Signal to Noise: Useful Information and Analysis

Reading the Tea Leaves Sometimes, especially when dealing with an industry like cable that keeps its cards tucked tightly to its chest, it’s necessary to read between the lines. There’s no better time to shake out the tea leaves than when one of the telecommunications industry’s inevitable trade shows creates an overhype of news announcements that could be better spread over the course of the year but instead congeal like hardened gravy poured at the start of a show awards luncheon. This week’s show is VON (Voice on the Net) in Boston and the early buzz is about wireless-mobile WiMAX, the Ethernet-rich, voice-over-IP version of broadband wireless, to be exact. Mobile WiMAX holds very little appeal for incumbent telephone companies which, if they need mobile wireless to add to their wireline package, can always tap sister companies at Verizon and Cingular. Today’s mobile service providers, having spent the equivalent of the gross domestic product of the entire South American continent to get spectrum and build out their cell networks, similarly have no interest in another mobile wireless technology. So why would vendors get in a lather about mobile WiMAX? Why would an established telecom provider like Nortel deliver hard-charging support of a mobile WiMAX standard that isn’t even a twinkle in the standards bodies’ eyes right now? Sprint Nextel’s Interested The easy answer is that some Nortel customers – Sprint Nextel, to be exact – are looking at mobile WiMAX as a way to use the hoard of 2.5 GHz spectrum that it holds. Sitting as it is in mobile no-man’s-land, unaffiliated with any wireline carrier, Sprint Nextel might be just the risk-taker mobile WiMAX needs. Mark Whitton, vice president and general manager of WiMAX and Wireless Mesh Networks at Nortel, says Sprint Nextel’s been talking to Nortel. Of course Sprint Nextel, which, to some, is the cable industry’s greatest ally in the telecom space, has been talking to just about everybody. Ali Tabassi, Sprint Nextel’s vice president of technology development, confirms the carrier is interested in WiMAX. Sprint put out its own pre-VON announcement that it would work with Samsung on mobile WiMAX lab and field trials. Oh, and the carrier’s already working with Motorola on mobile WiMAX as well. Eggs in a Basket But then again Sprint Nextel’s also chasing more traditional wireless technologies like Code Division Multiple Access (CDMA), Evolution Data Optimized (EV-DO) and some non-traditional Time Division CDMA (TD-CDMA) and FLASH OFDM gear in broadband wireless trials so it’s not necessarily marching to the WiMAX tune. Besides, if there’s one thing the telecommunications nuclear winter taught vendors it’s to avoid at all costs putting all its eggs in one carrier’s basket.
 
So who’s Nortel building mobile WiMAX technology to please? "There are some companies that want to keep their interest kind of below the radar screen who are coming to us and asking to do a nationwide buildout of this," Whitton says. "They’re talking about offering certain kinds of entertainment services or other services. The customers for WiMAX are not going to be the same customers that we have for our cellular technologies today." Three guesses who that might be. "The cable service providers, the WISPs (wireless ISPs), CLECs that do not have licenses for mobile services may suddenly have the chance to enter the mobile services market thanks to WiMAX," suggests Adlane Fellah, a senior analyst for Maravedis, an analytical firm that follows WiMAX trends. WISPs and CLECs, though, have had their pockets sewn shut and are barely paying the bills. Cable guys have pockets that not only reach to their ankles, but are full of swag. "The cable service provider is already operating; he’s already serving subscribers," Fellah says. "This becomes a new offering to existing subscribers. I don’t have a crystal ball here but WiMAX is going to be a catalyst for new market dynamics." S-A’s Wireless Play At the same time that conventional telecommunications players were exploring mobile wireless strategies, a born-and-bred cable vendor stepped into the fray when Scientific-Atlanta said it would team with Tropos Networks to modify cable gear to deliver broadband wireless signals over Tropos’ mesh networks. This was not a "some company’s" tease. This was an out-and-out announcement by a member of the industry’s duopoly that it would build wireless equipment. And, since neither S-A, nor its friends at Motorola, move without a lot of indication that the cable industry is moving with them, you have to figure something’s up in the wireless space. "Connecting to the wireless network is an augmentation, it adds value to the consumer and that’s really what cable is all about, feeding a consumer desire," says Bob Scott, director of wireless networking at S-A with no discernible humor or sarcasm in his voice. "We believe the cable network is the best possible way of adding broadband wireless communications available." With that kind of talk you don’t even need to read between the lines. – Jim Barthold