Last throw of the dice for WiMAX

Like it or not, this is the year that will prove whether there is a business case for mobile WiMAX. If it doesn’t take off in a substantial way in 2008, I think you can safely proclaim it another broadband wireless niche platform that has come and gone, similar to the likes of LMDS, MMDS and some of the proprietary stuff that came before it. It will live on for providing fixed “DSL-equivalent” broadband in remote areas and emerging markets, but it will have missed its chance of becoming a ubiquitous broadband technology for the roaming masses.

If it hasn’t solidified its base by the end of the year, then it will be because carriers have chosen to stick with HSPA and wait for LTE, which will by then be just around the corner. And that will mean that WiMAX has been pushed down to become yet another footnote in wireless broadband history at the expense of the GSM juggernaut. (And the same goes for the other proposed 4G standard, Qualcomm’s UBM, by the way.)

Of course, it could be that WiMAX really does prove itself in 2008 and there are already some encouraging signs. In Japan late last year the government awarded two licences in the 2.5GHz band to consortia headed by KDDI and another to Willcom, with equipment vendors already lining up to provide gear. One thing to bear in mind, however, is that in the case of KDDI, trials are only expected to kick off in February 2009.

Similarly, 2009 is expected to be the year that another potential WiMAX market, Taiwan, really gets underway. Taiwan also sees itself as a major supplier of WiMAX equipment to the world, and it is interesting that there are already grumblings over there about the cost of WiMAX compliance testing. According to Digitimes sources, it will cost about US$25,000-31,250 for the makers to complete the certification testing of a single fixed WiMAX item. In addition, the WiMAX Forum is charging US$10,000 per mobile WiMAX product to use the WiMAX Forum certified mark compared to US$5,500 per fixed WiMAX model. The news report also noted that a fee of up to US$200,000 is being estimated for the testing of some items.

The WiMAX camp also got a generally favourable report from Juniper Research last week suggesting that the mobile WiMAX 802.16e market will grow to $23 billion by 2013, with half of that total coming from Asia. However, that will still only represent “a single digit proportion of the Asian mobile broadband base by 2013,” according to the report.

The Juniper report also warns that both the availability of suitable devices and the awarding of licences will be important factors in determining the success of Mobile WiMAX 802.16e, both in Asia and globally. Interestingly, it also tips licences in India and Thailand as being crucial to the WiMAX camp. Warning bells should ring right there, given the two countries’ notoriously slow licensing regimes. In the case of Thailand, you can almost guarantee that it won’t be issuing licences for WiMAX this year, given the political environment and the need to create a new regulatory body.

When it comes to devices, one of the WiMAX camp’s trump cards is the backing of Intel, which will see it become standard in every new notebook computer, much the same as Wi-Fi is today. The only problem with this is that if there is no network to connect to, it doesn’t really matter if the notebook is WiMAX-enabled or not.

In contrast, if the push to include HSPA in new devices takes off, the HUGE advantage they have is that the networks and service are widespread already. And the momentum to include HSPA chips in notebooks is likely to happen this year. Throw in all the HSPA-capable mobile phones, and the economies of scale certainly don’t favour WiMAX and won’t any time soon.

Despite some vendor claims to the contrary, WiMAX needs the Sprint rollout in the US to succeed, and it will need to succeed wildly in 2008 if it is to give any vote of confidence to carriers in the rest of the world wanting to roll it out. If it doesn’t, then the GSM/HSPA/LTE camp will have won the battle for mobile wireless broadband supremacy for the foreseeable future. – Geoff Long

Why ITU's backing is bad for WiMax

My most recent column for CommsDay/BroadBand Communities.

At first I didn't really know what to make of the announcement that the ITU has recognised 802.16e, or WiMax, as an official 3G standard. A lot of media and industry groups like the WiMax Forum seem to consider it a game-changing decision. I've got a feeling it will actually change nothing. In fact, it could be detrimental to its progress.

With all the lobbying going on behind the scenes, it wasn't an altogether unexpected decision either. One person I asked about it was Ovum analyst Nathan Burley, who also was doubtful the ITU standardisation will have much effect at all. Even the GSM Association has come out all conciliatory over the announcement, saying they were "relaxed" about it. Well, given the relative market shares of 3G/HSPA versus WiMax, they probably can afford to be relaxed.

