in the chips…If it costs us less to install it and it costs us less to buy it, then we can serve a smaller customer where the monthly recurring revenue is lower," he says. "Net, what that means to TeraGo is that if radios can achieve greater levels of performance and/or become less expensive, then we can reach out and serve new types of customers that today are either uneconomical for us or beyond our logistical constraints - too far away or the like…As operators like TeraGo can purchase radios with WiMAX in them we’ll be able to either deliver more performance, greater reliability or in fact serve (markets) where today that may not be justifiable," Boyd explains. While WiMAX holds significant promise in the future for operators, the current generation of equipment and services isn’t slowing TeraGo down from expanding. The company recently announced that it was rolling out services in Edmonton, and Boyd tells RoW that the operator will launch services early next year in Montreal and Vancouver. "With that rollout, we’ll be in all of the major markets in Canada by the middle of next year," he says. TeraGo is growing at a 70% clip both in terms of subscriber additions and revenue, says Boyd. The majority of customers come to the company because of two factors. "Clearly the purchase criteria for the customer is performance, reliability and then value or price. And what we find is that there is more or less an even split between (the two)," he says. Reiterating the performance aspect of TeraGo’s network, Boyd continues: "Customers are coming to us because they need more capacity, their current connection is bogging down, or they’ve had some sort of service problem and they are looking to evaluate what their alternatives are."

TeraGo eyeing arrival of WiMAX equipment to expand addressable market

News | October 21, 2004

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