March 26, 2007 4:00 AM PDT
Wireless industry gears up for WiMax
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But building the network is only one part of the challenge, WiMax will also fundamentally change the business model of wireless service providers.
For one, those who support the technology envision that WiMax chips will be embedded not only in mobile phones but in a plethora of mobile devices, from MP3 players to digital cameras, that won't be marketed or sold by WiMax network operators, even though the devices will work on their networks.
More devices, a bit less control
Analysts say there are pros and cons to this approach.
"It's a double-edged sword," said Charles Golvin, an analyst with Forrester Research. "The operator doesn't have to subsidize the devices, but they are also giving up some control."
And because more devices will be able to access the network, operators such as Sprint will likely have to adapt their subscription models.
Today, people must subscribe to separate services if they have more than one device accessing the cellular network. But in a WiMax world, where someone might own three or four WiMax-compatible devices, separate subscriptions for each of those devices to access the network wouldn't make sense.
John Polivka, spokesman for Sprint, said the company hasn't finalized its subscription model, but he said it will likely offer different tiers of service that would allow people to connect a certain number of devices to the WiMax network for a given price.
"If you have a household where there is a media player, a gaming station, a camera and a phone, and you want wireless broadband access for all of them, you could buy a bundled subscription," he said.
But WiMax operators may also partner with application providers to offer other variations of the service. Golvin suggested that Sprint may partner with a company like Kodak, which would bundle WiMax into its online picture-sharing service. This might allow people to automatically upload their photos over a WiMax network as soon as they're taken.
Even though Sprint's plans and Clearwire's IPO have generated a lot of buzz here in the U.S. for WiMax, The WiMax Forum's Shakouri said he expects WiMax to grow more rapidly outside the U.S. In mature technology markets, such as Japan and South Korea, mobile WiMax is seen as a compliment to existing 3G wireless networks where users are already hungry for the next boost in wireless bandwidth.
In developing markets, such as India, Malaysia or Pakistan, WiMax can help provide fixed broadband services in places where operators are unable to cost-effectively deploy other broadband technologies, because they lack the wired infrastructure.
But in the U.S. market, Shakouri said, WiMax spectrum is limited, and right now Sprint and Clearwire are the only two major carriers with enough of it to support a service. What's more, consumers in the U.S. are just starting to use 3G data networks, and the two largest cellular service providers, AT&T and Verizon Wireless, also happen to be two of the largest broadband providers in the U.S. As a result, there is little incentive for them to offer fixed-address WiMax service as broadband replacement.
"Clearwire and Sprint are very committed to WiMax," Shakouri said. "And we wish there were more carriers in the U.S. interested, but there isn't enough spectrum available right now. That's why I think we'll see deployment happen a lot faster in other parts of the world, especially Asia."
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