Given all the recent WiMAX announcements, it seems that the communications infrastructure community has convinced the rest of the world to invest in WiMAX technology, whether for fixed or mobile networks.
- In Seoul, South Korea’s top two carriers, SK Telecom Co. Ltd. and KT Corp., recently launched commercial mobile WiBro services, Korea’s Samsung Electronics Co. Ltd.-developed homegrown WiMAX standard. The companies said they plan to roll out WiBro services in other markets early in 2007, and they expect to have services deployed nationwide by sometime in 2008.
A KT representative told the Korean Times that WiBro-compatible end-user devices will be available soon, and that subscribers can access WiBro service on laptops or PDAs outfitted with a PC cards. SK Telecom hasn’t disclosed its pricing yet, but it’s expected to be competitive with KT’s.
Both carriers have already made considerable investments in WiBro-KT said it spent more than $100 million in 2005 and expects its 2006 investment to topple $500 million, while SK Telecom said its WiBro investment will hit somewhere around $833 million by 2011.
Granted, Korea is home to the world’s highest broadband penetration rate; about 25 percent of Korean subscribers are using broadband, according to the Organization for Economic Co-operation and Development, a Paris-based think tank. But still, what happens in Korea tends to carry to other parts of the world eventually.
- In Pakistan, Motorola Inc. scored a nationwide mobile WiMAX equipment supplier and managed services contract in late May with Telecom-Pakistan, a unit of Warid Telecom International. The company said it will provide its 802.16e-based MOTOwi4 WiMAX access network and subscriber units as part of the deployment. Though financial terms of the agreement were not disclosed, Motorola noted it will finance a portion of the purchase.
- In the United States, BellSouth Corp. is preparing to launch fixed WiMAX with the hope of attracting rural, high-speed-Internet-access-deprived customers. The company is expanding service into Melbourne, Fla.; Chattanooga, Tenn.; Greenville, Miss.; Charleston, S.C.; and Albany, Ga.
Set to launch in the new markets during the third quarter, the company said traditional phone lines will not be needed to use its wireless broadband service, which will offer Internet access speeds of 1.5 megabits per second. The system transmits signals between local radio towers and a small non-line-of-sight desktop subscriber modem, utilizing the company’s licensed 2.3 GHz spectrum, BellSouth said.
“With BellSouth Wireless Broadband Service, we can reach even more of our customers with high-speed Internet access,” said Randy Roberts, vice president, Wireless and CPE Management at BellSouth. “One of our primary focuses in these latest deployments has been on our rural customers, some whose only opportunity to experience high-speed Internet is with our wireless broadband service.”
In 2005, BellSouth launched wireless broadband using pre-WiMAX technology in Athens, Ga., and has since offered the service in Palatka and DeLand, Fla.; New Orleans; and Gulfport, Miss. The company said it plans to continue expanding its wireless broadband service to additional cities throughout this year.
But BellSouth also has mobile WiMAX on its mind, as evidenced with its announcement in late June that it would begin lab trials of Alcatel Inc.’s 802.16e-based mobile WiMAX portfolio called Evolium.
BellSouth did not specify when and where it might deploy 802.16e-based WiMAX technology, but Alcatel pointed out that its solution offers carriers a strategic value, supporting fixed, nomadic and mobile usage.
Enterprise sales
Service providers like BellSouth are likely stepping up their WiMAX investments and offerings in part because smaller players, like Airband Communications Inc., which provides fixed-wireless services to businesses, are racking up enterprise clients by offering pre-WiMAX services. Airband recently expanded its network into San Antonio. While San Antonio itself may not be a huge market itself, when combined with the company’s WiMAX business in Austin, Dallas/Fort Worth and Houston, it’s obvious that Airband has latched onto a revenue stream that traditional service providers haven’t yet exploited.
Clearwire moves
And take the case of Craig McCaw’s Clearwire Corp., which provides wireless broadband service in 27 metro areas in 12 states and recently cancelled its planned initial public offering thanks to a combined $900 million investment from Intel Corp. and Motorola Inc.
