| |
The WiMax Revolution:
How to Live Up to Expectations
By
François Rabasse,
June 2007
The
telecom business has always been known for its sweeping
changes, many of them driven by technology. However,
not all of the innovations have been successful: some
turn out to be "good ideas," or at times "wrong
good ideas" or at other times "good ideas that have
come too soon." For example, whatever happened to the
VSAT, Mobitex (Mobipac), and LMDS "revolutions"?
My
view is that in the telecom industry, there is no such
thing as "good" or "bad" technology, but that it is
all a matter of having the right "window of opportunity"
followed by services having the ability to "find their
market" in that window.
WiMax
and all the buzz it is generating right now brings some
questions to mind. Hardly a week goes by without a new
sales pitch, market analyst pronouncement, the granting
of licenses, or a press release by a Service Provider.
The prophets of doom and gloom are predicting a fiasco
on the par with that of LMDS (Local Multipoint Distribution
Services), others predict instant cannibalization of
3G market share. In contrast, the visionaries see it
as an exciting new "disruptive" services offer that
will miraculously unveil and generate new usages and
a potential perfect match with the 3G model.
What
about the main factors that determine a technology window?
WiMax
has won over a large portion of the industry, in particular
because of the far-reaching effect of Intel's commitment.
And because some network equipment manufacturers saw
a chance to revive their flagging fortunes in wireless
broadband. As a result, most manufacturers now have
WiMax product line, either internally or as an OEM.
Industry leaders, including Motorola, Alcatel Lucent,
Nortel, Huawei, ZTE, Nokia and Samsung, are now running
alongside pioneers such as Alvarion.
Frequency
band attribution:
We could have done better.
Because
it is partially reserved for future UMTS extension,
the 2.3-2.5GHZ frequencies introduced in the U.S. has
not met with the same success on the (Western) European
front. The granting of licenses in the 3.4-3.5 GHz frequency
range curbs the technology's popularity since it increases
the complexity and cost of supporting roaming.
Licenses
have been granted at a reasonable cost.
The
cost of licenses for WiMax operators are no where near
that of UMTS licenses in Western Europe . The research
and analysis firm Maravedis reports an average price
of 1.24 M€ for each WiMax license compared to
836 M€ for UMTS. Even if we aren't comparing the
same thing, the most aggressive WiMax contenders (operators
such as Bolloré in France and Clearwise in Germany
, for example) have concluded their "Beauty contest"
to the tune of "only" a couple of dozen million Euros.
Terminals
have to be ready
Usage
growth depends largely on the widespread availability
of terminals and access equipment (CPE). Intel's development
of a component integrating WiMax protocols (802.16d
and MIMO, 802.16e announced) in its basic chip is key
and will open the door for the integration of WiMax
technology in a wide variety of end-devices (consoles,
walkmans, camcorders).
The
availability of indoor CPEs and the probable equipping
of mid-range PCs will provide WiMax with most of its
end-devices by the end of 2007. Wider adoption will
come when it is deployed on general public devices.
Asian industrial production and optimization capabilities
will then be on the critical path.
What
services will WiMax be used for?
As
an alternative to DSL and cable in low-density zones,
WiMax plans to find a "window in the window" with fixed
broadband access services, at the very least Dual Play.
The economic balance will depend on wide adoption by
ISP reseller partners and the pertinence of the deployment
plan, but the offer will continue to be threatened by
the incumbent operators' power to counter-attack and
their ability to speed up local loop unbundling, thus
increasing the attractiveness of DSL for ISPs.
Metropolitan
/ Wide Area Networks are certainly a more viable long-term
niche. City MAN, and hard-to-cover campus and territory
networks have made WiMax their number one technology.
Many new Players on the scene are practicing by providing
services on these types of networks: city councils,
regions.
But
if the battle is to effectively take place over fixed
broadband, WiMax's real place will be in "Personal Broadband"
service offers, in other words, the ability to offer
the mobile population high-speed fixed connections in
business zones, along with lower-speed mobile connections
(telephony included) between these Broadband Access
"oases." The speed at which these offers reach maturity
will have a direct bearing on WiMax operator results.
