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Unlike Telecom, Woosh began operations with no existing infrastructure on which to build their offering -- and this has meant that they've had to spend a small fortune on getting their service up and running.

A small fortune in this case is some $20,000 per customer, an amount which is, I suspect, far less than Telecom has had to invest to get its DSL customers online.

This must surely raise the question as to whether a large-scale new-entrant wireless operator can ever hope to compete with the broadband services offered by an encumbent telco.

Of course things should be a whole lot easier now for Woosh, since once they've established service in a particular area, the cost of connecting up new users is far less. However, they still have to offer levels of service, performance and pricing that is attractive enough to lure people that might otherwise simply opt for DSL.

Right now, and particularly in the face an imminent roll-out of the UBS service, this must mean that Woosh is confined to relatively niche markets.

The most likely Woosh customer must surely be those who can't get any other form of copper-based broadband, or those who simply prefer to avoid Telecom for whatever reason.

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The big problem is that Telecom's DSL coverage is constantly expanding, and this must mean that Woosh's target market is constantly contracting.

Quite frankly, if I were a betting man, I wouldn't be putting too much money on Woosh right now.

I very much expect that there's a whole lot more synergy going on between Woosh and Telecom than meets the eye right now -- mainly because it's convenient for both parties.

Telecom loves the fact that Woosh is in the market because it can hold them up as supposed proof that there is no monopoly in the broadband market.

However, I would not want to be in Woosh's shoes when Telecom decides that it no longer needs to have Woosh hanging around. Given its huge capital base, market dominance and ability to provide *very* cheap broadband (if it wants to), Telecom could effectively wipe Woosh off the map almost overnight.

I believe that the future of wireless, at least in New Zealand with Telecom's government endorsed monopoly on the local loop, lies with small wireless operators.

If you think back to the mid 1990s when the dial-up market was dominated by dozens of little ISP operations -- well that same high-volume of small-sized operators may well be the best way of delivering wireless to communities at a price that undercuts Telecom's DSL.

In fact, if I had any money to spare right now, I'd be looking very closely at setting up a franchised or cooperative venture oriented around setting up wireless cells capable of feeding a few hundred customers.

Or I could be completely wrong :-)

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