While understanding how WiMAX will deliver big bandwidth is of large importance, understanding how it will be used, and by what, inside the premise is of paramount importance to service providers. Nolle offers up his insights on the business opportunities for WiMAX.
by Tom Nolle
So many telecom developments claim to be revolutionary that a vendor making no claims for its products might be the real standout. Nevertheless, we seem to be headed for a revolutionary development with the wireless standard, WiMAX.
With the announcement of a pact between Sprint and Intel to support WiMAX, the 5-year wireless standard finally seems to be gaining ground.
WiMAX is a grown-up version of the Wi-Fi standard that has created such a boom in home networks and even spawned interest in municipal broadband access based on wireless. But unlike Wi-Fi, WiMAX offers both licensed and unlicensed operation, which means it will be possible to deploy public services based on WiMAX without the interference risks that would plague Wi-Fi.
WiMAX is a technology with many flavors. The earliest (late 2001) version of the spec supports more than 130 Mbps but only with fixed sites and line-of-site communications. The 2004 version supports up to 75 Mbps but with non-line-of-site communications, out to about 30 miles.
Work is also underway to support portability, if not some mobility, at a yet-lower data rate of about 15 Mbps. It’s also available in both licensed and unlicensed forms. The non-mobility versions have been interesting mostly for wireless backhaul and wireless local loop, but the mobility-enhanced version of the standard shows much promise as a consumer technology. This is where Sprint and Intel are now cooperating.
The Mobility Dimension
Mobile content is clearly an area of intense interest to equipment vendors and service providers. Verizon, for example, has been pushing its V CAST approach to 3G wireless video.
Mobility adds a value dimension to multimedia content, allowing it to command a premium from buyers. Even with solid provider support, though, 3G isn’t necessarily an ideal vehicle for wireless. The bit rate is lower than today’s broadband Internet, and many wonder if having people watch video on their cell phones is much more than a fad.
Portable Game Consoles
A much better market may be in the area of portable game consoles, which have higher resolution and larger displays. Microsoft and others are working to integrate their game systems into home entertainment networking and content distribution. Why not portable game consoles instead of handsets?
WiMAX and Xbox: perfect together? It could be. With WiMAX support, gamers could interact with each other and with network game resources nearly anywhere in a metro area. The bandwidth is more than enough to offer a fast download or even streaming video. WiMAX home networks (using unlicensed spectrum) could be supported on the same device, with seamless hand-off between the home network and the public WiMAX network when the gamer moves around.
WiMAX may also be the killer technology for videoconferencing. Personal videoconferencing makes more sense than fixed-location conferencing as a market-builder, given that we’ve had fixed-location conferencing for years. Since most people wouldn’t be able to (or want to) attempt a video experience while driving or walking, the fact that WiMAX likely would not support full mobility isn’t a big deal.
The Licensed Option
The license question is the big one for WiMAX. During the EU 3G bidding frenzy, prices rose so much that the per-customer license cost, even assuming good penetration, was more than $1,000. The same type of bidding on WiMAX would present providers with a first cost hurdle of almost as much as FTTH.
However, in the U.S., a lot of the public spectrum for WiMAX was salvaged from the older multipoint, multichannel distribution service wireless spectrum, and BellSouth, Clearwire and Sprint/Nextel have an enormous chunk of it, obtained at a very low per-customer cost. That’s why Sprint’s pact with Intel could be critical.
The Unlicensed Option
Unlicensed competition obviously is possible everywhere, but with all the risks that would be present with Wi-Fi. Without a license, a provider can’t be sure that others won’t interfere with services, and even local governments appear, under an FCC ruling, to lack the power to restrict the use of unlicensed spectrum to support their own municipal wireless plans or to insure wireless order among unlicensed competitors.
Unlicensed WiMAX will also lack the range and capacity of licensed versions, though it’s not completely clear at this point what the maximum for either would be in the unlicensed space. But if gaming is in fact a big potential application for WiMAX, the fact that it’s not mission-critical may give the unlicensed competitors a shot, even municipal governments that have been toying with or trying Wi-Fi for ubiquitous broadband in the past.
It may seem strange that something as “trivial” as gaming could prove a big WiMAX driver, but an old-time German economist named Engle once noted that when incomes increase the percent spent on necessities decreases.
Moral: entertainment is perhaps the most powerful driver in this market.
Tom Nolle is the founder and president of CIMI Corp. (tnolle@cimicorp.com)
