Could WiMax rule supreme?

5 Oct 2004

With the growing popularity of new services, such as voice-over internet protocol (VoIP), advocates of a new wireless broadband standard believe the technology in tandem with the growing trend of mobile-only households could savage the business of fixed-line telecoms as users could make cheaper phone calls and enjoy broadband without ever having a phone line installed.

Backers of the technology — known as WiMax — believe it can challenge DSL and cable broadband services because it offers similar, if not better, speeds and costs carriers less to set up. It — known in technology circles as the standard 802.16REVd — can provide wireless broadband access speeds of around 20Mbps over 30-mile distances.

Its advocates are claiming that, once live, the current impasse over DSL will be removed and teleworkers, home owners, gamers and small businesses across the country can enjoy broadband without worrying about wires or distance from the nearest exchange.

“We are looking at a sea change in how communications will be performed in Ireland with the advent of WiMax commercially between 2006 and 2010,” says Paul Doody (pictured), managing director of Irish Broadband.

His company is about to kick off public trials of WiMax in the State as part of a joint development with Intel and wireless tech firm Alvarion.

Doody says: “WiMax will provide Irish consumers with the opportunity to enjoy high-speed data services from anywhere in the country for a fixed price and will play a key role in defining where the telecommunications market is going.”

In recent weeks another wireless broadband provider, Digiweb, revealed plans to construct a WiMax-ready network that will cover 50pc of Ireland by early 2005. The news followed Digiweb’s acceptance into industry body, the WiMax Forum, which includes leading wireless service providers and equipment manufacturers.

Earlier this year Motorola revealed plans to spread its Canopy wireless technology based on WiMax across the rest of Europe based on successful trials of the technology in Ireland in the belief that Canopy can “fill the gaps” left by patchy DSL coverage.

Ireland and Australia — markets with high gross domestic product but low broadband penetration –have been cited as the markets with the most to gain for fixed and mobile network operators that deploy new wireless broadband standards, such as WiMax and competing standard MobileFi, to augment the rollout of DSL and 3G services, according to research by Bear, Stearns & Co International and The Management Consulting Group (TMNG).

“WiMax will impact deployment strategies for 3G, DSL, cable modems as well as traditional backhaul solutions,” said Rich Nespola, CEO of TMNG. “Carriers must adjust strategies now and act quickly to influence the final standard. Technology providers must partner with licenced-spectrum carriers and plan a careful, measured introduction of products and services with maximum functionality.”

The Commission for Communications Regulation recently revealed plans to grant test licences to companies researching and developing technologies such as WiMax, MobileFi and Ultra Wideband.

Despite the wide base of advocates, however, the promise of WiMax is still considered only that — a promise — by sceptics who believe the technology is in danger of hitting the same hype curve that drove €160bn worth of investment in 3G licences across Europe, almost killing the telecoms industry altogether. A report recently published by Parks Associates downplayed its potential, indicating that testing and development of the technology will take a lot of time.

“This standard is exciting news for the industry,” says Michael Cai, senior analyst at Parks Associates. “However, interoperability tests and the certification process both take time, and on average, carriers spend six months trialling new equipment. Therefore, the market is unlikely to see volume commercial deployment until 2006.

“Most of the deployments in the developed world will be in the underserved markets and developing countries with poor wireline network infrastructure will use 802.16REVd for both voice and data,” he says.

Cai’s views were echoed by Campbell Scott, director of innovation with O2 in Ireland, who despite agreeing that it provides a perfect bridge for 3G services and brings mobile operators closer to a fixed-line audience, argues that it will still take time before the technology is truly ready.

“The promise of WiMax and the technology is shaping up. The difficulties are really the timing and delivery as well as the levels of investment by the companies behind it.

“WiMax will certainly be ideal for remote access and will provide perfect backhaul for Wi-Fi, meaning that homes no longer require phone lines. We are currently doing trials on WiMax and similar technologies but it will be a while before such technologies are ready for public consumption.”

Commenting further on the potential for WiMax to appeal to Irish consumers, Scott adds: “Ireland is a very dispersed market and Eircom is struggling to keep up with DSL demand. For these reasons, WiMax certainly could find a perfect home in Ireland.”

By John Kennedy