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Wimax hype part 2: bumps in the road
How could it fail? We're glad you asked...
By Matt Broersma, Techworld | Techworld
Published: 00:00 GMT, 03 June 04
Previously (Riding the WiMax hype cycle - part 1) we looked at next year's likely WiMax products and services. Here, we look beyond that to the possibility of WiMax delivering mobile broadband access.
WiMax could really come into its own when it pulls 802.16e, the mobile standard, out of the hat. Mobile broadband wireless is already being deployed by some operators: since February Nextel has been conducting trials of a proprietary technology from Flarion in the southeastern United States, and the company emphasises that mobility is key to its offering. "This is for customers who don't want to be tied to their desk or their office. You can go anywhere and use this service," says Nextel spokesman Chris Grandis. "It's beyond 3G." A Canadian joint venture using NextNet Wireless' technology is not exactly built into a laptop, but the small access device can be plugged in anywhere; the same account can be used for an office and home connection, for example.
Intel points out that 3G is intended for relatively low data rates, being optimised for mobile phone handsets and for voice, while WiMax-type standards are pure data. And why bother installing thousands of Wi-Fi hotspots in coffee shops and train stations when a single WiMax base station will be able to offer broadband to any laptop in a 20 or 30 mile area?
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Mobility is also where WiMax is most controversial, however, because it simply doesn't exist yet. "Mobility is a future play," says IDC's Jan Hein Bakkers. "Even if Intel has mobile chipsets available in 2006, as promised, I don't think we'll see any standardised products before 2007, probably." Gartner research suggests WiMax will not be in widespread use as a mobile technology through 2009.
In Western Europe, already well-served by Wi-Fi and 3G, it could be difficult for a new technology to break in. "Operators already have UMTS networks, why would they need an additional service? I don't see WiMax bringing in that much additional value," Bakkers says.
Limited appeal
Fixed WiMax faces the same problem in Western Europe, say some analysts: the region just doesn't have that much need for another wireless technology. In the US, where mobile users are just getting to grips with text messaging, and huge regions of the country could use better networking options, a technology offering broadband connectivity anywhere is pretty exciting.
In Western Europe, 83 percent of households had access to ADSL last year, according to IDC, and that's expected to reach 90 to 95 percent in another two years. Wi-Fi hotspots are popping up at a rapid rate, 3G data services are being rolled out commercially, and operators such as T-Mobile and Vodafone are beginning to offer bundles that let mobile workers access 3G, Wi-Fi and GPRS, whichever happens to be nearby. "From a Western European perspective, the role of WiMax will be limited," says Bakkers. "Telcos will be mainly looking at WiMax in areas where they don't have ADSL coverage."
Gartner's Keene is more optimistic on fixed WiMax. "It's more than likely that WiMax is going to be used for fixed broadband wireless, and it's more than likely that it will prove very cost effective compared with other wireless technologies. It could effectively impact a lot of small businesses and homes," he says. "Where people get lost on a tangent is mobility."
Proprietary vs. standard
One other factor may end up having a significant impact on WiMax's success, namely the accelerating adoption of proprietary "pre-WiMax" systems. A number of proprietary wireless equipment vendors have signed up to the WiMax forum, agreeing to shift to standardised, interoperable equipment once the standard is ratified. Navini even executed a U-turn and joined the WiMax Forum having previously been a vehement critic. But in the meantime, every installation of pre-WiMax gear is another system that will have to be replaced later on.
WiMax vendors downplay this, arguing that upgrading will be no trouble. "We basically know what the standard will be because Alvarion has been involved from the beginning of WiMax, and is instrumental in producing the 802.16d standard," says an Alvarion spokeswoman. "Alvarion has built a totally new platform from the ground up for WiMax, called BreezeMax. Although today it does not have the Intel chip and is not certified, it is the platform that Alvarion will integrate the Intel chip into and it will be certified WiMax when both are ready."
Industry analysts are sceptical, with ABI Research expecting that the continued demand for proprietary equipment will delay WiMax's adoption in the mainstream until the end of the decade. Pyramid Research agrees, forecasting that WiMax will make up 60 percent of the the wireless broadband market by 2008. In that year a total of two to four million broadband fixed wireless lines in operation, bringing in up to $2 billion in access revenues, with Asia and Central and Eastern Europe the two hottest markets, Pyramid says.
"The market cannot ignore the momentum behind some of these proprietary technologies," says ABI analyst Edward Rerisi. "With equipment prices comparable or sometimes cheaper to those initially promised by WiMax, the market for these technologies is growing at an incredibly fast clip."
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