Analysys: WiMAX carriers risk becoming dumb pipes

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We all know that WiMAX promises a dramatic decrease in the price per megabyte of mobile data. But research firm Analysys says that new advantage could turn out to become a disadvantage for operators. The firm says that the deployment of WiMAX networks, along with low-cost, unlimited-usage mobile data packages could cause wireless data services to become a commodity. Hence, operators will hit that proverbial dumb-pipe status.

"We are already seeing early signs of this scenario," said Mark Heath, co-author of the new report, "The Future of the Global Wireless Industry: scenarios for 2007-12. The number of relatively inexpensive, uncapped-usage data tariffs from wireless operators is increasing. Heath cited Sprint Nextel's EV-DO Rev. A mobile broadband service for $60.00 month. (Hardly cheap access.)

As prices fall, carriers are likely to lose control of their networks and lose revenue, much like fixed networks have, says the report. I wager that Sprint Nextel could very well set the tone when it rolls out its WiMAX nationwide. It certainly doesn't want to be a dumb pipe. During FierceMarkets' WiMAX Strategies conference last month, speakers from Sprint, including CTO Barry West, explained scenarios such as using WiMAX's QoS features to offer limited throughput to lower-spending customers and completely open pipes to higher-paying customers.

Praduman Jain, director of 4G WiMAX with Sprint, noted that WiMAX operators can keep from being a dumb pipe by not only offering open access but content and services that are unique to the service provider. "Customers want openness but they also want safety and security and a good experience... There are plenty of elements that keep an operator from being just a dumb pipe."

We'll see.

For more about the report from Analysys:
- read this article from Wireless Federation

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