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Backoffice & OSS
WiMAX World Europe: We Want Spectrum, and Good Prices, and, er, Licenses
What Impediments Are There to WiMAX?
by Stephen McClelland
WiMAX needs to overcome some problems before it sees
substantial growth – and some of these problems are self-
inflicted “The worst problem is that we are being led by
technologists and propeller-heads today,” says Berge
Ayvazian, Chief Strategy Officer of the Yankee Group. “We
need to be led by marketers and entrepreneurs,” he
continues.
Some other problems are becoming manifest. “While the first
certified equipment has arrived, there is a lot of price
competition cut in even before standards,” says Caroline
Gabriel, Research Director of Rethink Research, a market
consultancy. “Real world pricing is all over the place, and the
marketplace not yet stabilized,” says Gabriel.
“Vendors are looking for market share above everything
else,” says Gabriel. “The price curve downwards is looking
quite healthy,” she says. “WiMAX knows it has to be a cost-
effective technology because the market needs more
bandwidth for far less revenue.”
But pricing predictions are difficult, she admits: “We can’t
make generalizations about where cost will go. Some [costs]
will come down to WiFi economics,” she continues. “But
carriers have far more complicated demands, and there are
still aspects of WiMAX that will make it cost competitive even
in that environment.”
Wait and see
But WiMAX may be on a "wait and see" list for other reasons,
not least because of spectrum and regulatory considerations
around the world. A not-so-hidden fear of the WiMAX
community may well be that regulators – heretofore relatively
supportive of the technology – might become more
intransigent. “If the cost of licenses were to go up, there
would be no business case,” says Swisscom’s Naef.
And there are perennial spectrum considerations. “Intel talks
a lot about having a harmonized spectrum picture globally in
certain spectrum bands, but at the minute that is very far
from true,” says Gabriel. “The 3.5GHz band in Europe is being
allocated very quickly,” she suggests, concluding "the
idea of having a pan-European WiMAX network is doubtful in
the short term.”
Paul Sergeant, Director of Marketing MOTOwi4 at Motorola
agrees. “One of the main impediments is that the market is
fragmented and therefore it’s hard to reach global economies
of scale. We need to see a harmonized set of spectrum as it
affects the total cost.”
Instead, she suggests that much more attractive would be
2.5GHz spectrum but decisions by regulators in Europe would
be absolutely critical, and that band is earmarked with 3G
expansion. Gabriel says that the EU is taking a view that
"there should be more neutrality.” Even so, she points out,
that the outcome is not going to be a simple picture, and
there is even the possibility that the 3G operators for
understandable reasons could potentially buy up the WiMAX
licenses themselves. But the picture is complicated globally.
“There are a number of different markets around the world,
depending where you are,” says Motorola’s Sergeant. “The
markets differ in terms of frequency, and the need for
different services and applications. For
frequency, there is something of a coalition around the use of
3.5 GHz frequency for fixed applications of WiMAX and 2.5
GHz for mobile applications, but there is also 3.3 GHz
available in China and 2.3 GHz in America for fixed
applications. In addition, there is new spectrum to be
allocated at 1.7 GHz and 2.1 GHz. The 3.3 GHz and 3.5 GHz
mobile spectrum is being already being used in other parts of
the world. In summary, the market is very fragmented, so
according to where the service provider is located and what
spectrum is available to them dictates their approach to the
adoption of WiMAX.”
Gabriel says that US is proving to be more open in its
attitudes and spectrum release, while in developing countries
there is “a lot of regulatory chaos but they do understand
they need to open up spectrum.” Key opportunities may
appear in both the Middle East, Africa and Latin
America. “One company bought up all of the WiMAX licenses
in the UK,” says Jim Baker, CEO of Telabria, a UK-based
operator of fixed broadband services in unlicensed spectrum.
Baker says his business has, as a consequence, pushed towards
a leased line substitution. “WiMAX is going to have a tough
time establishing itself in many countries,” predicts Baker who
says 3G operators will not “roll over” to accommodate WiMAX.
Leapfrog everyone
In developing countries fixed access remains the first priority,
and fixed broadband access seems to be a major selling
point for WiMAX. “There is the opportunity to leapfrog more
developed economies in the personal broadband area,” says
Gabriel.
And judging by recent announcements, such as
Pakistan’s
Wateen Telecom new 802.16e network, national networks using WiMAX may be coming on
stream. Even in Australia and Ireland there is a big pent-up
demand and high average user income, says Gabriel that
could strongly influence successful WiMAX takeup.
Back in the developed markets, the new opportunities now
include what appears to be genuine markets in the
enterprise, and small business segments, and wait for it –
backhaul for 3G operators since backhaul overheads because
of leased line charges are now extremely high for cellular
providers, and 802.16e looks a good bet because of its non-
line-of-sight capability that point-to-point microwave does not
have. Enterprise customers may also be looking to reduce
their leased line bills through WiMAX takeup. Caroline Gabriel
quotes figures from AT&T that in the US 95% of
enterprise backhaul requirements could be met by WiMAX.
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