by Alan J. Weissberger – contact Alan for consulting engagements at alan@viodi.com
Abstract
During the past two weeks, there has been quite a bit of positive press about WiMAX deployments and resolution of critical issues. Most if it is not the usual hype and spin we’ve heard for years, but hard news about deployment plans and vendors selected for build-outs. We attempt to summarize these developments in this article and provide links for the interested reader to pursue those topics in more detail.
The most significant recent announcement came from Sprint-Nextel, which plans to spend upwards of $5 billion on their WiMAX build-out. Sprint has also tapped Samsung to build their WiMAX network in New York (details below). Equally significant is the “once in a lifetime” FCC auction in the 700 MHz spectrum, which operators see as choice frequencies for licensed Mobile WiMAX deployments in the 2009-2010 time frame. In Europe, Alcatel-Lucent has been selected to build the first WiMAX network in Germany. In the U.S., the WiMAX World 2007 Conference will highlight the evolution of the North American WiMAX Ecosystem. At the very end of the article we present an analyst’s skeptical view of WiMAX deployment, which we also believe is shrouded in uncertainty (see previous articles by this author at www.viodi.com/weissberger).
Sprint Nextel will spend as much as $5 billion through 2010 on its WiMAX network, which when complete is expected to cover 100 million people. Sprint, which unveiled the "XOHM" brand as the name for its WiMAX business, said it expects revenue of $2 billion to $2.5 billion from the network in 2010.
The capital investment has drawn some skepticism from analysts who believe management should be focusing on its current operations. But a WiMAX network would allow consumers to access the Web on cell phones, laptops and potentially other devices at speeds similar to cable broadband and much faster than Internet access from existing cellular services from Verizon Communications Inc. and AT&T Inc.
As announced previously, Sprint has partnered with Intel Corp., Samsung Electronics Co., Motorola Inc., and Nokia Corp. for their build out. Intel will be supplying components and modules, while the others will be providing the equipment (mobile CPE, subscriber units, access points, and base stations).
This July, Sprint said it would cut the initial costs for the network by partnering with Clearwire, a startup founded by cell phone pioneer Craig McCaw (who made a mint by selling his network to AT&T Wireless). The two companies agreed to provide roaming service to each other’s customers as they each build out their portions of the network, with Sprint focusing more on the largest markets. The combined Sprint-Clearwire WiMAX network is expected to reach 100 million people, with Sprint providing coverage to 70 million people and Clearwire covering 30 million people. Sprint’s coverage is expected to rise to 125 million by 2010 at an additional cost of $2.5 billion. That expansion will depend on the success of the service, Sprint said.
Sprint is also is partnering with Google Inc. to take advantage of its location tracking combined with Google’s mobile search capabilities. Sprint Chairman and Chief Executive Gary Forsee said that the various partners will help Sprint "create substantial demand for WiMAX services."
Samsung to help Sprint- Nextel bring WiMAX to New York
On August 27, 2007, Sprint announced that it had selected Samsung Electronics Co. Ltd. for its New York WiMAX network. Samsung had previously been awarded the Washington, DC, Baltimore, Philadelphia, Providence, R.I. and Boston markets as part of Sprint’s push to use the mobile WiMAX wireless standard.
"Those are very good markets that we’ve given to Samsung," Barry West, president of Sprint’s high speed wireless unit, told Reuters on Monday after Samsung made the official announcement on the sidelines of the Samsung 4G Forum. Samsung officials also sounded an upbeat note, with Choi Gee-sung, president of its Telecommunications unit, saying that “the mobile WiMax business could turn profitable within the next 3 to 5 years.”
Roaming will be Key to the Success of Mobile WiMAX
In light of the Sprint – Nextel roaming agreement, we can appreciate how important it is for seamless handoffs between Mobile WiMAX operators. According to Bram Jan Streefland, Roaming is central to the success of WiMAX- a market that may reach as much as $1.6 billion by 2009 according to Infonetics. Indeed, GSM only became a real success once roaming had taken off. From an end user’s point of view, WiMAX roaming will be expected as the norm. Trustive’s recent WLAN Roaming 2007 research found the most important thing for end users when purchasing subscriptions for wireless hotspot access was coverage. The report also showed this coverage has to be truly ubiquitous – 33 per cent use hotspots all over the world, 37 per cent nationally, and 30 per cent close to home. For more details please refer to:
Author’s Comment: We believe that Unlicensed Operation will be just as big a key to success of fixed and mobile WiMAX deployments. WiMAX standards are intended for use on licensed spectrum, which is severely limited in the U.S. and Europe. However, Wideway Do Brasil LTDA, a leading provider of Internet services in Brazil, for that company’s first WiMAX deployment, has selected Aperto Networks.
