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2008 – The Year of WiMAX?
by Dr. Mehmet Unsoy, January 2008
I believe WiMAX is a potential game changer, in more ways than one. It introduces new technologies, changes economics, enables new business models and brings in new players. Similar to the situation when Wi-Fi first came onto the scene about 6-7 years ago, WiMAX will be controversial. Will it compete or complement existing mobile infrastructures? How does it differ or what new values does it bring, at what cost, and will it really take off, and if so when?
I believe that the media has paid too much attention to the recent Sprint – Clearwire marriage/divorce/re-marriage(?) to predict the future of WiMAX. There are a lot more important developments like Intel’s various initiatives, Cisco’s acquisition of Navini, manufacturers product roll-outs, and ITU approval of WiMAX as one of the 3G technologies thus enabling the use of 3G spectrum in various countries. In fact, the near-term future of WiMAX may depend more on the deployments and applications in the developing markets around the world, such as the Indian market.
Even for developed markets, Italy held very successful spectrum auctions in early 2008 for WiMAX, Japan completed a similar auction in December, with various incumbent and new players bidding. In the U.S., FCC will be starting the 700 MHz auctions on January 26th. Earlier this month, at the CES show in Las Vegas, Sprint confirmed launch of commercial service in three markets by the end of April this year! At the same show, Intel, Clearwire and Motorola demonstrated mobile WiMAX enabled concept car, driving 50 mph, with apps that have WiMAX and Wi-Fi in tandem.
The implications of the 700 MHz auction by FCC is much wider than the U.S. market. Recent international collaborations extend the availability of 700 MHz as broadband wireless spectrum for Canada, Mexico, several South American countries, as well as major Asian markets such as China, India, Korea and Japan. This will enable more cost effective devices and solutions for whatever technology is chosen to be used for such spectrum.
In order to position WiMAX in both developing and developed markets, we need to understand what it is good for. What apps or what solutions would be best served by WiMAX? Because of its flat and all-IP networking infrastructure, WiMAX could be the answer for Triple and Quad-Play apps in the Fixed Mobile Convergence scenarios. For example, entertainment apps such as TV could be delivered over such WiMAX infrastructures, provided that
it is done efficiently and cost-effectively.
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Highdeal Point of View
To ensure success as both developing and developed markets figure out how to position WiMAX, service providers need the agility and ability to respond quickly to sudden market changes, intense competition, and new technologies. They need to have the flexibility and capability to bill for any service (telephony, music, movies, TV channels,…), for all business models (wholesale, enterprise B2B and retail B2C) and handle the increasing number of financial transactions between different players.
It is almost becoming a rarity to find a next-generation service provider that has just a single simple business model these days. Intense competition forces companies to look very closely at what their core added value is, and many of them find that this value can be packaged and sold in different ways to different types of customers and partners. As business models and company roles become less rigid, the value chain disaggregates and can then be recombined and recomposed to unlock hidden opportunities. The faster service providers can adapt their business processes the better they will be able to compete.
Lowering overall Total Cost of Ownership is another major business priority for WiMAX providers. Lower TCO can be achieved by streamlining processes and using SOA approaches for flexible integration. There are also clear benefits from doing more with less: using a single system to manage multiple parts of the business model from retail billing, to enterprise billing, to wholesale billing to partner settlement. And the solution must be designed for ease of maintenance and ongoing changes. Industry competition is only getting more and more intense and WiMAX service providers need to have the ability to lead the market by making changes to their prices, tariff structures and even revamping their business model on very tight schedules. Changes must be done in hours and days: if it takes you weeks or months to make changes then the competition will take advantage of that mercilessly.
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