A growing number of operators in emerging and developed markets alike have announced plans to develop WiMAX networks, and proponents of the technology, such as Motorola's director of wireless broadband in the region, Noel Kirkaldy, believe the opportunity is immense. "This technology is starting to appeal to everyone and has no longer become just one technology, it has evolved to become a suite of technologies," Kirkaldy states. "We are driving scale with the technology and the offer of wireless broadband is the most important role in the short term," he adds.
On the surface it thus appears that the mobile version of WiMAX, a technology that has arrived six or seven years after the introduction of WCDMA, has the wind beneath its wings and is set for take-off. Ericsson, however, has another view of the technology, and rather than just state the position, the equipment manufacturer went and ceased the development of its own mobile WiMAX solution, believing company resources could be more effectively used elsewhere.
"We do think that WiMAX can be an option for fixed wireless access, but that is a niche application," states Andreas Hessler, Ericsson VP of Networks in the Middle East. "Therefore we have chosen not to develop our own products. But we do have partner products, which are then suited for that kind of fixed wireless application, but they are not well suited for indoor coverage," he adds.
As far as Ericsson is concerned, WiMAX as a standard continues to have a number of technical limitations that make it unsuitable for indoor broadband use. With respect to the fixed version of the technology, Revision D, Hessler says that if one compares the performance of this standard with that of a HSPDA base station today, WiMAX is far behind. "I don't think WiMAX was developed to target the same segment. It was targeted at the fixed wireless segment, and then of course they have improved the standard going from the D version to the E version. They have optimised it a bit more for indoor use, but still we would say that there are several technical drawbacks with the standard," Hessler states.
He identifies that a very high overhead in the standard exists, which he describes as a short cut that results in the wastage of 30% of the spectrum, and is not really optimum. "In WCDMA, the equivalent overhead is less than 1%," Hessler asserts. WiMAX also utilises OFDM technology, which Hessler suggests has been subject to much hype, though issues still remain with respect to its peak average.
"The other disadvantage of WiMAX is that it is not really optimised for voice, it is only optimised for broadband," Hessler states. "And sometimes you hear the WiMAX industry saying that HSPA or WCDMA is not optimised for voice whereas WiMAX is optimised for broadband, which is not entirely true. It is easy to think that by optimising for a narrow band application you lose the broadband capability, which is not really the case."
Hessler goes on to assert that the difference in suitability for voice or broadband comes with respect to the number of channels available. "In WCDMA you can divide this channel into 256 sub-channels because voice is very narrow band, it does not require so much capacity. In WiMAX you can divide it into 32 and that makes a huge difference, as today voice is 90% of the revenues [of telecoms operators] so that makes a WiMAX operator's business case very difficult to make money from," he contends.
Motorola's Kirkaldy remains upbeat with respect to the commercial prospects of mobile WiMAX. "Through the course of this year we expect to see the certification of the 802.16e standard, which is the only WiMAX standard being supported by Motorola," Kirkaldy explains. "The ecosystem for WiMAX is growing and this is our big bet," he adds.
While Motorola is arguably the most vocal equipment supplier pushing the WiMAX cause further, there are other suppliers that are also betting on the impact of WiMAX in developed and developing telecoms markets alike. Resurgent Nortel views the development of a comprehensive ecosystem as being crucial to the uptake of WiMAX.
The vendor is driving an open, multi-vendor MIMO-based ecosystem in collaboration with industry leading chip and device manufacturers such as LGE, Kyocera, ZyXel, Intel, Runcom, Sequans and others.
Nortel is of the opinion that WiMAX customers, ranging from traditional GSM and CDMA operators to new entrants such as cable and satellite players, are interested in a total WiMAX 16e solution from their suppliers, including network infrastructure, services, devices and applications. As such, the supplier is looking to deliver cost effective WiMAX-16e devices such as PCMCIA cards, USB dongles, wireless routers and indoor/outdoor subscriber stations in 2H07, at the same time its WiMAX network infrastructure becomes available.
"Ericsson is perhaps the most prominent vendor that is not supporting WiMAX in a big way as its portfolio is a lot more focused on 3G goods and services and it would not make sense to use 3G technology for the same applications," suggests Milan Sallaba, director and office head of Oliver Wyman, a management consultancy.
"This is in contrast to Motorola, which is the main supporter of WiMAX. Motorola has almost discontinued its 3G research and what we see developing is a situation where vendors are betting on one technology versus the other and not everybody is in the same camp," he adds.
Sallaba believes the issue of whether WiMAX will gain mass-market support or not is based on whether a sufficient number of operators and service providers around the world identify with the technology and help to make it a more economical technology choice.
"I'll use the example of 2G handsets as a prime one. The reason they are so cheap is that there is an abundance of them in the market and the same law of supply and demand is taking place in the 3G arena where handset retail prices are also beginning to drop," Sallaba explains. "The same would be true of WiMAX but if there is very little take up then user experience will not be good as there is very little handover."
Ericsson's Hessler remains damning of WiMAX's ability to become a mass-market technology, able to enjoy the well-entrenched economies of scale present in the GSM and WCDMA worlds. "WiMAX comes about 6-7 years after WCDMA so I think it is difficult to see how it is going to be become a mass market technology. It is not better and it has come six years later," Hessler states.
He draws a comparison with the development of cdma2000 technology, which was well executed as a technology, and was technically sound at that, but which still failed to achieve widespread adoption as a result of the overwhelming presence of GSM and its subsequent incarnations.
Oliver Wyman's Sallaba does draw attention to the fact that around the globe operators are starting to make some investment in WiMAX technology, the most notable of which is Sprint's US$4 billion investment. He forecasts that WiMAX will hold the largest promise for operators in markets where the telecoms infrastructure is relatively immature.
"So the question for operators in such markets is whether or not it would be cheaper to deploy this kind of infrastructure. Some might believe that WiMAX will be preferable to rolling out fixed structures in low penetration markets," Sallaba says. He believes the biggest market potential for WiMAX is in markets where operators can rollout WiMAX networks with greater ease than they could with alternative standards.
"If a network operator is going to make an investment decision now, there is no standardised mobile WiMAX so it is somewhat speculative at present making it difficult to compete in markets where there are mobile operators that can offer services such as mobile roaming," Sallaba suggests.
In the end what appears to be most important to bear in mind with respect to the business case for WiMAX is that much depends on what sort of frequency a player has as well as how much of it they have access to. The regulatory licence requirements that are being allocated in the Middle East, for example, mean that it is not ideal for making the most of the opportunities that WiMAX can offer.
"Primarily in the Middle East the wireless frequency that is being handed out tends to be 3.5GHz as opposed to 2.5GHz, which is what Sprint is working with in the US market," explains Sallaba. "The lower frequencies mean fewer base stations with more reach or higher speeds meaning lower rates of investment, in terms of equipment, are required which would make the business case for WiMAX more attractive."For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.