WiMAX: Game On

The WiMAX vision of delivering mobile wireless service to city-wide hot spots across the country and globally is nearing reality, albeit with a few needed tweaks and corrections.

It is reality in Baltimore, where Sprint launched its Xohm service in late September. Impetus provided by the new Sprint/Clearwire company (which will adopt Xohm when the merger closes) has helped. As has the long maturation process of WiMAX technology itself. The bottom line is that this once Jetson-like technology is advancing into the forefront of next-generation services and expanding markets.

And it’s markets – such as the 12-17 year-olds, commercial and mobile – that are expected to spur the WiMAX business.

For example, a recent MultiMediaIntelligence report found that the primary source of new subscribers for carriers in the U.S. is the teen market. By age 17, the report concluded, 84 percent of teens have wireless services. In 2007, there were 16 million teen cellular subscribers, with plenty more on the way.

Translation: It’s game on for WiMAX.

"On the other side of the Sprint/Clearwire merger, we’ll find a new company that is proceeding in 10 markets with mobile WiMAX technology," said Berge Ayvazian, chief strategy officer for the Yankee Group. "And we’ll see a mobile/personal bandwidth offering that extends the value of cable broadband and is synergistic with cable operators. Instead of taking market from cable, it will become an additional distribution network, and we expect cable to adopt aggressive bundling strategies."

By next year, he noted, the WiMAX market should see diversification of the device marketplace in three categories: computer-centric with more WiMAX embedded in laptops and low-cost computers; smart phones; and consumer electronics with content-centric devices such as media players and cameras.
Cable’s partnering will count Partnerships will play a key role in serving the WiMAX market as well. Added Ayvazian: "We expect to see partnerships formed between cable and others in the WiMAX community, and no doubt the rest of the MSOs are looking at the three cable operators invested in the new Clearwire (Bright House, Comcast, Time Warner Cable). They don’t want to wait too long."

In the meantime, the Sprint/Clearwire company is emerging, with the closing date expected to be this December. "We are now in advanced trials, including Portland with 1.2 million people," said Scott Richardson, chief strategy officer for Clearwire. "We’re testing home modems, mobile air cards and mobile connections and placing mobile VoIP (voice over Internet protocol) calls. The only technology kinks to be worked out are finding tower sites and adding coverage."

And assembling a business from WiMAX technology. Clearwire, Richardson said, is testing various pricing options and is currently offering a flat rate service of about $30-40 a month while looking at bundled services, day use of hot spots and more.

There are some pesky operational issues remaining, however. Said Richardson: "There’s a lot of work required around the interoperability testing. How do we test all the chipsets and get them on the network quickly? Building the network is a challenge, but with Sprint we can leverage its towers and testing lab. There’s lots of planning behind the scenes about how to build sites."

And lots of business planning too, according to Sprint spokesman, John Polivka. "We did pick a technology, WiMAX. But it’s a business strategy story and goes beyond the cell phone to the wireless enablement of mobile devices."

The WiMAX story reads beyond the traditional WiFi hot spot, as well. "It’s a hot spot the size of a city," Polivka said. "That’s one of our marketing themes. 3G has worked well. But the 4G world is more data-intensive. It’s a 10-lane highway vs. the three lanes of 3G."

Sprint, he continued, is using 80 percent of its cellular infrastructure, including cell towers, boxes and adding new technologies to the new company’s network. "It’s a data populated-centric service, and we’re developing networks in Boston, Dallas, Ft. Worth and Philadelphia, and 80 percent is infrastructure. We had to create brand new backhaul, which is a fire hose vs. a garden hose. With WiMAX, we actually had to build two networks, backhaul and service. Then, there’s the back office issues like billing, which we had to change to accommodate activated devices. But there is no question the technology is working. Now, it’s a business story."

And it could conceivably be a good one, at least for the new Sprint/Clearwire company and for a fledgling group of WiMAX providers such as Nth Air, a provider of fixed WiMAX service in Las Vegas, Los Angeles, the San Francisco Bay Area and a few other markets.

"We’re at a point where it’s about execution," said Craig Niemeyer, president and CEO of Nth Air. "But unlike Clearwire, whose goal is to be ubiquitous, we’re opportunity-driven and identifying anchor customers and underserved markets for business. The challenge of WiMAX, however, has always been the operation expense and growing the business. But the result thus far of WiMAX technology has been excellent."
Time for the payoff Getting optimal results from WiMAX has been a work in progress, experts maintain. Now, it’s time for the payoff.