That
leaves us with the matter of voice, no longer a technical
issue, but one that highlights nonetheless the difficulty
of establishing the boundaries for mobile services between
mobile operators and WiMax pure players .
In
conclusion, what advice would you give WiMax operators?
Take
advantage of the window wisely. First of all because
the window is open and secondly because the market may
very rapidly reach maturity. At the same time be sure
to include a low-estimate ARPU and OPEX in the balance
sheet. I suggest this because of the wholesale distribution
system and the crushing effect of DSL on WiMax offers.
Invest
significantly in the quality of service and customer
relationships. WiMax technology is eagerly awaited by
consumers because it has raised great hopes and involved
a long gestation period. In addition, since WiMax operators
will be competing with fixed Broadband Access offers
from DSL ISPs whose customer support hot lines leave
much to be desired in the way of care and efficiency,
they should be highly attentive to customer service.
A
final consideration to be taken into account is that
system integration is key. This is true for the following
reasons. System integration deployment is a critical
path in a WiMax launch program: first of all because
time is compressed (the deployment of a first phase
of the network is the fastest) but also because one
must keep in mind that information systems become far
more structurally sophisticated: Inventory Management
is a significant piece, also complex is the level of
integration required for processing flows of eligibility
requests from the different B2C, wholesale, even 3rd
party/content provider models that are managed by the
Business Support System (Billing and catalogue in particular).
All
this requires a well-defined framework and skillful
management, as success depends on 3 main "drivers":
- Doing
it quickly: Draw up a system roadmap that includes
a fast start in providing the basic functions and
processes (Client tracking, Billing, CRM/SFA and Network
Deployment/Field Management).
- Doing
it well: Choose and implement a system that it enables
you to integrate a second generation of offers without
having to embark on a costly and time-consuming system
overhaul or migration project. It's been said more
than once, but let's repeat it again: a structural
change in a system during the development phase of
the activity is a "very risky proposition".
- Fully
integrate the system integration deployment in the
Launch Program. It may complicate the management method
as it requires different practices, but if well-planned
and carried out, it can be a real advantage and factor
of success.
|
|
Highdeal Point of View
Oftentimes
a WiMax service provider will have an existing billing/BSS
system, perhaps from their origins as a B2B operator
or as an ISP. The back-end of this BSS system does not
need to change: invoicing payments and ERP integration
work fine. But frequently the pricing, rating and charging
piece of the legacy BSS is unable to manage the new
convergent services, B2C and reseller business
models and tariff plans that the service provider now
needs to compete in the market. Consequently an add-on
rating and charging system makes great economic sense:
adding flexibility where it is needed without having
to rip and replace the entire BSS system.
Real
flexibility can be a key differentiator in whether or
not the service provider can "find their market" in
the technology window. Many ISP or broadband providers
are deploying new services over WiMax networks as an
alternative to internet dial-up or broadband connection
or as a way to enter developing markets. These providers
are used to offering flat, all-you-can-eat monthly fees
for their services. But WiMax is a shared infrastructure;
if one person is always downloading movies from the
network it means there is less bandwidth for other users.
It does not necessarily make sense to charge both users
the same flat usage fee. Once WiMax can offer complete
mobility, WiMax providers will also be competing directly
with mobile providers who already have developed sophisticated
service packages and bundles targeted to increasingly
niche segments of the subscriber base. WiMax service
providers will need to add-on to or change their legacy
billing systems to ensure that they have the flexibility
to offer competitive multi-tiered pricing models to
differentiate their services from the mobile providers.
As
new services become a viable reality over WiMax, incumbents
and new entrants will need to have the flexibility, reactivity,
and capabilities to rapidly create and refine new offers
while accommodating partner settlement. For WiMax to deliver
on the promise of fixed-mobile convergence these business
challenges will need to be addressed alongside the technical
challenges. Learn
more about the Highdeal solution for next generation
service pricing, rating... |
|
