WiMAX: Last mile internet connectivity in difficult to access places may be its USP!

The number of people grabbing their Internet access through WiMax is expected to jump to 50 million by 2014, says Juniper Research.The growth in WiMax stems from areas unreachable or unserved by broadband cable or DSL thus underlining the importance of WiMAX as a last mail broadband alternative.

WiMax is a wireless technology that delivers broadband speeds over the last mile, ideal for locations where cabling is not available or feasible. Faster than current wireless 3G technology, WiMax can also serve large metropolitan areas as it covers a wider area than conventional Wi-Fi. Referenced in the report, the most advanced WiMax standard, WiMAX 802.16e, delivers greater throughput than other WiMax standards.

While large-scale WiMax deployments have been delayed, many providers have so far been successful in countries ranging from Pakistan to the U.S. In the US,4G Clearwire wireless networks used by Sprint, Comcast, and other providers, run over WiMax.

The global deployment of WiMax will drive its growth. The larger number of WiMax subscribers will be in the Far East and China region, says the report, due to that area’s early adoption of the technology.WiMax gains in Western Europe and, to a lesser degree North America, will occur in areas underserved by DSL. Growth in Africa and the Middle East is likely to surpass that of Western Europe, says Juniper, gaining 15 percent of the overall WiMax subscriber base by 2014.

“WiMAX 16e will have opportunities not just in developing countries, but also areas of developed countries where the DSL coverage is weak or nonexistent,” said Howard Wilcox, the author of the report. “The key for the industry ecosystem now is to overcome the challenges and ensure trials evolve into commercial services quickly.”

WiMAX: Why will it stick?

Doomsayers and analysts have in the recent past rubished future prospects of WiMAX in the face of a greater acceptance (by major operator/Telecom consortiums) of its competition standard LTE. Nokia has gone to the level of stating that it was withdrawing its investments in WiMAX since it believed that WiMAX was the analogical equivalent of Betamax in the war of standards. Read the reference story and an earlier post on this subject.

A recent market survey by Maravedis, "WiMAX and Broadband Wireless Access Equipment Market Analysis, Trends and Forecasts, 2009-2014," has come up with a few interesting and noteworthy points on the viability of WiMAX as a technology standard.

1. Inspite of a tough year 2008, and a growing buzz about the 3GPP backed LTE being the telecom standard, the WiMAX ecosystem experienced a healthy growth in 2008 and mobile WiMAX has made significant inroads (although short of targets)

2. Over 1.2 million WiMAX complaint CPEs and embedded chipsets supporting mobility were shipped in 2008. MIMO mobile WiMAX devices being a new entrant into the market the previous year, new deployments in various regions worldwide created a substantial market for MIMO mobile WiMAX terminals and infrastructure equipment. Expansion of existing WiMAX networks and conversion of some existing networks from fixed to mobile WiMAX has also contributed to these numbers.

3. Contrary to belief, WiMAX equipment demand didnot taper and operators continued rolling out infrastructure, sourcing terminals and adding new users using 802.16d - 2004 technology. CPE shipments reached 880000 in 2008.

4. US $145 was the ASP of a mobile WiMAX device during 2008 and by the year end USB dongles were selling at prices between $60-70 for high volumes.

5. Mobile WiMAX devices shipped in 2008 were mainly indoor units.

6. 40% of mobile WiMAX devices had embedded VoIP capabilities and about 7% had other advanced functunalities such as WiFi. USB dongles accounted for 34% of total shipments and were operating almonst all in the 2.3GHz and 2.5GHz spectrums.

7. Korean vendors (Muyngmin, Modacom, Samsung) accounted for 36% of all mobile WiMAX terminal shipments. Taiwanese vendors (Zyxel, Asus, Gemtek, AWB) accounted for 25% of terminals shipped.

8. WiMAX market infrastructure: Alcatel-Lucent, Samsung, Alvarion and Motorola were the key suppliers of WiMAX equipments and 151,000 sectors were shipped at an ASP of $11,500 generating $1bn in revenues.

9. In the Chipsets makers, the market was dominated by Beceem, GCT and Sequans. Intel and Runcom had a stake in the Wave 1 devices capable of MIMO operations and with very limited support of mobility. Samsung's own chipset solution gained 7% of the market share.

