The WiMAX wait

After years of anxious anticipation, WiMAX technology is poised to enter the mobile market this year as standards solidify, vendors roll out equipment and carriers in Asia and around the world invest billions and prepare for initial deployments. Despite the excitement, however, WiMAX still faces challenges that range from spectrum allocation to technology validation to consumer acceptance behind existing Wi-Fi and 3G services.

To be sure WiMAX momentum is building. According to TeleGeography Research, more than 200 operators worldwide plan to deploy WiMAX this year, up from 36 at the end of 2006 and just ten in 2005. It calls 2007 'the year WiMAX finally comes of age.'

Daryl Schoolar, senior analyst at research firm In-Stat, notes that 'We are now at the beginning point of WiMAX deployments' and after years of hype about the technology 'it appears to be right around the corner.' But how sharp will that corner turn out to be‾

'There is a lot of testing going on, and a few hundred thousand users worldwide, almost all of them now on a fixed-WiMAX service,' Schoolar says. But major deployments are planned this year in Asia and the US, which should validate WiMAX in many users' minds and add momentum to the technology.'

Like 3G, WiMAX is composed of a family of technologies that includes the fixed 802.16 standard and the mobile 802.16e standard that is rolling out in three 'waves.' Most current WiMAX efforts involve the fixed standard or the use of mobile base stations tied to that standard. True mobile WiMAX deployment isn't expected until later this year.

Broadband opportunity

'There is a real opportunity to deploy for WiMAX in places where fixed-broadband infrastructure doesn't exist,' says Bruce Gustafson, director of marketing for Nortel's carrier networks division. Nortel recently partnered with Toshiba and an arm of Japan's Ministry of Internal Affairs and Communications (MIC) to provide engineering expertise, base stations and terminals for a WiMAX deployment on Japan's Honshu Island.

Nortel also is working with Chungwa Telecom in Taiwan to build  what it calls the island's first integrated local government WiMAX network, and it recently announced a large-scale WiMAX deployment in Sao Paulo, Brazil that will allow local carriers to deliver broadband, mobile TV and video, VoIP and mobile e-commerce over a 4G network.

Christopher Lerouge, VP of Alcatel-Lucent's wireless business group, says WiMAX can enable more robust applications than other wireless technologies, and the vendor is working with carriers around the world on implementations. Alcatel-Lucent is working with Taiwan's Chungwa on a mobile WiMAX network that will allow customers in densely populated Taoyuan county to access high-speed Internet access, video streaming and VoIP. (The Taiwanese government is undertaking an aggressive project called M-Taiwan to get public and private companies to cooperate to bring mobile broadband coverage to the island.)

Alcatel-Lucent also announced a deal with Malaysia mobile operator Maxis Communications Berhard to field-test a WiMAX 802.16e solution using 2.5-GHz spectrum. The aim is to satisfy demand for wireless broadband access in residential areas of the country. The company is also spearheading WiMAX deployments in India, Korea, Latin America and in the Caribbean region.

Massive US rollout

In the US, wireless operator Sprint Nextel has chosen Nokia to develop a 4G-based WiMAX mobile network that is being rolled out initially in four Texas cities and then expanded to Chicago and Washington, D.C.

 

during the first half of 2008. The company intends to cover Sprint Nextel's 100 million customers nationwide by the end of next year.

Don Stroberg, VP of broadband mobile strategy, says the network will be used primarily for high-speed broadband service and won't compete with the company's existing mobile voice service (although voice applications such as Skype won't be blocked.) Motorola, Samsung and Intel are also involved in the project; Korean electronics companies Samsung and LG are reportedly developing mobile devices to operate on the network.

Sprint is investing an estimated $3 billion in the effort. While risky, such an investment could have a lucrative financial payoff: WiMAX systems can significantly reduce network operating costs for wireless carriers by eliminating the 'last mile backhaul' now controlled by the large legacy phone providers. By some estimate, Sprint spends 30% of its $20 billion annual wireless operating costs on backhaul.

