Shaky foundations of WiMAX

Dov Bar-Gera, WiMAX Telecom CEO, says "technical hold-ups
could delay his commercial launch of mobile WiMAX in Austria, Slovakia and Croatia".

I was under the impression that WiMAX was all ready to steal the march from LTE camp and the standard was much faster and simpler than 3G+ because it doesnt care about backward compatibility.

Earlier blog titled, "Will WiMAX compete with 3G+" did mention the shortcomings of WiMAX compared to 3G+ but this latest article from Telecommunications Magazine gives an interesting insight into the WiMAX world:

Last March, the GSM Association, a lobby group for GSM technology, published the results of a report commissioned from consultancy Arthur D. Little, which purported to shred the business case for mobile WiMAX in markets where 3G is already in service.

Ericsson, a confirmed WiMAX opponent, is equally dismissive. Mikael Halén, director of government and industry relations for the Swedish vendor, reckons HSPA, a high-speed version of 3G, will have 20 times as many subscribers as mobile WiMAX by 2011 (600 million vs. 30 million).

Australia’s incumbent operator Telstra has also snubbed WiMAX in recent weeks. In July—still smarting from the Australian government’s decision to award a sizable broadband contract to chief rival Optus—Telstra dismissed the capability of the WiMAX technology Optus plans to launch, arguing it is "unproven" and "vastly inferior" to its own HSDPA service.

None of this has deterred some big operators from announcing varying levels of commitment to WiMAX technology over the summer months. In the United States, for example, Sprint Nextel has upped the scale of its investment in a nationwide network to US$5 billion from about $3 billion. And in Europe, UK-based Vodafone has surprised some by joining the WiMAX Forum, the main lobby group for WiMAX

Led by Ericsson, 3G vendors are trying to encourage 3G operators to include the LTE (long-term evolution) standard in their development plans. Promising speeds to rival those of future WiMAX technology, LTE is being promoted as an evolution of 3G technology and, therefore, a more natural choice than mobile WiMAX for an existing 3G operator.

The trouble is, LTE has not yet been standardized. In the absence of defined technical specifications, its critics have been able to cast doubt on whether it has much in common with 3G at all. They point out it uses a different air interface called OFDMA—which, coincidentally, is also used by WiMAX—and so will not be able to reuse much 3G infrastructure, making it as costly a deployment option as mobile WiMAX. If operators are persuaded by this argument and already see the need to plan for a post-HSPA future, they are unlikely to wait for LTE.

But Ericsson sternly repudiates LTE criticisms. "We will have LTE modules that fit into existing 3G base stations," says Halén, who expected an LTE standard to be released in late September (nothing had been announced when Telecommunications went to press) and commercial deployments to appear in late 2009, just 18 months after Sprint Nextel aims to launch its first mobile WiMAX service. "For an existing 3G operator, it will be far more expensive to roll out WiMAX than LTE," he insists.

3G’s long commercial lead in some markets is the one challenge mobile WiMAX may face. More than 100 operators have launched the relatively immature HSPA in 63 countries. This appears to give 3G a major advantage over mobile WiMAX on economies of scale.

As a result, WiMAX operators may find it hard at launch to compete with 3G on price, especially in markets such as Austria, where intense competition between the country’s 3G providers has driven the monthly price of an HSPA service down to as little as €15 ($20). The challenge is recognized by WiMAX Telecom’s Bar-Gera, who is gunning ultimately for about 400,000 mobile WiMAX customers across Austria, Slovakia and Croatia.

"Unfortunately we will have to adapt to this price level," he says. "It will be difficult, but we will match it."