10. In light of recent technical and commercial wins by LTE, WiMAX is not certainly an all conquering solution, but Maravedis predicts that there will be an accumulated 75 million WiMAX subscribers by the end of 2014. Service revenues generated by BWA will reach US$15 billion in 2014 and WiMAX equipment market will reach an annual US$4 Billion in 2014, from over US $2 billion at the end of 2008.

What the report seems to be poiting at it that, though LTE has the backing and auspices of a majority, it is unlikely that LTE would deploy sooner than 2012. That gives WiMAX a 3 years headstart and it could greatly benefit WiMAX since, Proprietary and fixed WiMAX equipment markets will continue to grow organically to meet the needs of WISPs and vertical segments. These 3 years and the market traction would become a strong foothold for WiMAX in the face of competition from LTE as the 4G Tech Standard. WiMAX may not be the winner ultimately, but given its earlier time to market, it will not be the looser as well. The eco-system will thus have both tech standards and rightly so, because there are nuances in WiMAX that LTE cant better and vice versa. In effect, there are parallel markets that could thrive under both these technologies. After all, one technology standard may not be the healthiest thing in the market.

So much so for the analysts, doom-sayers and nay-speakers for WiMAX.

http://eetimes.eu/wireless/217702210;jsessionid=45LJQIUTXXLIYQSNDLPCKH0CJUNN2JVN

LTE, WiMAX: Co-Existance versus Winning

Making its loyalties clear, for the first time in about 5 years, Nokia has averred LTE to be the future 4G technology standards over WiMAX. In an interview to Financial Times, Nokia EVP (New Markets) Anssi Vanjoki, fore-beared WiMAX to be Betamax of the 4G technology standards. His remarks were the most dismissive by Nokia of WiMax to date. Nokia has previously been perceived as taking care not to be too critical of WiMax, while Nokia still has a seat on the board of the WiMax Forum.
Sony Betamax and VHS were also involved in a war of video format technology standards in 1970s and 80s, which was eventually won by VHS setting the technology standard.

The Finnish company is betting the 4G wireless standard LTE - Long Term Evolution - will dominate the mobile world by 2015 and WiMax will be the big loser.Nokia’s claim is the first in an open forum and comes after the Finnish Phone maker has had stakes in both the technologies. Nokia went as far as developing the first prototype of WiMAX based internet tablets, which were subsequently never put to production. The telecommunication industry is increasingly getting fragmented into the LTE and the WiMAX camps.

While I have covered WiMAX and LTE in a few other blog posts as well, I fail to see why one technology must beat the other in the future technology perspective. Both technologies may be fulfilling the same objective of high speed data carriers, but the technologies per se are based on very different platforms. LTE with its greater carpet area will allow users to access high speed data from a bigger geography. It has an able back up in terms of the 3G/2G network. If there is a hole in the LTE, users will tend to fall back on the 3G/2G backbones, there by not breaking the connection. The ability to leverage on the 3G/UMTS infrastructure decreases the initial costs.

WiMAX on the other hand, depends on line of sight which limits the geographical spread. However, it’s enhanced features such as security and multi-bands make it a huge bet in the enterprise segment. It will essentially replace WiFi as the office standard. Being a high value segment, the profitability of WiMAX could be expected to be higher that LTE. From the consumer perspective, WiMAX has a low operating cost, reducing the per unit cost. However, unlike the LTE, WiMAX has a high initial cost of infrastructure installation.

On the whole, while 80% of the telecom footprint will be LTE, WiMAX’s 20% will be more profitable and versatile. LTE on the other hand will be mostly voice/data based services.

I guess, we will have to wait and watch how this space develops. It will be only good for the consumers if both technologies are allowed to take their own course to offer the best of 4G technologies to the consumer. The future ought to be decided by the consumer more than anyone else.

Debating WiMAX and LTE (Part II)

Picking the winner

Experts and bloggers all over have contested and claimed on which one is better than the other LTE or WiMAX? This is perhaps precipitated by the camps which back the technologies. However, a third view on these technologies suggest that there is no winner in strict terms because these technologies are complementary in nature. Bore OFDM parent, WiMAX has a data background and LTE has a voice background. Furthermore, WiMAX will work on 5 levels of service such as emergency services, public safety, data transmission (real time and otherwise) and Voice. To that extent it appears to be more versatile than LTE which has only two levels of service (one for voice, and the other for everything else). So the usage and market positions of these two technologies will depend on customers and their usages, spectrum positions and other technology quantities. Thus the idea (as depicted bythe graphic below) is complementary technologies for divergent telecom needs. There is a possibility that a single vendor may be use both these standards to provide services to different class of consumers!

