By Alan J. Weissberger, alan at viodi.com, www.viodi.com/weissberger/
Abstract
We continue to be amazed by the extremely bullish forecasts for mobile WiMAX and the stark reality that there is little money to be made for deploying that technology (at least in the U.S. where licensed spectrum in the 2.5 Ghz band is generally not available or held by SPRINT and Clearwire- see below). We do believe there will be a good market for both fixed and mobile WiMAX in developing countries (e.g.
Mobile WiMAX – the Bullish argument
Ken Rutkowski <Ken©kenradio•com> writes about The Future of
“Mobile WiMAX will connect 8% of the world’s 1.1 billion mobile broadband subscribers by 2012, accounting for nearly 88 million users worldwide, according to a study by Parks Associates. 52% of these subscribers will be from Asian countries while North and South America will account for another 28%.
Most existing WiMAX deployments are the province of aspiring start-up service providers or incumbent telecom carriers looking to fill coverage gaps. The imminent availability of commercial products and increasing availability of spectrum around the world will change the market for mobile WiMAX and make it viable among major service providers. Taiwan alone will have eight million mobile WiMAX subscribers by 2012. Approximately 160 million cellular subscribers, 6% of all cellular subscribers, were using a mobile broadband service at the end of 2006. Two-thirds of these mobile broadband subscribers used UMTS technology, and the remainder used CDMA EVDO. Both mobile WiMAX and UMTS/HSDPA technologies will gain market share in the next several years, at the expense of CDMA EVDO. TD-SCDMA will also have a meaningful market share due to its strong foothold in China, the largest mobile market in the world.”
According to Kevin Fitchard <kfitchard at telephonyonline.com>: “What was a small-to-middling potential market a year ago has now blown up to encompass the entire breadth of the carrier market. Frequencies like the 2.3 GHz bands are still idle, and the 700 MHz spectrum is ripe for picking. a cable operator considering participating in the next auction, a small rural provider, or an AT&T, you can bet the new WiMAX vendors out there have your number. Don’t say you weren’t warned… “
Mr Fitchard also writes that Nokia will demonstrate a WiMAX hand held device at NXTcomm 2007, “Nokia-Siemens Networks will attempt to prove the Mobile WiMAX concept at NXTcomm this year, demonstrating mobile connectivity between its Flexi base station and a souped-up version of Nokia’s N770 Internet tablet.
The N770 is built for Wi-Fi connections, but Merji-Michael Khorchidian of NSN’s WiMAX technology marketing group said that NSN is optimizing the tablets for Mobile WiMAX to demonstrate the form factor and experience of WiMAX experience. Nokia plans to release WiMAX handhelds in several designs in 2008, many of which will resemble the large-screen data-centric style of N770.”
Separately, he writes that, “Nokia Siemens Networks has been a surprise player in the WiMAX community. While other vendors looked to WiMAX as a new technology to salvage poorer cellular network sales, Nokia Siemens is one of the largest GSM/UMTS in the world and has a viable interest in promoting its traditional technology. But as Nokia Siemens head of radio access networks Ari Lehtoranta explained in a recent interview, Nokia Siemens sees the two technologies co-existing, creating a new infrastructure market for the vendor while keeping faith with its cellular roots.”
Finally, Mr. Fitchard writes at length about SPRINTs partner companies-Nokia, Samsung and Motorola- in his article titled: Inside SPRINT’s WiMAX Ecosystem. Barry West, Head of SPRINTs WiMAX Project states that “SPRINT is the 800 pound WiMAX gorilla.” Please refer to:
http://nxtcommnews.com/technology/features/telecom_inside_sprints_wimax/
And you probably thought that INTEL was the only WiMAX cheerleader? WRONG!
Other Positive WiMAX News
Believe it or not, there are other WiMAX players. On June 13th, DigitalBridge Communications (DBC) and Alvarion Inc. announced at WCA 2007 that DBC has launched a WiMAX network using 2.5 GHz licensed spectrum in Rexburg, Idaho, based on Alvarion’s BreezeMAXTM 802.16e platform. As one of the first commercial WiMAX networks in the country, service is expected to initially reach more than 7,000 homes and businesses in Rexburg and the surrounding areas, with plans to extend service coverage in Southeast Idaho and Montana in the coming months. Residential service plans deliver speeds up to 3 Mbps and subscribers are able to connect anywhere in the DigitalBridge service area by taking their modem with them, breaking the traditional confines of typical high-speed Internet service.
http://wcai.com/article_005.htm#b
Meanwhile, on June 14th, Clearwire announced a deal with DIRECTV and Echostar that will result in all companies being able to offer triple play services to subscribers. The distribution agreements enable both satellite companies to offer Clearwire’s high-speed Internet service to their customers and contemplate that Clearwire in turn will be able to offer the video services of one or both satellite companies to its customers. This is expected to enable each of the three companies to offer high-speed Internet, video and voice in all current and future Clearwire markets. The launch is planned for later this year. Under the terms of the distribution agreements, DIRECTV and EchoStar will have access to Clearwire’s wireless high-speed network, and will be able to market a bundle that includes Clearwire’s high-speed Internet services to their residential customers. DIRECTV and EchoStar will also have the ability to sell Clearwire’s branded services on a stand-alone basis. Similarly, the agreements call for Clearwire to be able to sell DIRECTV and EchoStar satellite video services.
http://www.clearwire.com/company/news/06_14_07.php
A More Balanced Approach
Nokia-Siemens’ Ari Lehtoranta stated, “For us WiMAX is just like any other radio access technology we have. There is no special strategy there. We just want to help operators to lower the total cost of ownership because radio is such a big part of the cost burden, both on capital expenditures and on operations.
