WiMAX World EMEA: Neglected bands and familiar models drive WiMAX growth

Aperto focuses on WiMAX for tier 2 and tier 3 operators

One example is China, where the mainstream mobile broadband carriers will inevitably support the TDD implementation of LTE, which is largely Chinese-developed. There is some uptake of WiMAX for fixed applications, however, and China is now demanding a technology for its 1.8GHz spectrum. Manish Gupta, head of marketing at Aperto, explains that his company will avoid head-on competition with tier one vendors by focusing on tier 2 and tier 3 operators; by producing low cost, low power base stations suited to the economics of developing markets; and by supporting as many bands as possible, some of them uniquely in the market. Aperto sees 5.8GHz--a band that was largely sidelined in the 802.16e world by the rush toward 2.5GHz and full mobility--as a strong opportunity that could become a more than $50 million business for the vendor. Aperto also faces limited competition in the band (although, others--like Airspan--also play here). Its 16e kit will go into trials next month, initially in the standard WiMAX Forum profiles (2.3GHz, 2.5GHz and 3.5GHz) but later in 3.6GHz, 3.8GHz, 2.7GHz and others. "We'll pick off those unusual bands," said Gupta.

Telsima aids WiMAX operators not fixated on interoperability

Non-standard bands generate higher margins in a market where this is the best spectrum available to operators, but there is a limited choice of vendor. And in the largely fixed/nomadic world of emerging markets, there is no short-term need to consider wide area mobility. Therefore, there is less importance attached to interoperability--beyond perhaps a few vendors--or certification. Telsima is another company highly focused on the less global WiMAX bands, and on business models that do not require global roaming and interoperability. Telsima's chief marketing officer Wolfgang Mack points out that one of the largest markets for Telsima, and WiMAX in general, is India, which wants cost effective equipment for its own band plan far more than it wants Forum certification. At the Munich event Telsima also introduced an issue close to the hearts of many carriers, whatever their technology--optimizing ROI by using multiple bands. Telsima's customer Mobitel, which is part of Slovenia Telekom, is using a combination of 450MHz (another "unofficial" WiMAX band) for its coverage and cost effectiveness in sparsely populated areas, and 3.5GHz for capacity and low interference in urban or high demand areas (it also operates HSPA). These companies believe that the WiMAX community needs to take a more flexible approach to supporting a wide range of frequencies and to learn the lesson of GSM/UMTS, which flourished once multiband devices were commonplace.

Despite Clearwire, WiMAX follows traditional broadband wireless model

All these factors help explain why, despite the impact of Sprint/Clearwire, WiMAX's natural home remains, in many areas, in the traditional broadband wireless models. These have been all about DSL alternatives expanding, partly under the influence of Wi-Fi, into nomadic or hotzone access. Classic build-out patterns in BWA have been step-by-step, with networks initially constructed to support a well targeted user base that is high value, because of its ability to pay (businesses, power consumers, expats) and its lack of access to other broadband services. In a market with very little infrastructure, like some sub-Saharan African nations, the model can be extended massively because the populations are not only underserved by DSL and fiber but by telephone lines. This means that the GSM device is the primary unit of communication, and the wireless network--once even basic data services can be overlaid on that GSM system--is the natural basis for internet access.

Alcatel-Lucent's model for cash-flow positive 802.16e

Even some of the tier 1 vendors--at least those that are not involved in the new Clearwire--are playing down the need to address large cellcos and telcos in mature markets. Alcatel-Lucent's head of WiMAX Karim el Naggar presented a detailed model for achieving positive cash flow from 802.16e, which was all about staged deployments, targeting businesses and affluent hotzones first before moving to anything close to wide area services. Even in the developed markets of Western Europe, this "hotzone" approach, preferably combined with inter-operator roaming and dual-mode hand-off to mobile networks, can find WiMAX a strong niche among the LTE roll-outs. This is especially true because LTE itself will be mainly built out in hotzones, not as yet another ubiquitous wide area network--and so for operators without a firm commitment to GSM, there will be an opportunity to leapfrog LTE, either in the TDD portion of the 2.5GHz licenses, or in 3.5GHz. Most of the operators attempting this in Western Europe, such as the UK's Freedom4, are following the classic model, addressing high value, geographically limited user bases such as business parks; focusing on differentiated data services--not voice or unfettered internet access; and often maximizing the return on their network investment by wholesaling (a model that could well be supported on a grander scale if British Telecom secures a 2.6GHz license in the UK auctions later this year).

Of course, Eastern Europe has always been a more important land of opportunity for WiMAX in this region, though again, the pattern of deployment has been about DSL substitutes and business services more than true mobility. The wholesale model is particularly important in Russia, with its huge sparsely populated rural areas; the vast country is starting to attract serious western operators and financing as well as local interest. One of the most established Russian WiMAX players, Enforta, is Dutch-backed; Orange is using WiMAX build-outs and partnerships to drive its expansion in the country; and this week Virgin announced the formation of a company, called Trivon that will operate under the Virgin Connect broadband brand, which will spend a reported $4 billion on WiMAX in Russia, initially targeting 32 cities.

WiMAX business still more broadband than mobile

The new Clearwire may have put WiMAX back on the tier 1 mobile operator map, along with KDDI in Japan and KT in Korea, but undoubtedly, in the short to medium term, the real business is more broadband than mobile. The best hope of attaining the status of a mainstream global mobile technology, with all the power and revenues that entails, is in the next decade, when operators in developing territories like southern Africa or India, which have used WiMAX as their primary data network, start to move towards "4G" and the convergence of mobile and broadband (with, in many cases, not much 3G or LTE in sight to steal the thunder). Of course, by this stage, WiMAX will have moved to "true 4G" in the shape of the 802.16m next generation standard, and may even have unified with LTE as many operators are demanding. While there is every logic to using 802.16e/m technology as the basis of the TDD portion of LTE (or any future 3GPP standard), this is unlikely to happen until the next generation, for all kinds of political reasons, not least the desire of Ericsson and China to adopt the Chinese TDD LTE platform. Even it there is unification, this will be for 3GPP mobile standards, and Mobile WiMAX will remain an important technology in its own right in the fixed/nomadic/BWA sectors, whichever standards body governs it. And in the short term, it is the vendors and products that are focused on those traditional broadband models, and on emerging markets, that are seeing growth and decent margins. By contrast, despite Clearwire, the portion of the WiMAX community that is mainly focused on large mobile networks not only has the spectre of LTE to deal with, but immediate problems like the continuing wait for the second wave of certification. Sprint/Clearwire has been demanding a "mini-certification" that will enable a wider ecosystem of devices to be quickly kitemarked in order to stimulate the market, but most WiMAX vendors believe this would be meaningless to operators. This seems another example of how parts of the WiMAX community fatally underestimated the complexity, cost and difficulty of a credible certification process in the wide area mobile market, as opposed to the relative simplicity of the Wi-Fi/PC/nomadic technologies.

The attempt to apply PC economics and norms to mobile markets has undoubtedly been an important catalyst for a change in the cellular world, and a shift towards more open standards and lower cost bases. However, it has also missed some of the real requirements of the mobile market, and at least for the time being, WiMAX will shine more brightly by concentrating on the "broadband" rather than the fully "mobile" aspect of the mobile broadband equation--and on the markets where broadband need is urgent, but the mobile aspect will mean no more than GSM/EDGE for many years to come.