Nextlink Adds Turnkey Resale Option

By Khali Henderson

Carriers carrier Nextlink Wireless Inc. launched in October a new reseller program that includes not only the typical arms-length carrier agreement, but also a turnkey option for resellers of its broadband wireless network.

The launch follows an August announcement that XO Communications Inc., Nextlinks sister company, is selling Nextlinks broadband wireless access services in nine U.S. markets. Now, the company has opened up the opportunity to other providers, enabling them to sell private line services at DS3, OC3 and OC12 speeds as well as metro Ethernet at speeds from 10mbps to 100mbps. Nextlinks services rely on licensed local multipoint distribution system (LMDS) wireless spectrum in the 28GHz-to-31GHz range.

When people think of LMDS or the different licensed spectrum, they traditionally think of backhaul.We, too, started down that path, notes Craig Collins, vice president of sales and business development. As we worked very closely with our sister company XO, we have seen the value in being able to turn up and utilize channels, such as an XO, and allow them to resell and push our services.

Collins says the company talked to its target wholesale customers CLECs, cable companies, ISPs, public utilities and wireless operators about what they wanted and their answers fell broadly into two camps, including those that want use of Nextlinks spectrum and those, like XO, that want a more turnkey program.

Accordingly, Nextlinks reseller program offers two options. The first, is a turnkey plan, wherein the reseller partner focuses on marketing, sales and customer site acquisition while Nextlink takes care of everything else required to enable a customer to become operational, including: site set up (e.g., line-of-site and structural analyses, zoning and permitting, and civil work); hardware and installation; system test and acceptance; and ongoing monitoring, repair and maintenance.

The best way to think about the turnkey plans is as a managed offering where Nextlink is enabling a reseller … to go to market and sell Nextlinks services, and Nextlink does all of the heavy lifting, Collins says. The program includes discounts up to 50 percent based on defined revenue thresholds. Typical margins on the turnkey plan range from 15-to-30 percent depending on the markup, says Collins.

A second option is the self-serve plan, wherein Nextlink manages equipment sourcing, spectrum coordination and engineering, while the reseller partner is responsible for all other sales, installation and service-related activities.

Carriers that have been deploying networking themselves were very much of the mind that they can do it on their own and are interested in getting the spectrum, says Collins. We wanted to develop an offer where we still were responsible for the engineering of the radios and frequency, but we put a lot of the heavy lifting back on them.

Collins says regional providers, larger CLECs, utilities and wireless operators are among those that are likely to choose the self-serve plan. Pricing is more aggressive on the self-serve plan, he adds, noting that discount thresholds also are in place and margins will vary based on the resellers own cost structures.

John Grady, director of marketing, says the broadband wireless access service competes with high-speed wireline services but generally is lower in price.

I think our pricing is extremely attractive as a replacement, alternative access play, notes Collins. You couple that with the inability to get fiber [and] with the ability to get this much bandwidth in a cost-effective manner and a timely manner, that puts together the perfect storm for this solution and this technology to take off.

Nextlink is using gear from Hughes Network Systems for the lower speed, point-to-multipoint services.Vendor partners for the higher-speed links have not been disclosed.

It really does work and it really does offer an alternative to fiber plant and copper plant, says Grady. Frankly, in most cases, our network availability is 99.95 [percent], which for a type II service is exceptionally competitive in the marketplace and allows carriers and reseller partners to offer services in geographic areas where heretofore they have not been able to provide those services. These are higher-end services. You are generating more revenue, more margin and expanding your network reach at the same time.

Nextlink executives say broadband wireless service offers a way not only to more quickly move customers to higher speeds but also to migrate from TDM to IP and Ethernet services.

Even if companies are not replacing services day one, what they are using our services for is redundancy, diversity and backup, Collins adds.