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A second operator using Wimax wireless technology to bypass Telecom's copper line network has set its sights on the broadband market.
Wellington-based NZWireless is offering a high-speed internet service based on Wimax after testing the technology for six months.
It follows internet provider and toll-call operator CallPlus into the Wimax market. Callplus is running a $3 million trial network in Whangarei.
NZWireless will target small and medium-sized businesses in Wellington but is considering using unlicensed frequencies to offer services in Auckland.
It secured frequencies in the 3.5GHz band through radio spectrum auctions to cover all of Wellington.
Subscribers will pay $250 for the Wimax equipment when signing a year-long contact and prices start at $90 a month for a 2Mbps (megabit per second) connection. That's expensive compared with similar fixed-line broadband deals, but unlike its rivals NZWireless offers full-speed uploads, which will appeal to companies sending large files.
Residential Wimax services are on the cards for when the price of equipment drops, said NZWireless chief executive Chris Aspros.
"The prices will come down. I certainly see it as a viable option," he said.
But Sydney-based telecoms analyst Paul Budde said competition from low-priced fixed-line internet services meant Wimax would never serve the mass market.
"The majority of businesses are already reached by fixed-line services. It's very difficult to compete with $30 broadband products in the residential market," he said.
Aspros said NZWireless would not go head to head with the likes of Telecom and TelstraClear in city centres, but would target customers who wanted good upload speeds or to join outlying offices in a network.
"Fibre is fibre, we're not trying to compete with it," he said. "We're looking at businesses with five to 10 people, a number of phones - real estate offices, design companies, those types of businesses."
NZWireless shareholders had invested more money in the company to fund the new network. "It's not a cheap process, we have to add more base stations, but it's not a big deal as we have existing sites."
Budde said Wimax had arrived too late to achieve traction as a viable "last mile" replacement for wired services, but the technology did have a future.
"In a couple of years, Wimax will merge into [fourth generation] mobile services and the mobile network will become a wireless broadband network," he said.
Budde said Australian operator Unwired, with 60,000, was one of the biggest Wimax operators in the world.
"If they had 500,000 customers by now, I'd say it might work."
What is Wimax?
* Wireless network technology that offers better speeds, reliability and range than existing "wi-fi" networks.
* Operates in the 3.5GHz frequency band in which several operators, including Telecom, CallPlus and NZWireless, have licences to operate.
* Wimax services operate independent of fixed-line internet and phone services.