Stroberg concedes the operating cost savings will be significant once the WiMAX network is up and running. 'That's not the main reason we are doing this,' he says. 'We want to give people high-speed access to the Internet wherever and whenever they want it. In our trials, people say they like the speed and the mobility.' Stroberg adds that Sprint Nextel's ultimate aim is to partner with other wireless carriers around the world to deliver a convenient, accessible wireless broadband network that would work almost anywhere. More carriers backing WiMAX would drive down the costs of chipsets and the mobile devices themselves, he notes. In a sense, WiMAX, in this rendition, could offer for broadband what mobile GSM offers for voice today, a ubiquitous standard allowing customers to roam (or use different SIM cards) in one device as they travel the world.

Frequency confusion

In fact, Stroberg's intriguing vision underscores many of the underlying potentials and pitfalls of WiMAX. Like GSM, WiMAX operates on various frequencies around the world, depending on the spectrum that is made available. Spectrum bands used include 2.3 GHz, 2.5 GHz, 3.3 Ghz and 3.5 GHz, although lower frequencies work the best. Detractors also note that there is much less spectrum made available for WiMAX than other mobile technologies. In the US, for example, Sprint Nextel and Clearwire (a WiMAX venture backed and funded by Intel and Motorola and offering pre-WiMAX standard wireless broadband services in 34 cities serving about 200,000 customers) control virtually all the available WiMAX spectrum

Critics say that's because governments aren't really getting behind WiMAX. 'Spectrum has become a very serious political issue,' says Matt Holdrege, technical director for Strix Systems, a California-based mesh networking company. 'There's a tremendous amount of spectrum that exists around the world, but it is being held by the military, and they are not giving it up. Governments and the military don't want to release it.'

Ovum analyst Nathan Burley says some WiMAX spectrum may be reserved for 3G extensions. He also notes that not one of the existing four WiMAX spectrum bands is broadly available across the Asia-Pacific region, and the licenses awarded often do not favor broad deployments. The picture will become clearer in 2007 and 2008, and this could change. 'Many regulators are now actively promoting WiMAX, and large blocks of spectrum are beginning to be licensed across various markets,' he says in a recent report.

Burley identifies the most promising APAC WiMAX markets as South Korea, Japan and Taiwan.

 

The leading emerging markets for WiMAX appear to be Pakistan, Malaysia, Indonesia and the Philippines.

Still, the spectrum and license issue significantly muddles the future for WiMAX. 'Licenses that have already been awarded are also often fragmented and do not provide wider area or national coverage, which in our view reduces the viability of the business case for the larger operators.'
Even if that obstacle is overcome, many believe the technology faces a battle for widespread consumer acceptance. Mobile operators may resist it because they already have a large investment in 2G and 3G technologies. And competing technologies such as Wi-Fi and 3G have a huge head start. Ovum predicts in Asia fixed and mobile WiMAX will stay 'niche technologies in most markets for the next five years.' The technology's ultimate fate rests on the number of WiMAX chipsets built into consumer electronic devices and whether mobile operators stick with HSDPA deployments.

'Each technology comes with its own strengths and weaknesses,' says In-Stat's Schoolar. 'The more developed the region, the more important it is for WiMAX to be mobile.'

Schoolar and many others believe WiMAX will end up co-existing with Wi-Fi and mobile 3G, perhaps serving as the front-end pipe to existing Wi-Fi networks.

'We want to move to WiMAX. It will give us greater reach, especially in the SMB and enterprise space,' says Lee Gopadze, VP Wireless for US ISP Covad Communications. 'But it is really just coming into the marketplace now, and it won't move into the network architecture until at least 2008.'

Do consumers really desire WiMAX‾ Sprint Nextel's Stroberg says initial tests look promising. But in Korea, a homegrown version of WiMAX called WiBRO has been marketed almost a year, and the uptake is disappointing. According to Telegeography, the service was expected to attract 3.5 million users. It has drawn less than 200 subscribers to SK Telekom and about 900 to KT Corp. The two companies invested an estimated $700 million into the technology.

Is this a harbinger of things to come‾ 'It's not catching on commercially,' says Schoolar. But Stroberg notes Korea's project has different infrastructure capacity different goals and operates on a fixed standard. 'In our trials, the mobility is a big deal,' he explains. 'This is about a wireless device that can be used anywhere with fast upload speeds.'

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