Advantage LTE: Where does LTE score above WiMAX?

LTE is the natural evolution resultant from 2G to #G and onto LTE. Thus

1. Handset manufacturers are likely to weight toward LTE handsets (as an extension of their 2G,3G,3.5G lines)

2. Using the existing UMTS network for 80% of its needs, LTE will not involve very high CAPEX involvements. Thus a better experience can be rewarded to the consumer with less investment as far as Telcos are concerned.

3. Mobile operators will roll out LTE and users can fall back on the 2G/3G networks where-ever there is a "hole" in the LTE network.

Advantage WiMAX: Where WiMAX would outscore LTE?

1. WiMAX works on a open standard which translates into a cheaper network.This reduces the cost of operations to almost half of that of LTE

2. As discussed earlier with 5 levels of service, WiMAX is a more versatile service compared to LTE.

3. Build on the IEEE 802.16 wireless broadband standard, fixed WiMAX (802.16D) will tantamount to a huge WiFi area. So this can be used in large campuses and office complexes and for within city Broadband and voice services (as long as in line of sight). Thus in terms of usage, WiMAX can be versatile in terms of group usage as well.

Weaknesses LTE and WiMAX

1. LTE will be limited to single subscriber system on a large carpet area.

2. WiMAX would work on a multi subscriber system in a small carpet area. Also, with loss in line of sight and distances between the tower and the reciver, the rates of data transfer may be erratic and inconsistent.

Final Verdict

Yet again, it will be different strokes for different folks sort of a thing out here. Taking pole positions with any one technology could prove to be counterproductive for the players in the market. While LTE will ride upon 80% GSM market share, WiMAX will be handy in Enterprise operation markets and data heavy networks. So while LTE will be at a lesser advantage in Data, WiMAX may find it difficult to cover full geographies as exhaustively as LTE!

The interesting bit is that a study into cellular subscriber patterns in 2012 still reveal that 55% of 4.8 billion cellular subscribers (by 2012) would still be using the GSM/EDGE/GPRS technologies and only a lowly handful will be into WiMAX and LTE.

Debating WiMAX and LTE (Part 1)

LTE (Long term Evolution) and Wimax (Worldwide interoperability for Microwave access) are the two competing fourth generation technology standards that will usher in next generation wireless. (Thats a long long way off for a country like India, which struggles with 3G roll outs.)

As the graphic above suggests, the debate today centres around LTE versus WiMAX. Interestingly enough both these technologies come from the same parent OFDM. To that extent they are siblings and this is about sibling rivalry (Kane and Able anyone?)

Graphic on how data speeds stack up in Technologies. This doesnot mention the super standard which would be a combination of LTE and WImax and is supposed to have 1GB/Sec speeds on data transfer.

The Camps and the Lineage

Wimax is being rolled out by Sprint Nextel - Clearwire partnership. The roll out barnd would now be Clear (It was Xohm earlier). The roll out is expected to begin in 2009. This group has the auspices of Intel, Time Warner Cable, Google and Comcast and we will see why they have this backing. Mobile WiMAX has been implemented by WiBro in South Korea since 2006. As a technology WiMAX has been around for sometime now and it is now that it is beginning to see serious on the ground action.

LTE is being spearheaded by carriers At&T and Sprint in US, NTT Docomo in Japan. 7 major Telecom companies have agreed to a mutual framework for licensing I P Rights relating to LTE. This includes Alcatel Lucent, Ericsson, NEC, Next Wave Wireless, Nokia, Nokia Siemens Network and Sony Ericsson. The clamor for LTE standards recieved a big boost when Nortel deserted its WiMAX position to check into the LTE camp (Nortel is a toast of recesssionary history now). Vodafone, the worlds No 1 operator also supports LTE standards, which comes as a huge fillip to the LTS camp!