Ron Resnick, president of the WiMAX Forum, noted that "this is the first time that a new air interface has been added to the IMT-2000 set of standards since the original technologies were selected nearly a decade ago" and suggested that operators would be more willing to adopt it now that it comes with the ITU's stamp of approval.

As Resnick says, 3G has been around for almost a decade -- yet there are still many countries around the world that haven't gotten around to adopting 3G. So somehow I don't think the world's telecom regulators are suddenly going to swing into action and start bringing in WiMax now that the ITU says it's okay. And it certainly didn't stop the likes of Malaysia, Taiwan and Japan from bringing in WiMax licencing frameworks despite not having the ITU's okay.

I'd say the fact that the IEEE itself has been slow to finalise its own 802.16e standard and initiate interoperability has put off more governments than the fact that the ITU approval was missing.

Another outcome of the ITU decision is that it ends the debate once and for all on whether WiMax is a 3G, 3.5G or 4G technology. Settled: it's officially a 3G technology, although I'm not sure that's necessarily a good thing for the WiMax camp either.

It means that WiMax is now legitimately a competitor to W-CDMA/HSPA and CDMA 2000 EV/DO, and in that regard it has a lot of catching up to do. A decade's worth, in fact. Given the huge momentum around HSPA in particular, the traditional 3G proponents must be relishing the coming market battle.

In another few weeks, the ITU's World Radiocommunications Conference will have discussed the various 4G proposals and likely we will have a clearer view of what the timetable for the LTE and UWB proposed 4G standards will be. As a result, any operators planning to move to a higher bandwidth wireless technology are likely going to want to look at a 4G technology rather than the decade's old IMT 2000 3G. And that's going to push WiMax even further on the outer.

So while at first glance the ITU news would seem good for WiMax, personally I think it can be viewed as another piece of bad news. --Geoff Long

WiMax on the ropes?

Here's a commentary piece I wrote for CommsDay Asean last week, shortly after Sprint Nextel CEO Gary Forsee resigned. Over the past 12 months I've heard so many WiMax vendors suggest the fact that Sprint is rolling out a massive 802.16e network meant that the economies of scale for the technology were guaranteed. But what if Sprint changes its plans?
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When Sprint Nextel CEO Gary Forsee abruptly resigned earlier this week, he probably expected the speculation on his future and the future of the company that he had helmed for the past four years. It's unknown, however, if he expected the questions regarding the very future of the WiMax technology he has helped hype for the past 12 months.

Yet that is the biggest story to arise since Forsee left the office on Monday afternoon: whether there is any future in WiMax without a tier one operator to champion it. Not that Sprint has necessarily dumped WiMax, but most commentators and analysts are now seriously questioning whether the wireless operator will proceed down the WiMax route.

At best, most expect Sprint to slowdown its WiMax activity, which could equally be detrimental to the future of the technology, as Bear Stearns equity research analyst Philip Cusick pointed out in a note to investors. "We believe that Sprint is likely to de-emphasise the WiMax business, which could result in a slower rollout for WiMax in the U.S., lower economies of scale for Clearwire and shrink the ecosystem necessary to attract consumer electronics companies to WiMax," Cusick wrote.

That's quite a damning summation, but it's not the only negative sentiment nor the worst. Patrick Comack, a senior equity analyst with Zachary Investment Research, was quoted by the Washington Post as suggesting the company was negligent in going with WiMax in the first place. "The fact that they bought a $5 billion network without testing it was a violation of fiduciary duty. It's like buying a $5 billion car without test-driving it first," he said.

A similar sentiment was expressed to CommsDay this week by Gartner VP of technology and service provider research Martin Gutberlet, who pointed out that the WiMax technology that Sprint is deploying, 802.16e, commonly known as mobile WiMax, had not even started compliance testing yet. And it is widely known that the network had many technical setbacks.

Aside from a few niche fixed WiMax deployments in emerging markets, Gutberlet all but wrote off WiMax's chances against 3G and 4G technologies such as HSPA and LTE. He said that a new version of WiMax, 802.16m, had more potential but only if it wasn't hobbled by being made backwards-compatible. As this was unlikely to occur, he suggested that WiMax will never make it as a mass market technology.

