Viability of Wireless Internet Service Provider Business Model is Threatened

Report From Red Herring Research Probes Viability Of

Some Wireless Internet Service Providers



Apr 23, 2001, 01:00 ET from Red Herring Communications, Inc.

    SAN FRANCISCO, April 23 /PRNewswire Interactive News Release/ -- The
 Wireless Internet Service Provider (WISP) business model is being threatened
 by multiple challenges that face the industry, according to a report issued by
 Red Herring Research (RHR).  The account, "Their Palms are Red," from the
 newly launched research unit of Red Herring Communications, states that
 resellers of wireless data services face a long path to profitability,
 exacerbated by their low control over costs and mounting brand-development
 expenses.  WISPs-like GoAmerica, OmniSky, Palm, Handango, Snapscape.com and
 YadaYada-will also face growing competition both within their reseller group
 and from network operators, like AT&T, Sprint, and Verizon, as the category
 matures.
     Using various operational data from OmniSky as a proxy, the report
 examines the cost structures between resellers and network operators and
 reviews the key drivers of success going forward.
     Major points learned through the research include:
 
      -- WISPs currently maintain a very small subscriber base -- GoAmerica,
         OmniSky and Palm together had just 271,000 subscribers at the end of
         2000.
 
      -- The greatest nearer-term challenge facing wireless data resellers is
         the development of a subscriber base broad enough to minimize airtime
         costs paid to network operators.
 
      -- Future challenges to WISPs include the reduction of subscriber
         acquisition costs; the negotiation of lower-cost airtime agreements
         with network operators; management of the unpredictability of
         subscriber usage habits; and preparation for support of and
         competition with network operators and newer, faster data-oriented
         networks.
 
     "Their Palms are Red," prepared by Red Herring Research Analyst Mark A.
 Mowrey can be purchased for $395 at http://www.redherring.com/research.
     Red Herring Research (RHR) reports are designed to help business leaders
 and industry thinkers gain reliable business intelligence with a balanced
 blend of insightful discussion and pertinent infographics.  RHR analysis
 addresses the information needs of senior-level managers, executives,
 consultants, academics, and students and is priced within a range from $95 to
 $750.
 
     About Red Herring Communications, Inc.
     Red Herring Communications, Inc. is an integrated network of media
 properties connecting the people, companies and industries whose ideas and
 technological innovations are inspiring and reshaping the world of business.
 Founded in 1993, Red Herring magazine, the company's flagship platform,
 provides in-depth analysis and reporting on the business of technology,
 innovation and entrepreneurialism.  RedHerring.com, Red Herring Research and
 Red Herring Events offer a unique blend of news, commentary, financial
 analysis, investor tools and access to leaders of emerging technologies and
 markets.  A privately held company, Red Herring Communications, Inc., is
 headquartered in San Francisco and has offices in New York, Los Angeles,
 Boston and London.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X72351358
 
 

SOURCE Red Herring Communications, Inc.
    SAN FRANCISCO, April 23 /PRNewswire Interactive News Release/ -- The
 Wireless Internet Service Provider (WISP) business model is being threatened
 by multiple challenges that face the industry, according to a report issued by
 Red Herring Research (RHR).  The account, "Their Palms are Red," from the
 newly launched research unit of Red Herring Communications, states that
 resellers of wireless data services face a long path to profitability,
 exacerbated by their low control over costs and mounting brand-development
 expenses.  WISPs-like GoAmerica, OmniSky, Palm, Handango, Snapscape.com and
 YadaYada-will also face growing competition both within their reseller group
 and from network operators, like AT&T, Sprint, and Verizon, as the category
 matures.
     Using various operational data from OmniSky as a proxy, the report
 examines the cost structures between resellers and network operators and
 reviews the key drivers of success going forward.
     Major points learned through the research include:
 
      -- WISPs currently maintain a very small subscriber base -- GoAmerica,
         OmniSky and Palm together had just 271,000 subscribers at the end of
         2000.
 
      -- The greatest nearer-term challenge facing wireless data resellers is
         the development of a subscriber base broad enough to minimize airtime
         costs paid to network operators.
 
      -- Future challenges to WISPs include the reduction of subscriber
         acquisition costs; the negotiation of lower-cost airtime agreements
         with network operators; management of the unpredictability of
         subscriber usage habits; and preparation for support of and
         competition with network operators and newer, faster data-oriented
         networks.
 
     "Their Palms are Red," prepared by Red Herring Research Analyst Mark A.
 Mowrey can be purchased for $395 at http://www.redherring.com/research.
     Red Herring Research (RHR) reports are designed to help business leaders
 and industry thinkers gain reliable business intelligence with a balanced
 blend of insightful discussion and pertinent infographics.  RHR analysis
 addresses the information needs of senior-level managers, executives,
 consultants, academics, and students and is priced within a range from $95 to
 $750.
 
     About Red Herring Communications, Inc.
     Red Herring Communications, Inc. is an integrated network of media
 properties connecting the people, companies and industries whose ideas and
 technological innovations are inspiring and reshaping the world of business.
 Founded in 1993, Red Herring magazine, the company's flagship platform,
 provides in-depth analysis and reporting on the business of technology,
 innovation and entrepreneurialism.  RedHerring.com, Red Herring Research and
 Red Herring Events offer a unique blend of news, commentary, financial
 analysis, investor tools and access to leaders of emerging technologies and
 markets.  A privately held company, Red Herring Communications, Inc., is
 headquartered in San Francisco and has offices in New York, Los Angeles,
 Boston and London.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X72351358
 
 SOURCE  Red Herring Communications, Inc.