Operators are still doing some soul searching. It could well be there will be a much bigger overlap than we see today. We have already actually won one GSM deal because of WiMAX. Think about it. We have a won a deal for GSM because the operator wants to implement WiMAX in the future, and we were the only one that they see as having a suitable offering for both. As another example, if Vodafone feels that LTE needs a complementary technology or if they want to address enterprise with a different technology, they could choose WiMAX. The jury is still out there.”
On what frequencies WiMAX will focus: “That is one of the risks of WiMAX, that it will become too fragmented. It’s not a big issue regarding the base station because with our modular concept we can develop new frequencies relatively easy. It’s going to be the device issue. The device market starts to fragment, and it might be there may not be enough competitive devices because the costs would be too high. So there are all these different variants. Of course, the 2.5 GHz/2.6 GHz area is the one we hope will gain traction. In Europe it’s 3.5 GHz. We have heard about 3.3 GHz, 3.6 GHz versions and some of the other 2 GHz versions, but we will definitely start with the mainstream 2.5 GHz and 3.5 GHz versions.”
The WiMAX Skeptics
In March 2007, LM Ericsson, the largest wireless infrastructure equipment company, pulled the plug on its WiMAX developments, in order to concentrate on upgrading their 3G cellular technologies as they evolve to 4G. Mikael Persson, manager of strategy and business development for WCDMA at Ericsson, stated at that time, “We want to focus our resources where we’ll get the most bang for our buck. And right now, there’s no bang at all putting it into WiMax. “HSPA is where the market is happening right now. I’m really puzzled by this. I don’t understand how this market [WiMax] will survive.”
http://www.unstrung.com/document.asp?doc_id=120125
Ericcson’s
http://www.wirtel.co.uk/article_mobile_broadband_3g_4g_networks_ericsson.htm
The June 14th Wall Street Journal questions whether SPRINT has sufficient financing for its WiMAX efforts. In an article titled, Sprint Explores Options for WiMax, Sharma and Cimilluca, cast doubt over whether SPRINT has enough financial resources to complete their WiMAX build-out without help.
“Sprint Nextel Corp. is exploring new options for financing its ambitious plan to build a wireless broadband network known as WiMax, including forming a partnership or joint venture with cellphone pioneer Craig McCaw and seeking an infusion of cash from cable providers, people familiar with the matter say.
The steps are partly an effort to soothe investor concerns about the cost of the WiMax plan. Sprint has committed to spending about $3 billion through next year to build a network that will offer high-speed wireless Internet access to 100 million people. Activist investor Ralph Whitworth, whose firm Relational Investors recently bought at least 1% of Sprint, has questioned management about the company’s WiMax strategy.”
If in fact SPRINT is the “800 pound WiMAX gorilla,” (according to
The Journal article continues, “At a Bear Stearns Cos. conference this week, Sprint Chairman and Chief Executive Gary Forsee suggested Sprint would consider spinning off the WiMax unit, but didn’t provide further details. One idea being considered would be to spin off Sprint’s WiMax unit as part of a deal with Mr. McCaw’s Clearwire Corp., people familiar with the matter say. The two sides have had discussions in recent months, the people say.
A deal with Clearwire would remove a potential competitor for Sprint and give it access to Clearwire’s radio spectrum in crucial southeastern U.S. markets like Miami and Atlanta — as it tries to build a nationwide network. Sprint also might strike a more modest partnership with Clearwire, simply acquiring some of its spectrum or establishing a roaming partnership, people familiar with the matter say. A spokesman for Clearwire declined to comment.”
IMS and WiMAX: Friend or Foe?
The two technologies (IMS and WiMAX) can be complementary. There is a mis-conception that IMS is only to be used with cellular handsets. The link below proves that is WRONG!
http://nxtcommnews.com/wimax/news/onemax_ims_wimax_051407/
Closing Comment
We will leave it to the reader to sort out this dichotomy of excessive WiMAX promises by industry pundits vs. the financial reality of getting a decent ROI from an expensive new infrastructure. We continue to believe that WiMAX will be successful in the developing world economies, but will be a niche market in the
Mobile WiMAX has not yet succeeded as a mobile network. And it won’t succeed unless there are many mobile devices.
Whatever happened to “the Internet in Your Pocket” and WiMAX MIDs? Assuming the Mobile WiMAX devices become popular, apps will be developed, e.g. music streaming, mobile video on demand, camera photo uploads, etc.
To date, IEEE 802.16e has been almost exclusively used for fixed/nomadic operation.