Even the fact that the likes of Intel was pouring money into WiMax and supposedly making it standard in every new notebook in 2008 did not convince him that WiMax would become mainstream. As Gutberlet noted, Intel has got it wrong before. And it could also be that Sprint has got it wrong, too.

Given that the WiMax camp has put so much emphasis on Sprint rolling out the technology, it's fair to say that if they do indeed scale back their WiMax plans, the technology's future doesn't look anywhere near as bright as it did in the Gary Forsee era. -- Geoff Long

WiMax for ships in Singapore

Here's a novel use for WiMax. Singapore today announced that it plans to make its seaport WiMax-ready. The world's first WiMax port in fact, although probably no one else has given it much thought.

Apparently the government will spend S$12 million to allow ships to access broadband communications and services offshore. It's called the Infocomm@SeaPort programme.

Here's what they're trying for: "thanks to “WISEPORT” (WIreless-broadband-access for SEaPort), activities that could only be done onshore previously can now be achieved offshore as well, from regulatory filings, to broadband communications, to real-time access to navigational data. WISEPORT is one of the initial projects under the Infocomm@SeaPort programme, which aims to provide a mobile wireless broadband network within 15km from Singapore’s southern coastline."

Later this year there will be a Call-for-collaboration (CFC) to develop new WISEPORT content and software applications for the seaport community. They said these content and applications could range from messaging services that allow ships to communicate more cost-effectively with other parties, to applications that allow ships to book maritime services through the high-speed network.

You got to hand it to the Singaporeans, they really are top-notch when it comes to e-govt type initiatives.

Do we really need broadband handouts?

We’ve supposedly got cheap and standardised networking components that can allow countries to leapfrog generations of technology. We’ve got concepts like user-generated infrastructure where shared connections are being tied together to form one global hotspot. Competition between not only service providers but also different technologies should be bringing affordable and fast communications to everyone.

So with all of this at our disposal, why does it sometimes seem that we’re regressing to a time when governments took the lead in providing communications infrastructure? Even in the most capitalist country in the world they’re calling for government intervention and more funding to improve the US’s poor showing in the broadband rankings.

Has the market really failed so spectacularly that the only way to get communications infrastructure rolled out is for governments to throw money at the problem?

The regression to government-led infrastructure is not confined to the US, however. In Thailand, for example, the rate of regression is probably world-class. A recent proposal was for the state-owned TOT to take control of all of the country’s networks, pool them together and then lease it back to the access providers.

It’s the sort of suggestion that makes you check that the date isn’t the first of April, and unfortunately it’s a suggestion that’s still on the agenda somewhere. It’s about the only time that it seems an advantage that the country is in a state of legislative paralysis.

When it comes to throwing money at the problem, however, Australia would seem to be leading the pack. I think most of the world doesn’t realise just how much money both sides of government are talking about giving out to build broadband. The incumbent government is offering $600 million for regional broadband, while the opposition says it would provide funding of some $4.7 billion if elected. Those are serious sweeteners.

There’s nothing wrong with governments having the goal of attaining world-class infrastructure. I just wonder if the paybacks will be as good as they’re expecting. Obviously the thinking is that the country will be more competitive as a result of blanket broadband coverage. Would be interesting to measure though. You could also argue that it’s just ensuring that everyone has equal access to digital entertainment.

Many people seem to agree that pervasive and super-fast broadband connections lead to economic growth. I’d like to see the data to back it up. If places like Stockholm, Paris, Hamburg and others now have widespread access to 24Mbps connections and higher, in some cases 100 Mbps pipes, have the citizens or businesses in those places become better off financially? Or do they just have better movie collections?

As well as serious studies into the economic flow-ons of superfast broadband, I’d also like to see another type of study – whether funding or regulatory reform is the best way to improve infrastructure. For example in the U.S., there are many who would argue that the problem lies with the power of Big Telco. Their lobby armies ensure that the vested interests of the big players are protected.

Similarly, in developing countries like Thailand it’s often the regulators that are stopping infrastructure from being built. But if they would allow outside competitors to enter the market, and allow new technologies like WiMAX and so on to flourish, they could probably have world-class infrastructure in a relatively short period of time. And all without the government having to open the public purse.