Wideway’s deployment will take place in two phases: 1) a pilot test in one city in the State of São Paulo; and 2) a national rollout. The pilot will be conducted in the unlicensed 5.8 GHz band and will include multi-sector PacketMAX 5000 base stations, single-sector PacketMAX 3000 base stations, and PacketMAX 100 subscriber units. Phase 1 will begin in third quarter of 2007.
On August 27, 2007 Alcatel-Lucent said it had won a contract from Germany’s VSE NET to build the country’s "first commercial" WiMAX network in the Saar region bordering France. Work on the network — being implemented with WiMAX license holder Inquam Broadband — would start this autumn and commercial operations should start in January 2008, Alcatel-Lucent said in a statement.
Inquam, which holds WiMAX frequency licenses in Germany, Switzerland, Austria, Slovakia and Croatia, is majority owned by NextWaveWireless (which this author identified in January 2007 as a potential WiMAX network operator).
WiMAX networks are also being developed in Germany by Nortel and Motorola. However, it appears this one will be rolled out first- in January 2008.
For further details please refer to:
http://www.sciam.com/article.cfm?alias=alcatel-lucent-builds-fir&chanId=sa003&modsrc=reuters
Vodafone Group plc has joined the WiMAX Forum , a not-for-profit trade body that certifies IEEE 802.16 technology and promotes the deployment of WiMax networks. (See Vodafone Joins WiMAX Forum.). For a GSM operator to endorse an alternative, wireless IP technology might have seemed unlikely just a few years ago. But now, WiMax seems to be as much a part of the technology roadmap as any other wireless broadband technology, especially in developing countries.
Of course, joining the Forum is not a commitment to offer a WiMAX network. Ericsson joined the Forum several years ago, but has spoken negatively of the technology in recent months and is not making any WiMAX equipment that we know of.
WiMAX World 2007 Keynote Speakers to Showcase First Nationwide Mobile WiMAX Deployment
The conference, which is being held September 25 to 27 at McCormick Place in Chicago, is offering a total of over 190 speakers, including operators, service providers, vendors and analysts. This makes it the largest WiMAX focused speaker program specifically devoted to the topic of wireless and mobile broadband. Do not expect to hear any dissenting WiMAX voices from the speakers or panelists.
The Conference Program Puts the Spotlight on North American deployments:
Business Week on The Road To WiMAX: How Intel’s Sean Maloney shepherded through the technology that’s poised to rewrite the rules of wireless.
When Intel Executive VP Sean M. Maloney heard an estimate that laying fiber-optic cables to every single-family home in America would lead to a whopping $90 billion landscaping bill after installation, he wondered if there was a wireless option. This line of thinking led Intel to become the chief cheerleader for WiMAX, and sent Maloney on a worldwide quest to shape the future of broadband wireless. We have personally heard him “bang the drums” for WiMAX since the January 2005 WCA Symposium.
Maloney has led an industry-wide global effort to develop and market what was in 2002 an obscure wireless broadband technology only a few hundred engineers had heard of. Indeed, after logging hundreds of thousands of air miles, he has rounded up a remarkable coalition of chip, PC, consumer electronics, networking, and software companies in an effort to radically reshape the future of broadband with what’s now called WiMAX.
Intel has played a leading role in the WiMAX Forum and in the IEEE 802.16 standards committee. Which such a comprehensive effort, we credit Intel as the chief architect and builder of the WiMAX ecosystem. For more information, please refer to:
FCC Sets Spectrum Auction:
The long-awaited auction of 700 MHz ‘beachfront property’ is scheduled to begin in January 2008. This much anticipated auction is expected to take in US$10 billion or more in bids for what has been called "beachfront property." That is, licenses for frequencies that can carry mobile data and voice services over long distances and through walls much better than current cellular spectrum. The frequencies are currently used by analog television stations, which are scheduled to turn their channels over in 2009 as they move to digital broadcasting.
Some analysts are not so optimistic (including yours truly) about the success of mobile WiMAX. James Kim, an analyst with Lehman Brothers, states: "There are just too many uncertainties regarding mobile WiMAX to come up with accurate valuations. The network equipment business is an extremely difficult one, with specific geographic constraints in every market. There are just too many undecided factors."
Larger wireless network operators such as AT&T and Verizon Wireless have not said if they would deploy WiMax. AT&T has a GSM based cellular network, while Verizon Wireless (like Sprint) uses CDMA. If they were to roll out mobile WiMAX, it would likely be as a 3G/ 4G cellular overlay network, where the operateors would continue to support their respective HSPA/EDVO revisions for wireless broadband data and video.