Make-or-break year for WiMAX
Critical success factors
It's clear that 2005 will be the make or break year for WiMAX. Every wireless chip and equipment maker of note bar Qualcomm is now part of the WiMAX Forum; the planned harmonization of 802.16e with Korea’s Wi-Bro could create the first unified global standard for both fixed and mobile communications; WiMAX could quite realistically be the basis, in later iterations, of 4G.
Yet it remains, at the start of 2005, a phantom technology. Standards are ratified but not equipment has yet been tested or certified for compliance; most of the assumptions about the pros and cons of WiMAX are based on experience with proprietary broadband wireless, operating with very different business models and cost structures. Two things are certain in this hazy picture – WiMAX has the potential to be the most disruptive communications technology since Marconi, and it will only achieve this is significant milestones are achieved during the year ahead, in order to maintain confidence and momentum and fend off the challenge from the cellular community.
We believe that the critical success factors for WiMAX are as follows. All carry risk, and all are to some extent dependent on the others. Demonstrating concrete progress towards most of them in 2005 should ensure a high level of success for WiMAX, while failure could enable the cellular community – those players with their fortunes bound up in UMTS, for instance – to sideline it by gaining sufficient traction for their own alternatives that WiMAX loses its killer edge.
Vague timescales for availability of ‘real’ certified WiMAX gear are damaging confidence and making it hard for would-be adopters to plan. They have to make the choice of gambling on a vendor’s pre-standard gear, hopefully with a firm migration plan like that offered by Wi-Lan, or delaying roll-out and potentially losing market advantage.
Realistic CPE roadmap
Intel has done more than any other company to create interest in WiMAX, but it has also attracted accusations that it is driving the standards too close to its own agenda – creating a mobile broadband wireless network that will spur sales of PCs and other devices, rather than focusing on other important applications. It has laid out an ambitious program for the evolution of a very low cost customer premises equipment (CPE), embeddable by 2006 in a notebook card and by 2007-8 in a mobile phone. Since the falling cost of CPE is the most critical factor in justifying the WiMAX business model, as against proprietary alternatives, it is vital that the roadmap materializes and confidence in it is retained.
Development of software and applications
The 802.16 standards cover only the physical and MAC layers and WiMAX still looks somewhat sparse in terms of higher level functionality and added value. Companies like Motorola are working hard to coordinate efforts to rectify this, and start-ups focused on such areas should do well. There is also a need to identify and develop usable applications that are distinct to WiMAX, so that its operators avoid competing merely on the basis of a price war with DSL or cellular.
Enterprise applications will be particularly important, since corporate uptake will help lure big service providers and instil confidence in the technology. But to succeed in the enterprise, aspects such as security and quality of service, although already strong in WiMAX, must be rock solid.
Limited spectrum options could be a brake on WiMAX’ progress. Initially, equipment will be available for 3.5GHz, which will lead to a goldrush in parts of Europe, and in unlicensed 5.8GHz. While unlicensed bands will be attractive for early, low risk experiments in deploying WiMAX, 5.8GHz has limited range and is no use for mobility, while enterprise and fixed/mobile services will require the quality of licensed bands. In 5.8GHz WiMAX will compete with Wi-Fi hotzones and this could turn into a price war.
The next profile will be in 2.5GHz for the US MMDS bands, but these are tied up by a small handful of operators – including Clearwire and Sprint, which look likely to create a duopoly in national broadband wireless networks that could be leased to other players. Availability of spectrum, and profiles, for other bands will be critical to WiMAX’ mobility objectives, allowing full non-line of sight and cellular-like performance. Wi-Bro, the Korean technology that will be the basis of 802.16e, was devised for 2.3GHz and companies like Intel are eyeing the ‘holy grail’ of sub-2GHz spectrum, but all will depend on the policies of regulators in different territories.
Moves to mobility
There is huge interest in the upcoming mobile version of the WiMAX standard, 802.16e, but also a lot of hype and false expectation. To avoid an anti-hype backlash of disappointment, the IEEE needs to ensure that the standard is ratified in timely fashion and with minimal political battling. This will enable realistic roadmaps to be set and will prevent too many vendors fragmenting and confusing the market by launching ‘prestandard’ proprietary solutions for mobile operations, that may force a difficult upgrade path later.
Moves by major vendors
There is no doubt of the commitment of the major chip vendors, Intel and Fujitsu, but for large operators to come on board – essential to establish WiMAX as a global contender – the major equipment suppliers must also have clear strategies. Although all the vendors with whom these large customers are accustomed to deal, from Lucent to Ericsson, are now in the WiMAX Forum, few have concrete product plans. The main exception is Motorola, while Siemens and Alcatel have OEM deals with Alvarion and Navini. But clearer signals from other large players would be a major boost, giving operators the confidence that they can buy from their usual manufacturers and that there will be a choice of suppliers capable of meeting their service, volume and quality demands.
All these criteria are capable of being met this year if the community remains focused, confident and reasonably united, and if the regulators take a sensible approach. Many milestones have already been crossed – the 802.16-2004 specification was created with remarkably little delay and political upheaval, by IEEE standards, and a major split over the mobile version was averted by the agreement by Intel and LG to integrate 802.16 and Wi-Bro.
The WiMAX Forum has had some success in its goal of attracting operators to its ranks, with big names like AT&T setting out ambitious WiMAX plans, and Sprint likely to join soon; though it has been less effective in influencing regulators (perhaps focusing too much on trying to achieve global harmonization of spectrum policy, rather than on getting new bands opened up for WiMAX). Already, the specter of WiMAX is prompting the cellular sector to upgrade its technologies more rapidly than originally expected, and to look towards future migration to OFDM platforms such as 802.16. Just the promise of WiMAX has been disruptive already. For it to fulfil that disruptive potential, however, the technology needs to be tried and tested in a short timeframe, or it risks disappointing expectations before it is even launched in earnest.
Copyright © 2004, Wireless Watch
Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.
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