"The world is going to IP because of its efficiencies, and WiMAX is all-IP and gets the most use of spectrum" said Tom Gruba, senior director of wireless broadband access solutions marketing for Motorola, a player in the WiMAX space. "The speed to revenue is much faster, and there are several more products available to sell. The power of that is real enabling technology. So why not WiMAX?"

Why not, indeed. Especially for equipment manufacturers such as Motorola. Added Gruba: "In 18 months, we will have a WiMAX ecosystem. There are lots of different chip manufacturers, equipment manufacturers and others that are all part of that ecosystem. That gives the WiMAX space validity. We’re also starting to see the mobile market opening up."

The validity of WiMAX as both a technology and a viable business is also being determined by other factors, such as regulation.

"The technology is not an issue once a regulator knows how it works," said Tim Hewitt, chairman of the regulatory working group for the WiMAX Forum. "Now, we’ve got a diverse approach on frequencies and ranges, and it’s allowing us to ramp up the WiMAX footprint globally. We’ve got to drill down to individual market areas, but the road is open for WiMAX."

Open, but Hewitt admits there are some caution signs. "Regulators will always make sure there is a business case and that the technology works. But most believe WiMAX is so flexible, easy to deploy and less complex because it is an all-IP platform. We don’t see any significant regulatory issues with WiMAX, except in the 3.5 GHz band, where there are huge amounts of radar and satellite earth stations."

As the road widens for WiMAX, innovative new services are emerging, prompting the creation of new business models – and related challenges.

"Getting to the service level of big data business is a hurdle operators must overcome," said Mohammad Shakouri, vice president of marketing for the WiMAX Forum. "Multiple devices, power management, multiple modems and multiple radios are critical elements. With WiMAX, it’s certify, certify, certify."

And that includes the new Clearwire company, he noted. "The key factor for any operator is they must invest a lot of capital to build a network and to get new devices to the network. By looking at WiMAX, Sprint can use 10 MHz channels for more capacity at less cost and faster time to market. The new Clearwire company is critical to the deployment of WiMAX. It has developed a pioneering, innovative service model. The most important thing now is building the business model and structure."
Support groups will help Yet for WiMAX and the Sprint/Clearwire company to flourish, it will take a village of supporting companies to not only build and grow the network, but also expand it beyond the traditional cellular world.

"The next version of WiMAX, 2.0, is already being finalized for launch in 2010-2011," said Julie Coppernoll, director of marketing for WiMAX at Intel, a partner in the new Clearwire company. "The equipment will be coming to market with advancements and enhancements over today’s WiMAX technology. The plan and prototype are being put together and is two to three times faster than today’s speeds. You could think about streaming online movies in the back seat of your car."

Don’t expect that to happen anytime soon, however. Said Coppernoll: "It takes a long time to build out WiMAX, generally about three years in the U.S., and globally, economies haven’t caught up with the spectrum and ROI, but they will."

Meanwhile, WiMAX is expected to show signs of greatness. "We’ve seen impressive performances by WiMAX with multiple things running over the network," she said, "but with unprecedented quality, sound, very little latency, streaming files, up and downloading. We’re committed to WiMAX."

Intel’s primary role with the new Clearwire, she added, will be to add the silicon for the WiMAX model for PCs and help global carriers understand WiMAX and drive standards.

And globally, the new Clearwire company is expected to validate WiMAX technology and business. "It takes a lot to deploy WiMAX, and Sprint/Clearwire are spending lots of money," said Ashish Sharma, vice president of corporate market development for Alvarion, a provider of WiMAX infrastructure equipment. "That’s where the challenge is. But the new company will have a big impact not just in the U.S., but in Japan with KDDI and other 3G operators. It’s huge for WiMAX from an investment standpoint and could trigger WiMAX globally."

For the cable industry, it could set off a WiMAX explosion as well. Concluded Ayvazian: "Pivot didn’t bring any new value. People didn’t see the value of cell phones coming from cable or a single bill. But WiMAX is entirely different. It’s a way to all content wherever you go, not just a fourth service."

Craig Kuhl is a contributor to Communications Technology. Reach him at [email protected].