Can WiMax make it in the U.S.?

(continued from previous page)

Indeed, experts say that the 3G wireless networks carriers around the globe spent billions of dollars building are insufficient to handle a flood of wireless data traffic that could be generated from wireless enabled-consumer electronics products such as gaming devices, digital cameras, iPods, and navigation devices.

"3G was designed for voice," said Philip Solis, an analyst with ABI Research. "Right now a single 3G cell site barely supports a half dozen people transmitting data at the same time. WiMax offers much better capacity, which will be essential when people start using more data-intensive applications over wireless."

Solis predicts that 45 million people in North America will use mobile WiMax in 2012, with 200 million using it worldwide in 2012.

But the true fate of WiMax, at least in the U.S., is most likely in the hands of Wall Street investors.

Sprint has already committed itself to spending $5 billion through 2010 to build its network. The company reiterated its position on Friday. But since the ouster of its CEO Gary Forsee, the company has come under pressure to focus on its core wireless business, which has been steadily losing customers. Some experts speculate that Sprint will spin off its WiMax division, but the uncertainty surrounding the network could slow deployment.

Clearwire also said it's committed to continuing to build its WiMax network, but the company, which reported that its third-quarter net loss widened to $329 million from $60 million a year earlier, may not be able to afford to build the network. In fact, the company admitted that its business plan will require it to "raise substantial additional financing both in the near term and over the next five years or more."

And without enough money backing the deployments, WiMax could easily fade into obscurity as other technologies come of age. WiMax is just one of several technologies based on something called OFDM. Like Wimax, these other technologies--Long Term Evolution (LTE) and Ultra Mobile Broadband (UMB)--also deliver faster speeds and fatter data pipes.

Like WiMax, each technology requires operators to build entirely new networks. To date, WiMax is the only one that has been standardized, which has given it a leg up.

Sprint's announcement a year ago helped cement WiMax's place at the table. The technology got a further boost when large technology companies like Intel and Motorola threw their weight behind it.

While LTE and UMB products aren't expected on the market until at least 2012, Intel will introduce its next generation Centrino chips for laptops that will have WiMax built into them in the second half of 2008. Several laptop makers including Toshiba, Lenovo, and Panasonic, have already agreed to use the new WiMax-enabled chips.

WiMax was further pushed toward legitimacy earlier this year when it was approved by the International Telecommunication Union (ITU) as a 4G radio technology, paving the way for more adoption of the technology throughout the world. And Cisco, the world's largest IP networking company in the world, gave its own nudge of confidence when it announced its purchase of Navini.

"WiMax is a very good technology," said Farpoint's Mathias. "But it's competing with a lot of other technologies. Right now, 3G works fine. And there are a bunch of other 4G technologies that are also coming on the scene. So will WiMax survive? Yes, I believe it will, but its success has never been a slam dunk."

[equisoft]

Technological barrier ?!?

Is there really a technological barrier of are we just seing some propagada designed to protect the communication industry? I think a lot of people would prefer WIMAX not going omni present because it's going to force a lot of changes that could transform the communication mediums and their business models as we know them today.

[USDecliningDollar]

Exactly

I think that you are correct in that the omni-presence of WIMAX would break the existing business models - with this in mind, it is clear to see that we are slaves of the corporations and government.

[bobpanoff]

Not all-or-nothing. There's a place for WiMax

The most successful networks and network business models are typically those that can most flexibly deliver a mix of high value applications, content, and services. Voice is increasingly a commodity, and 3G voice network providers face the prospect of becoming "dumb pipes" with low profits. Certainly, providers in the most mature European markets are already seeing difficulty in replacing declining voice revenues and profits with premium data services on their networks. Service providers need WiMax because it is much better suited for these applications. In addition, WiMax's economics are much better for aggregating rural traffic and bringing broadband connectivity to many under-served regions in the US. The UDS market is big, and certainly not homogenous, requiring a mix of technologies and network designs.

[mikebeg]

Some minor errors in the story

Hi,

there are a few minor errors in the story.

Mobile WiMAX was certified by ITU as a 3G technology (not 4G). Also Mobile WiMAX delivers peak data rates between 30 and 38Mbps (depending on how you configure the TDD asymmetrical properties). This does not qualify Mobile WiMAX as 4G (defined as peak data rates >100 Mbps).

The next evolution of 3G (HSPA) coming in the 2nd half of 2008 will deliver peak data rates of 28Mbps (almost the same as Mobile WiMAX) and after that peak data rates of 42Mbps (faster than Mobile WiMAX) in late 2009.

LTE will arrive in the market late 2009/early 2010 (not 2012) and deliver peak data rates up to 150Mbps.

UMB is a little later than LTE, arriving approx 1 year later.

Mobile WiMAX was always going to have a tough time in the markets where 3G has already been rolled out (except in some niche scenarios) and now it looks like it will have an even tougher time.

/Mike

[rshimizu12]

We should not worry to much over Sprint's fallback

The media is viewing Wimax as being a ISP technology. I believe that Wimax will be adopted by businesses and consumers as well.

I think the media is overreacting to the Sprint's decision to call off it's Wimax alliance with Clearwire

Wimax is new and the so is the supply of new equipment. So this drives up the cost for new buyers of Wimax equipment. Carriers and businesses will adopt Wimax as they begin to realize the benefits and potential profits.

[Quemannn]

Technology shakedown

It takes time until a technology gets attention.
Investors are shrewd enough to wait until a tilting point comes up. Some people like to believe data rate is the only way to measure new wireless technolgies, WiMAX, LTE, or UMB. But there are interoperability and adaptability that will be more missiion critical. Investors always want something visible, and for now, WiMAX does not have its flagship mobile equipment in the marketplace, which keeps wary investors blind to the bright future of mobile WiMAX. Every good investor doesn't have to a visionary but has to be an opportunist.

[samhyatt76]

Woe to WiMax naysayers

If it is a viable technology then why not pursue it. I will tell you why, because nobody wants to give up the already terribly intricate web of hotspots all over the place that users get screwed on. It is very difficult to go anywhere wirelessly. Can you be on the move and find a spot that is available through your carrier? Sure...but WHERE? It is a pain for anyone out in the field to find 'A' solution. You would have to spend, under the current "blanket" and average of $42 to $49 a day using daily log in plans or $60 to $100 a month to subscribe to multiple carrier plans for monthly access. What these companies need to do is regionalize their buy in into WiMax and engage in revenue sharing, but thatt is an impossible dream because nothing is for the greater good of the American people and its businesses anymore it is all about greed and who can be the next billionaire with a moon rocket in his backyard. What happened to the greater good? Just like Barron Hilton deciding to donate what would have been Paris' inheritance to a charitable group...WHY??? If Im that old and I am going to give that much money away ($1.5B) then I would get my butt out on the street and look and see where I could apply it where it would most benefit the people of this country. Anyways I am off-topic...my apologies...

[carlconger]

Re: the article " Can WiMax make it in the U.S.?"
Those of us in rural areas without cable, or outside the distance limitation of DSL have only satellite technology to even come close to high-speed internet service. Has anyone in the WiMax industry bothered to do a market survey of those of us in these areas? I agree that the "big-city" folks have ample choices for their broadband needs, but the rest of us need some help.