The fu­ture is WiMax

But the old guard re­main de­fi­ant

Finweek English Edition - - Communication & technology - CHIMWEMWE MWANZA

THOUGH CYN­ICS don’t seem pre­pared to ac­cept the in­evitable, WiMax is fast gain­ing ground as a for­mi­da­ble al­ter­na­tive to con­ven­tional broad­band con­nec­tiv­ity. But whether this long-range wire­less broad­band tech­nol­ogy would help or hurt cur­rent mo­bile net­works is hard to call – at least for now.

How­ever, what seems cer­tain is that in­dus­try ex­ec­u­tives con­cerned about the faster than an­tic­i­pated global adop­tion are clos­ing ranks to scup­per adop­tion.

Voda­fone CE Arun Sarin – ar­guably the in­dus­try’s most in­flu­en­tial fig­ure – has for one not hid­den his dis­like for WiMax. Sarin’s call at the re­cent 3GSM world congress – tac­itly urg­ing the in­dus­try to snub WiMax and in­stead em­brace the long-term evo­lu­tion (LTE), a GSM stan­dard tak­ing 3G tech­nol­ogy into the fu­ture – is the clear­est in­di­ca­tion yet that WiMax is shak­ing up the in­dus­try.

Says Sarin: “Al­though WiMax may well be a com­mer­cial re­al­ity in some mar­kets, it’s far from be­ing ‘prime time’. The in­dus­try as a whole should work faster with its plans for LTE.”

Craig Ehrlich, chair­man of the GSM As­so­ci­a­tion (the body rep­re­sent­ing the in­dus- try’s in­ter­ests) echoed Sarin’s view. “De­spite the hype around WiMax, it’s not that great a tech­nol­ogy. I’d ac­cept if you per­haps said that of CDMA tech­nol­ogy (CDMA is the acro­nym for code di­vi­sion mul­ti­ple ac­cess, the tech­nol­ogy un­der­pin­ning 3G).

“Be­sides, hand­sets that con­form to WiMax aren’t in abun­dance. We (the as­so­ci­a­tion) don’t have an of­fi­cial po­si­tion on WiMax. Our mem­bers are free to adopt it if they like.”

How­ever, the po­si­tion taken by pro­tag­o­nists such as Huawei, Mo­torola, Nokia and In­tel is in stark con­trast to that of Sarin and Ehrlich. The grow­ing num­ber of tele­coms start-ups – no­tably those in emerg­ing mar­kets – in­vest­ing in multi- bil­lion- dol­lar WiMax net­works is an­other in­di­ca­tion that op­er­a­tors are in­creas­ingly lean­ing to­wards the tech­nol­ogy.

“On be­ing granted li­cences, start-ups – es­pe­cially those in emerg­ing mar­kets – are faced with daunt­ing dead­lines by when they should have de­ployed their net­work and be­come op­er­a­tional. The cost and ease with which op­er­a­tors are able to de­ploy WiMax is the ma­jor draw­card. You don’t ex­pect them to start dig­ging the ground to lay ca­bles, which in some cases are van­dalised within days,” says Andy McKin­non, re­spon­si­ble for Mo­torola’s WiMax busi­ness de­vel­op­ment in Europe, Mid­dle East and Africa.

Wa­teen Tele­com, set to launch fixed­wire­less ser­vices in Pak­istan, has just con­cluded what in­dus­try in­sid­ers say is the big­gest WiMax net­work roll­out to date cov­er­ing more than 17 ma­jor cities in Pak­istan, in­clud­ing, Islamabad, Karachi and La­hore.

“I can’t imag­ine how long it would take us to lay fi­bre in a coun­try that has close to 170m in­hab­i­tants and has a poor fixed line pen­e­tra­tion,” Tariq Ma­lik, CE of Wa­teen Tele­coms, told a round ta­ble dis­cus­sion on the pe­riph­ery of the 3GSM congress.

Neo­tel, SA’s sec­ond na­tional op­er­a­tor, re­cently awarded Mo­torola a con­tract en­trust­ing the US-based tele­coms group with the task of plan­ning Neo­tel’s WiMax and CDMA net­works. “Emerg­ing mar­kets are pro­vid­ing the re­quired mass adop­tion crit­i­cal to set­ting fu­ture tech­nol­ogy trends,” says Stephano Mat­tiello, Mo­torola’s re­gional sales di­rec­tor in charge of sub-Sa­ha­ran Africa.

The fact that the In­ter­net-en­abling 3G and HSDPA tech­nolo­gies of­fered by panAfrican op­er­a­tors MTN and Vo­da­com are only con­fined to a few se­lected mar­kets is a com­pelling com­mer­cial op­por­tu­nity that WiMax will seek to ex­ploit.

Says Mat­tiello: “What peo­ple need in re­gions such as sub-Sa­ha­ran Africa is ba­sic con­nec­tiv­ity and mo­bil­ity. The ar­gu­ment that there are only a few WiMax-en­abled hand­sets in cir­cu­la­tion can’t hold for long, be­cause hand­set man­u­fac­tur­ers were now tai­lor­ing their new prod­ucts around WiMax.”

Whereas the early ver­sions of WiMax would only work from a fixed po­si­tion – with a re­ceiver mounted on top of a build­ing – Mat­tiello says the latest ver­sion can reach out to smaller de­vices that are in mo­tion, in­clud­ing lap­tops.

Tele­coms an­a­lyst Arthur Gold­stuck adds a dif­fer­ent di­men­sion to the de­bate. “From a purely com­mer­cial view­point, WiMax poses a se­ri­ous threat to the prof­itabil­ity of es­tab­lished op­er­a­tors. They (es­tab­lished op­er­a­tors) are bur­dened with legacy net­works whose cost of up­grad­ing would run into bil­lions of dol­lars.

“Faced with com­pe­ti­tion from new en­trants boast­ing the so-called next gen­er­a­tion net­works, they have no choice but to sti­fle growth of new en­trants.” Gold­stuck adds that in­vestors are keen to pump money into wire­less net­works as op­posed to in­vest­ing in cop­per or fi­bre op­tic net­works.

* Mwanza at­tended the 3GSM congress in Barcelona, Spain, cour­tesy of Mo­torola

Emerg­ing mar­kets are fast em­brac­ing WiMax. Stephano Mat­tiello

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