With that kind of money, Clearwire undoubtedly will build out its network and put 802.16e technology on the mobile wireless broadband service map. For Intel, the ramifications of the deal are clear. For its $600 million investment, Intel gets a vehicle that will drive its flavor of mobile WiMAX into the marketplace, and it gets a guaranteed market share for its WiMAX chips.
Today Clearwire uses a proprietary pre-WiMAX technology provided by subsidiary NextNet Wireless Inc. Clearwire has previously voiced its intent to migrate its network to the WiMAX standard. Having carried the torch for 802.16e’s ratification, Intel seems to have positioned itself with stealth-like precision to reap big-time chip profits from the deployment of mobile WiMAX.
Interestingly, Intel unveiled its new Rosedale 2 WiMAX chip for both fixed and mobile broadband access with not so much as a press release during the Wireless Communications Expo forum event held in late June in Washington, D.C.
The Clearwire deal also provided an avenue for Motorola to secure its place as a leading WiMAX equipment supplier. By investing $300 million in Clearwire’s NextNet business, which makes non-line-of-sight equipment based on OFDM technology, Motorola essentially bought its way into Clearwire’s WiMAX buildout. Originally, Clearwire bought NextNet to control the development of its network infrastructure. Going forward, Clearwire said it plans to use Motorola equipment to build out its broadband wireless network.
Skylight Research summed up Motorola’s interest in NextNet as being spectrum-sensitive and infrastructure-minded. “The deal is mutually beneficial as it gives Motorola an immediate foot in the door with licensed equipment and a customer who has the potential to change the competitive landscape of North American operators.”
All eyes on Sprint Nextel
But for sure, the elephant in the WiMAX waiting room is Sprint Nextel Corp. The company is in the midst of wireless broadband trials and is considering technology from Samsung, Qualcomm Inc.’s Flarion Technologies Inc. and IPWireless Inc. Having said a decision will be made by the end of summer, Intel and Motorola’s investment in Clearwire seems shrewdly calculated and well-timed.
Skylight Research speculated that Motorola may be attempting to crank up the pressure on Sprint Nextel to get off the fence and commit to Motorola’s WiMAX offering for its 2.5 GHz spectrum.
“If Sprint chooses Motorola’s .16e equipment, Clearwire benefits from roaming privileges without interoperability issues (which might be a reason for Sprint to make that selection as well). There are two questions on everyone’s minds. Is this an Intel strategy to provide an insurance policy for WiMAX because Sprint is favoring another mobile technology? Or is this a clever tactic to influence Sprint’s decision toward WiMAX in the interest of nationwide roaming? After all, interoperability, even in the earliest stages of equipment, will not be an issue if one vendor is supplying two large operators owning 2.5 GHz spectrum.”
Qualcomm sniffing for royalties?
The plot thickens as Qualcomm’s interests are considered. Qualcomm has inked royalty-bearing agreements for OFDM and OFDMA technology development with WiMAX equipment-maker SOMA Networks Inc. But Qualcomm’s play for WiMAX royalties should be no surprise to those who remember that when Qualcomm acquired OFDM vendor Flarion, the company said it hoped to earn royalty payments from WiMAX vendors.
Indeed, Qualcomm has previously stated that, “Qualcomm is licensing its OFDM/OFDMA patent portfolio to companies interested in developing, manufacturing and selling OFDM/OFDMA products. Qualcomm believes it has OFDM/OFDMA IP that applies to various OFDM/OFDMA wireless solutions being proposed, including WiMAX.”
The WiMAX Forum has said it expects 802.16e-certified products to ship sometime in 2007. Still unclear is how long Qualcomm will wait before it asks Intel for a royalty payment.
But Adlane Fellah, senior analyst at Maravedis pointed out that Qualcomm’s thirst for royalty checks won’t inhibit WiMAX deployments in the way that lack of spectrum among service providers will.
Sprint Nextel’s decision about WiMAX can’t come soon enough for vendors.