Time to Market

WiMAX will see the first level of deployments and serious action in 2009 and it will have a head start over LTE, which would only come alive by 2011-12. Having a 2-3 years head start can be a boon as GSM proved against CDMA. GSM was ahead of CDMA in terms of launch and till date enjoys 80% of the world market share.

This time to market for WiMAX as a technology will be offset by the pace of LTE launch. LTE will use the existing UMTS networks for a quicker launch. Thus it makes up for the time disadvantage by the incumbent advantage in terms of roll outs.

Wireless technologies that will impact India significantly in 2009

(2G,3G, Wimax and WiFi/VoIP: My choice of wireless technologies that will impact Indian telecom scene in 2009. However, more than the technology and its acceptance, I have focused on the stumbling blocks and hence what to expect out of these technologies.)

In 2009, India should see a great deal of activity happening in the telecom sector. 1. 2G would continue its unabated subscriber addition with another 100 million new users.
2. After a few years since its been in the horizon, 3G would finally see the light of the day.
3. Wimax would see some metro action in the second half of the year.
4. Wi Fi/ VoIP would serve the enterprise segment as the most favored data/voice transfer mechanism

However in terms of mass absorption and usage, more than 98% of the consumers will depend on the 2G network and fixed line access for communications and internet. The consumer acceptance and usage rates would directly depend upon the cost of ownership or per unit costs of communication. From a technology, infrastructure and company’s perspective, the government policy structure, licensing fees, USO levies and usage charges need to be more transparent and less inhibiting. 2009 is going to be an election year in the country, which would mean truck loads of populist measures. The exchequer would try and recover the money from the licenses, levies and usage charges in the sectors such as telecom. If that happens, then the roll out of these technologies could be seriously impeded.

Going back to the discussion on technologies:

2G with its rock bottom tariffs would be the choice of the majority who use mobiles for little more than voice and texting. We have been adding close to a 100 million users for last three years in succession and this trend will continue till 2012. All this subscriber addition would happen through the 2G (GSM and CDMA) technologies.

BSNL 3G services would start by the end of Jan – Mar 2009 quarter and over the next 9 months, we would see the 3G roll outs in most of the metros and some mini metros. However, the Rs.4040 crore 3G license is prohibitorily priced. In these days of recession, companies may not want to bid on this price. I do not see a profitable standalone business case for pure 3G services for any operator in India. Evidence from around the world is overwhelmingly against such a 3G business case. From the consumer perspective, there are a limited number of high profile, high ARPU consumers who would buy into the 3G, but that is a significant minority.

Wimax also suffers from similar licensing issues. The services are pegged at a licensing fee of Rs.2020 crores and there isn’t even a proper policy structure in place. Tata and reliance which have bought Wimax states, are currently limiting their efoorts to metros and Class A cities at present.

Wimax offers wireless broadband access to a 30 Kms radius. This is of significant importance in a terrain like India to increase internet connectivity and in the years to come Wimax may be the technology which will enable internet savvy panchayats. It will beat 3G in costs, but will be limited in its coverage compared to 3G which will have a greater carpet area.

Given the state of legislations, it will perhaps be a year or more, towards the mid/end of 2010, that mobile communications will feature in Wimax.

Wi Fi and VoIP will power the enterprise segments and the growth in this segment will be directly proportional to the office space and lap top sales.

The introduction of these technologies is heavily subject to two other factors

Mobile Number portability which would increase churn at the high end of the users. This has a profitability impact for incumbents
The spectrum release by the government. Chronic shortage of spectrum spaces and their interplay with the defense forces will impact launch dates.

Net of all things, 2009 will be a year which will be remembered as the launch of 3G. However, I doubt whether there will be a large scale activity in the Wimax and 3G space. 2010 may turn out to be the year when real time activity on field happens with these new technologies. A pro active government intent and policy could make a lot of difference to the sector. Our policy makers and leader would need to take a out of leaf of the Chinese government which is doing the 3G full Monty, full steam across the country.

As an after thought, I would like to add a comparison and analogy between Wireless technologies and The railway system in India.
2G would be the general railway (the way we know it, serving majority of the nation)
3G would be the Shatabdi and the Rajdhani, for a select few who are discerning.
Wimax would be the Local trains (The electric ones) connecting smaller parts of a geography.
Wi fi would be the metro rail connecting cities and businesses (Enterprise segment)