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Broadband wireless spending expected to boom

Equipment sales could reach $1.5 billion by 2008 as new industry standards kick in, according to a report released by market research firm ABI.

Broadband wireless access equipment sales are expected to reach $1.5 billion by 2008 as new industry standards kick in, according to a report released Thursday by market research firm ABI.

Approval of the WiMax, or 802.16, broadband wireless standard is one driving force for the anticipated revenue growth. And 802.20 technology, once a standard is set, will serve as the other industry boost, said Edward Rerisi, ABI's research director. WiMax is a fixed wireless standard while 802.20 is a mobile wireless standard.

The standards promise to improve Internet connections by reducing transmission interference. In the past, wireless broadband signals could be blocked by anything from a bush to a bridge.

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"Growth in equipment spending will be very strong, though much smaller in absolute terms compared to that of cellular networks," Rerisi said.

Most of the growth is expected to come from WiMax equipment spending. That's because 802.20-compliant equipment will not be ready until 2006, he said.

WiMax infrastructure equipment, such as base stations, began shipping this year. These items cost an average of $30,000 each and have a range of 30 miles in radius. Customer modems are expected to ship later this year or early next year and cost $400 to $500 each. A single base station can serve hundreds of these modems, Rerisi said.

As the broadband wireless equipment industry grows to $1.5 billion over the next five years, the Asia-Pacific region is expected to account for roughly half of all equipment sales. North America will represent about 14 percent, and Latin America an even smaller slice, Rerisi said. Broadband wireless equipment spending was "negligible" last year because 802.16 had just gotten approval, he added.

Residential customers along with small and medium-size businesses will represent the bulk of equipment buyers in North America and the Asia-Pacific region, he said. But in Latin America, most sales will be to individuals.

And while these customers largely reside in areas where DSL or high-speed cable Internet access is not available, there will be other customers, such as large corporations, which have a T1 line and are looking to use broadband wireless access as a backup system, Rerisi said.