OECD had recently released a report on WiMAX and its impact on competition and regulation. You can download the PDF from OECD website if you are interested in it. I have not spent studying the report, and have skimmed it. It seems to be a comprehensive […]

OECD had recently released a report on WiMAX and its impact on competition and regulation. You can download the PDF from OECD website if you are interested in it. I have not spent studying the report, and have skimmed it. It seems to be a comprehensive in looking at issues such as spectrum allocation, and compares national policies. Some countries have issued licenses, and some have not. What I found most interesting was that WiMAX despite the hype is more about connectivity, and less about a panacea for higher speeds.

The report points out that a typical base-station, can handle an area between 3-to-10 kilometers in a non-line of sight environment. Or about 40 Mbit/s per channel, which basically boils down to this: one cell could theoretically allow hundreds of business connections at 1.5 Mbit/s and thousands of residential connections at 256 kbit/s. It is easier to see why I have always believed that this is a long haul technology, which can then work in tandem with WiFi meshes, for local connectivity.

That makes perfect sense in the near to medium term, because it will take a few years for the gear to become cheaper, and technology to become capable of delivering more capacity, and speeds. According to some estimates, the current subscriber equipment costs about $300, about two times (roughly speaking) the price of WiFi, cable and DSL customer premise equipment. In-Stat, estimates that it would take a total of $3 billion to set-up a national WiMAX network in the US. That is a huge chunk of change. (Which explains why smaller countries are proving to be early adopters.)

The report also looks at the potential impact of WiMAX on the new GSM/Wi-Fi phones. The biggest concern, apparently is how those who are building the WiMAX networks will treat standalone VoIP providers. Remember Clearwire had given Vonage the heave-ho from its network.

  1. Your thinking is sooo incumbent. To paraphrase DEC’s Olsen, you cannot imagine why any consumer would need more than 256K? If I could get 10 MB up/down, I would cancel my DISH Network!

  2. Add wireless fiber solutions like GigaBeam to the WiMax and mesh solutions too make a network (or collection of networks) 99.9% wireless and you’re dead on.

    On WiMax, how can we expect those that have already invested in Wi-Fi equipment to run out and change to WiMax? It just isn’t going to happen. I know bunches of people that have sworn never to upgrade their old analog televisions (which represents a huge chunk of America), so how can we expect those same people to keep changing wireless technologies? Those same people still have cell phones that are just cell phones, not the converged devices people like you and I use. I don’t think people are really that dependent on the wireless to necessitate the upgrade so WiMax won’t explode like Wi-Fi has.

  3. whenwego… i don’t understand how you say that my thinking is so incumbent. perhaps, you might want to read the piece again. :-)

    the problem i am pointing out is that, the technology at best can do 256 kbps. unless it increases in speed and reliablity, it is hard to compete against the incumbents.

    10 mb/s up and down is good, except it cannot do video very well. much more bandwidth is needed in order to do that.

  4. Terry,

    you sum it up nicely.

    I think despite all the Intel dollars, it is impossible to make people switch to newer stuff. it will happen in time, but not as fast as most are expecting.

    a typical gestation period of any wireless technology is seven years – from standards approval to widespread adoption. Many have forgotten that Apple started pushing wifi back in the late 1990s, and only now does everyone think about setting up-wifi network.

  5. I Love Blogs Conversations

    One of the reasons that I love certain blogs is the smart comments on them. Today Om Malik reported about WiMax capabilities and cost. The report painted rather pessimistic picture on the future of WiMax: The report points out that a typical base-…

  6. Om,

    40 Mb/s per channel is if you have 15-20 MHz channels. In the US, the available licensed channels are 5 MHz (WCS band) or 6 MHz (BRS/EBS band), which means a realistic data rate (for user payload) of about 13-16 Mb/s, depending on range. Upstream and downstream combined. Shared.

  7. WiMax proponents spread mis-information about the capabilities of wireless. They give a whole list of capabilities 40Mbps (some claims 70Mbps), Non-line of sige, unlicensed, licensed, 10 kilometers or more range.

    The thing is you can get maybe two of those combinations, but they make it sound like you can get all of those features in any WiMax.

    The reality is that if you use unlicensed WiMax it will have an insignificant better link budget over 802.11a WiFi (they use the same portion of the spectrum, same maximum power output and have the same physical propagation characteristics). So if you have ever used 802.11a you know how short a range you can do with that.

    There is a very limited amount of licensed spectrum for WiMax (2.5Ghz) in the US. That spectrum is primarily owned by 3 players already. There can never be the manufacturing scale of CPE or Basestations for licensed tech as there is for unlicensed tech. So licensed WiMax will always be significantly more than WiFi.

    Related to the scale of the market for WiMax vs Wifi, is the fact that so many people all over the world are developing new tech and capabilities around WiFi vs. WiMax, so WiFi is evolving dramatically faster than WiMax.

    So WiMax is to WiFi as all the failed competitors (Token Ring, 802.12, ATM) were to Ethernet. WiFi is recapitulating the evolution of Ethernet. WiMax is following in the footsteps of ATM…

  8. Dennis Evans Sunday, March 12, 2006

    Having been involved with 2.1 and 2.5Ghz systems since the early 80′s in Metro and treed burbs in US, it is one thing to deal with a 300-1000 ft distances and quite another to extend out a few miles. The single tree attenuation can range from 8db -16 db depending on variety and moisture in the leaves; the forest can be 40 db.

    Multipath and ducting caused by humidity layers and passing thru boundaries rear their ugly head beyond 3 miles in humid costal and desert climates.

    Just as early Wireless Cable [2.5 GHz] business plans failed for disregarding non line of site issues. [Granted there were other reasons].
    The In-Stat estimate of $3 Billion could be off by a factor of 3 if ubiquity for 90% of the population is really achieved.

    By being selective [redlining] you probably could illuminate 20% of US [in cities] for $3 Billion…that’s $130 per potential or $1,300 CAPEX, if only 10% of those illuminated signed up. Many will chose more bundled expensive cell data plans.

    We should know which is correct in a year or so.

    The problem with unlicensed spectrum is you have no way to shut off/reduce power of not on network sources [existing and future home wireless overlay networks fed from DSL/Cable].

    Metro WiFi could get a bad name fast.

    1. Looking back at the comments four years later – Dennis Evans is freaking brilliant.

  9. Some people are only going to remember that you said WiMax was for backhaul, Om. I read the bit about waiting for the device equipment to come down in price, but I suspect you will be misquoted in the coming months.
    I agree that the bandwidth is not going to be all that was promised, but it never is. WiMax is not so much about the speed, or the backhaul (though that bit is important), but about the (much) larger cell size. Swisscom recently reported that over 70% of their customers use only 3 mobile cells to make calls!
    I’m also having a hard time believing that it would cost $3billion to roll out a WiMax network for that 70%

  10. While it will take a couple years still for CLECs and ILECs to pick up on WiMAX, it will happen.

    I started a ‘wireless ISP’ in 2000 with the entire goal being to circumvent the ILEC/CLEC. I was sick of being hostage to them and seeing other businesses suffering due to their crappy and spotty service.

    The ISP that I started is now approaching 3000 square kilometres in coverage primarily in urban core and city suburbs. The best part – I have no reliance on Telus (ILEC) at all and am the only ISP in SW British Columbia that can lay claim to that statement.

    I am actively acquiring like companies in other cities to expand the terrific model we have built.

    While we only have about 20% of network built on what has been termed ‘pre-WiMAX’ equipment we will be deploying WiMAX gear later this year as it becomes available to us.




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