Let’s applaud the goal of wanting to have world-class infrastructure. But let’s also see if world-class competition and regulatory policies are a better way of delivering it. – Geoff Long

How WiMAX can disrupt the cellco cartel

I'm now working on our Broadband Communities newsletter, which has lots of stuff on WiMax and muni wi-fi this week. Go to www.commsday.com if you're not a subscriber (it's free).
In the meantime, I thought I'd resurrect this column on how WiMax can make its mark.

How WiMAX can disrupt the cellco cartel
The time to prove the demand for WiMAX among users is at hand. While the hype machine has been active for some years, it’s only now in 2007 that we’re really going to see any activity in terms of commercial networks, particularly of the mobile WiMAX variety.

And they’ve got a lot of catching up to do with HSDPA, which has enjoyed a steady stream of rollouts around the world. The question is, how many users of a HSDPA network, or a handset that’s capable of using it, are actually making use of mobile Internet capabilities? I suspect not too many.

In fact, in a presentation at the WiMAX Strategies Asia forum recently, Motorola head of technology for South and East Asia, Dr Ray Owen, noted that last year worldwide ARPU for mobile cellular data actually dropped, and is tipped to rise only slightly this year. That would suggest that other than SMS messages and ringtones – the bread and butter of data ARPUs – subscribers aren’t buying this mobile Internet thing.

And with good reason: it’s overpriced and often hobbled.

Everyone has known for years that roaming fees for mobile voice are excessive. Roaming fees for mobile data are nothing short of extortion. Even among business people who travel regularly, many are forgoing the mobile data features of their phones because of high data roaming charges. For independents (ie, those of us who pay our own bills), the shock of the bill on your return is not worth the pain.

And the latest news is that operators such as Vodafone and Orange in the UK have been disabling the Skype and other built-in VoIP capabilities in the new Nokia N95 phones. That way they can lock users into their higher prices when making international calls or when roaming abroad.

Skype has also made a submission to the US Federal Communications Commission (FCC) on the same issue. In its “wireless net neutrality” proposal it called for users to be able to use Internet communications software and attach their own devices to any wireless network. Many commentators have pointed out similarities to the 1968 “Carterphone” decision, where AT&T was forced to allow users to connect third-party devices to their fixed line. (The decision was named after Tom Carter, who had a device for patching phone calls into two-way radio gear)

The mobile phone operators also want to lock you into their own walled garden of content as well. Last year Google hit out at such practices, accusing them of blocking access to Internet content and services including Google. “They’re inserting themselves in between you and an application that you want. I think that has scary, scary implications,” Chris Sacca, a Google senior exec, was quoted as saying.

So how does all of this help the WiMAX camp? It allows them to pitch their services as a “pure IP” play from day one. No walled gardens of content, no hobbled applications or disabled features, just pure and unadulterated access to “the” Internet. Wanna make voice calls, either international or local – go ahead, it’s just another application available on the Internet. Given that there’s already a WiMAX roaming forum being set up, it could seriously eat into cellco roaming fees the way Wi-Fi already is today.

One WiMAX operator at the WiMAX Strategies Asia forum is doing just that, even while offering its own VoIP services. “I don’t have a problem if my subscribers don’t use my voice but use Skype,” said Peter Ziegelwanger, managing director of Austria’s WiMAX Telecom. “What I can do is promise quality with my VoIP service,” he added.

Of course the mobile operators could also hit back with similar deals themselves. In a small way, this has already started to happen. Hutchison has launched its “X-series” of services that includes mobile Skype and other popular Internet services for its 3 mobile brand around the world, including in Hong Kong and more recently Australia. And users also get a flat monthly fee for mobile Internet as well.

Speaking to BroadBand Communities’ sister publication Communications Day, Hutchison Whampoa Group finance director Frank Sixt claimed that 3 was the first mobile operator in the world to tear down the walled garden. “Up until now network operators have treated network capacity as their most expensive asset. Historically it was and they rationed it and sold it at the highest possible price,” he said. “3 is the first mobile operator in the world to change the mobile media business model.”

To date, the rest of the mobile operator community has not followed suit. Which leaves a clear opening for WiMAX operators to offer – and more importantly market – what could be an important differentiator. That is, a “pure IP” service that is not hobbled or outrageously expensive, either at home or when on the road. – Geoff Long