Will WiMAX 2 revitalize the WiMAX industry?

The WiMAX industry has worked hard to develop a vision and market strategy for WiMAX 2. But since most WiMAX service providers have abandoned the technology in favor of LTE for their next-generation mobile broadband deployments, the WiMAX industry has repositioned WiMAX 2 for vertical applications and other niche markets. The strategy offers some hope for WiMAX 2--but it also has drawbacks, which is not good when business options are limited.

"Four years ago WiMAX had a wish and a dream, but that's not what happened," said Mohammad Shakouri, interim chair of the WiMAX Forum. The organization is now promoting WiMAX solutions as complementary to LTE rather than competitive with it.  

The WiMAX industry developed WiMAX 2, based on the IEEE 802.16m standard, to improve mobile WiMAX network capacity and deliver faster data rates to customers. On paper and in field trials, WiMAX 2 was successful, and in January, the International Telecommunications Union formally approved WiMAX 2 as a next-generation IMT-Advanced standard along with LTE Advanced technology. The WiMAX Forum is now preparing a WiMAX 2 certification program so that vendors can begin introducing certified equipment to the marketplace; the program should launch by July.

The accomplishments may not be enough to fully revitalize WiMAX 2, however. With the exodus of its operator partners, most WiMAX vendors have also left the industry. Samsung is considered the main supplier for WiMAX 2.

"I find it very difficult to believe that this will revolutionize WiMAX's fortunes," said Keith Mallinson, founder of WiseHarbor. "All the major players have made their exit plays."

Operator support is lacking
Nevertheless, WiMAX does appear to have some staying power--at least for now. During 2011, Shakouri said, the WiMAX industry grew 15 percent from equipment sold for existing networks. But the industry needs to find traction with WiMAX 2 to prevent WiMAX from becoming an end-of-life technology, according to Phil Marshall, chief research officer at Tolaga Research.

"The WiMAX community has an incentive to try to promote WiMAX 2 and identify markets where they can get momentum, because if you don't do that you're throwing in the towel," he said.

The WiMAX Forum still believes some high-profile operators will adopt WiMAX 2, and it hopes that successful implementations will attract more operators. The main company to watch is UQ Communications in Japan, a subsidiary of KDDI, which trialed WiMAX 2 last year. UQ's investment is important, Infonetics Research noted in September, because it shows there is an alternative to LTE. It is also important to the WiMAX Forum because it will showcase UQ's thriving use of WiMAX for MVNO and other wholesale services.

Another expected operator is YTL Communications in Malaysia. YTL was awarded spectrum in December that it said it will use to support its WiMAX 2 roll out. Max Telecom in Bulgaria is also interested in WiMAX 2.

But are these deployments guaranteed? According to Marshall, UQ is seeking a regulatory easement to allow it to use LTE technology in its spectrum, which is currently allocated specifically for WiMAX.

"In the interim, they have an interest in promoting the evolution of WiMAX because that's all they can work with at the moment," he said. 

And Wing K. Lee, YTL's CEO, told the Wall Street Journal in September that YTL "could switch to LTE quickly if that standard becomes most widely adopted."

Vertical markets are key
Vertical markets are vital to WiMAX 2, and the forum is working hard to sell the technology to utilities, smart cities and airports.

WiMAX has made some headway with utilities, and these deployments have helped drive WiMAX sales in 2011, according to Infonetics.

Smart cities are another emerging market. The WiMAX Forum touts previous municipal deployments in Taiwan and a significant new win in Houston, Texas, which is deploying a city-wide 802.16e mobile WiMAX network. But cellular operators are also targeting these types of opportunities.

WiMAX does have exclusivity in an aviation segment that will use mobile WiMAX as the basis for a forthcoming airport surface communications system called AeroMACS. This win showcases WiMAX's suitability for use in rigorous, demanding industries. It is a finite market, however. According to the WiMAX Forum, AeroMaCS represents a total potential market of 20,000 - 36,000 base stations, 375,000 ground vehicles and 13,000 airplanes. The system is also specific to 802.16e.

The vertical market strategy for WiMAX 2 may in fact be undercut by 802.16e, which will be suitable for many verticals and even preferred, at least initially, because devices based on the existing technology will be cheaper than early WiMAX 2 products. Vertical markets may also decide that WiMAX 2 is "not as compelling because the ecosystem will be more limited," said Monica Paolini, founder and president of Senza Fili Consulting (and a Fierce contributor).

Even if operators and others want to use WiMAX 2, many will need new spectrum to offer the technology. Older mobile WiMAX networks can operate in channels as narrow as 5 MHz, but WiMAX 2 requires a 10 MHz channel. Operators will want to deploy it in 20 or 40 MHz channels as customer demands for high-bandwidth applications and faster data rates increase. 

"The challenge for the industry is to identify these broadband channels that are affordable," Shakouri said.

Will WiMAX 2 revitalize the WiMAX industry?