Is WiMax Slowing Down

In the past few week it’s becoming quite interesting to know where WiMax is heading and it’s progress if at all there is any. There are so many articles which emerge everyday to say that WiMax has leaped further in terms of development in the technology and commercialization. Although I am too convinced about that but one thing about which am pity sure is that LTE has to seriously push its plans if it has to be in any sort of chance to catch WiMax.

There is no doubt that WiMax, a high-speed wireless service, is gaining momentum worldwide. Latest figures show WiMax equipment sales rose nearly 50 percent in 2007 to US$800 million. WiMAX networks have been deployed in some 80 countries with 2.2 million customers, and growth is expected to continue.

According to the WiMAX Forum, worldwide WiMAX customers will exceed 200 million by 2012, generating US$7.7 billion in equipment sales. With IEEE 802.16 ratified by the ITU last October, many operators see it as a sensible alternative to 3G mobile Internet service.
Although there is a significant divide between the equipment manufacturers when it comes to LTE and WiMax but the later is certainly pushing hard thus making life very difficult for LTE camp. Indian government’s decision of auctioning 2.3, 2.5 GHz frequency bands for broadband data has further encouraged WiMax camp.

So far, most of the excitement has been generated by equipment manufacturers such as Huawei Technologies, a member of the WiMAX Forum. Huawei is moving fast to take advantage of surging demand, mostly in Europe and North America. So far Huawei has sold 16 commercial networks and 30 trial networks, making it one of the most prolific WiMAX vendors in the world.

Huawei also is engaged heavily in WiMAX R&D activity: It has 1,200 engineers dedicated to WiMAX product development; it owns 100 WiMAX- related patents, more than any other company. Huawei is also developing WiMAX terminals which are expected to become available for sale later this year. The handsets reportedly will work in dual-mode with CDMA, GSM and 3G (WCDMA).

ZTE, another Chinese equipment maker and a senior member of the WiMAX Forum, began OFDM research in 1998. It projects sales of WiMAX equipment will reach that of CDMA by 2011 (estimated US$700 million). ZTE is more enthusiastic about WiMAX and it predicts WiMAX will make up 20 percent of the global wireless market by the end of 2009 after commercial handsets become readily available later this year.

When all the manufacturers are getting excited and trying to run as fast as they can operators are mum whether they will jump on the WiMAX bandwagon. Vodafone, T-Mobile and AT&T are yet to announce any significant trials on WiMax. There are no signs of any massive deployment of WiMax especially in China and India which are considered as the biggest WiMax market. China Mobile and China Unicom show no signs of massive deployment or commercial service after small trials two years ago in a half-dozen cities, including Beijing, Shanghai, Wuhan and Shenzhen. Most trials employed 802.16d (fixed access) at 3.5 GHz, a temporary spectrum band for experiment. Most trials used WiMAX as backhaul for businesses to transmit data and video in a campus environment. It is premature to assume large-scale deployment will follow, at least in the immediate future, because the industry is consumed completely by restructuring, which, in addition to changes in organization and personnel.

China Mobile, for example, is carrying the torch of TD-SCDMA, a home- grown, 3G wireless standard which the government hopes to become a winner someday. For China Mobile, TD-SCDMA is very much a political mandate and it has no option but to succeed. If this holds out, it is natural for the operator to adopt some kind of LTE for TD-SCDMA, an evolutionary platform for faster speed and more profitable service.

Questions remain, Operators must weigh WiMax’s potential gains against the cost of deploying regional or national networks, and there is no clear-cut answer. While WiMAX can offer significant speed to fixed and mobile devices which are conducive to more bandwidth-sensitive services like video and TV broadcast, the key hurdle is scale. As tests show, a typical 802.16e base station delivers 30Mbps, but actual speed can whittle down to 1.2Mbps or lower when “fully loaded” with access.

If speed is compromised, cost will become a serious concern. According to estimates, operator capex for WiMAX will be 20 percent to 50 percent higher than for HSDPA, a software-enabled overlay for sending data over 3G networks. At higher frequency, say 3.5 GHz, the number of WiMAX base stations must increase, as many as 50 percent more than for HSDPA, to cover the same area without signal degradation. This is the last thing operators want after already plunking down billions on 3G networks.

So far operators have focused mainly on network and handset performance and not on services which can have a negative effect on initial growth. Despite all the hype, it is not clear if WiMAX will create the miracle equipment vendors want to see especially in China, since there simply is a lack of driving force among the governments, operators and the public. If anything, WiMAX will complement 3G especially in data service for high- end customers, enterprises and government agencies, but its role as a public service will be limited.