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Mobile & Wireless
WiMAX World Europe: WiMAX Goes East
East Europe Hungry for Broadband
by Stephen McClelland
“What’s wrong with the [telecom] picture in the former
Yugoslavia?” questions Vedad Cengic, Project Director of
EnergoInvest. He does not have to ask twice. The countries of
the former Yugoslavia lag in telecom deployment but the
picture is very lop-sided. While mobile has been a great
success in the region with more than 50% penetration,
broadband has fared badly. In several countries, the
penetration is barely 1% and even in more developed
Slovenia it only reaches 9%. Even in major cities it typically
only reaches 20%. Given this, argues Cengic, there is great
potential for a rapid deployment of high-capability wireless
networks. “The first, and ultimate aim is to turn mobile
subscribers into broadband subscribers,” says Cengic.
Across each of the countries that constituted Yugoslavia, there
is an upsurge in broadband interest while several mobile
operators are also seemingly well advanced in plans for 3G
deployment.
The low penetration is a regional feature of east Europe. “You
have a situation of very low penetration of broadband
availability, but no coverage or penetration,” says Simon
Wilder, Managing Director of EACA at Redline, a vendor with
experience of wireless deployments in the region.
But the picture is even more complicated because Wilder
points to a “tremendous backbone fiber deployment” in
several of the countries laid in the past decade alongside rail
track when it was being upgraded in the past decade. “Much
of it remains dark,” says Wilder. “So there is a huge potential
for WiMAX to deliver last mile solutions from the core
network.”
Wilder seems optimistic that various factors are coming
together to make these sorts of emerging markets highly
progressive. “A lot of European Union investment is coming to
these countries for infrastructure upgrade,” he says. He also
concludes that the regulatory environments are becoming
more clear-cut, but says the industry is still lobbying
regulators to see them issue frequencies in TDD operations
rather than FDD ones as the way forward for WiMAX
deployments. “802.16e will effectively be TDD,” says
Wilder. “We have more concerns with regulatory authorities in
eastern Europe issuing licences in FDD than anywhere else,”
he says.
There are examples of prospective and serious WiMAX
deployments everywhere in eastern Europe, especially where
WiFi has already had a successful reception. In the Ukraine,
Yury Chuikov says his company, Alternet, can boast of the
first commercial WiMAX network in the CIS, and one of the
earliest in the EMEA region. It is a 3.5GHz network in
operation with an exclusive national license since November
of 2005. The usage model is a fixed network for the time
being, but Chuikov says the company will launch mobile
services when 802.16e become available.
He says that several operators are “waiting for licenses” to
launch services in the 5GHz band in 3Q this year. “Ukrainian
telecom is one of the least developed and the fastest growing
markets in eastern Europe,” says Chuikov. The Ukraine has
seen a CAGR in data over 62% in the last five years. “We
think the big potential is the SME segment,” he says.
Currently, says Chuikov, with the connection fee at USD 59
and a series of 5 tariff plans, Alternet is seeing an ARPU of
USD 100 per CPE deployed.
And there is the prospect of regional clusters of WiMAX
networks. WiMAX Telecom, for example, started operations in
Austria in October, 2005, and followed with Slovakia and
Croatia in the early winter. The company has selected areas
in terms of coverage for first phase, principally the eastern
part of Austria and the western part of Slovakia. “There will be
a definite boom in broadband in eastern European
countries,” he says. With an aggressive timetable, CTO Peter
Ziegelwanger is promising something in 2006 that is still only
being talked about in most markets: mobile WiMAX in Vienna
and Bratislava.
“Our main focus is residential customers,” says Ziegelwanger,
explaining the banded pricing to appeal to various segments
that, in Austria, are tariffed from Euros 20 to Euros 55 per
month. He says there are four key value propositions for
servicing the traditional segment of fixed broadband
connectivity. One is simple availability, and delivery to regions
still lacking a meaningful broadband service. WiMAX
Telecom is also portraying itself as a “phone in the box”
provider, where WiMAX connection signups will be available in
the supermarket rather then from the incumbent telco. Pricing is
also competitive, saving on the monthly rental from the telco
service, and of course the operators also markets the service
on the basis of providing the consumer with a “a totally new
experience whilst keeping old habits.”
But for outlying areas, subsidy policies are also key features
of the markets, say players, and several central and eastern
European governments have been proactive in enabling a
range of support systems ranging from direct investment
subsidies to support for subscribers. Ziegelwanger says that
30%-40% of capital investments in remote Austrian regions
are government-supported. In Slovakia, the government
supports subscribers with a Euros 4 per month assistance to
their monthly bills, and further capital support from the
European Union is expected.
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