[qi:gigaom_icon_4G] WiMAX, the wireless broadband technology that is vying with Long Term Evolution to become the standard for the next generation of higher-speed wireless networks, draws either delight or derision, depending on whom you ask — its champions or detractors.
When some analyst firm reports that WiMAX is on its way to signing up 70 million subscribers by 2013, we’re ready to believe the technology is finally ready to come into its own. But then another influential analyst firm raises questions about its future . And it doesn’t help when one of its leading proponents, Clearwire (s CLWR), reports a mixed bag of earnings and shows slower-than-expected sign-ups during the second quarter of 2009 — a mere 12,000 subscribers vs. Wall Street’s expectations of between 20,000 and 30,000. And this gives LTE proponents such as Ericsson Chief Technology Officer Hakan Eriksson a perfect opportunity to dismiss WiMAX as not really 4G.
I imagine that, like all hotly contested topics, the reality is somewhere between these two extremes. And that, essentially, was my takeaway from a short, but to-the-point, conversation last week with Dr. Mohammad Shakouri, acting president of the WiMAX Forum, who bristled at Ericsson’s denial of WiMAX as a 4G wireless technology.
“I think that the Ericsson CTO is missing the mark,” Shakouri said. The reason “why WiMAX momentum is scaring them so much is that the business of broadband is not the same as voice, and they are losing monopoly of the cellular voice network business.”
“In reality, there is not standardization of 4G, and the ITU (International Telecommunication Union) is working on the standard,” he said. “The phrase 4G has been loosely used as meaning broadband, wideband and higher capacity. So any technology including WiMAX can be applied to it.” WiMAX promoters always point to the fact that the technology has the ability to provide more wireless bandwidth, especially because there is more spectrum available for it.
While it is hard for people to perceive, in emerging, fast-growing telecom economies such as Brazil, India, Indonesia and Russia, WiMAX is going to be thriving, Shakouri said. When I asked him why it’s taken so long for the technology to get off the ground, he explained that it has taken awhile to get the right spectrum — 2.3GHz, 2.5GHz and 3.5GHz — allocated for WiMAX services across the planet.
The initial WiMAX services are starting to get rolled out in places such as South Korea and Japan. In the United States, Shakouri pointed to Clearwire, which is being backed and promoted by Sprint (s S) and cable companies such as Comcast (s CMCSA) and Time Warner Cable (s TWC).
“WiMAX is less adapted in Western Europe,” he said, explaining why companies like Ericsson are quick to dismiss the technology. “We are seeing great success in terms of spectrum allocation and deployment in developing economies.” In some of the emerging markets, voice-over-WiMAX is being viewed as the killer application, but eventually, WiMAX will be used to deliver multimedia and higher bandwidth.
If you look at the growth in telecom, it’s all coming from emerging markets, and many of the companies, including the incumbents in emerging economies, are betting on WiMAX, Shakouri argued. An option being weighed by telecoms in emerging markets is a combination of WiMAX and GSM. In Russia, for instance, HTC sells a WiMAX phone that has traditional 2G wireless technologies. WiMAX is used exclusively for multimedia and broadband on this device, a strategy that could become popular in other markets.
When it comes to LTE and WiMAX, Eriksson told me, “In the end it will be about the economies of scale,” and just like GSM, LTE will win because it will have those economies of scale. When I asked Shakouri about the economies of scale, he pointed out 40 different vendors that are making WiMAX devices in addition to embedded chips for laptops and other on-the-go gadgets. In Russia, more laptops use WiMAX than 3G. “The progress has been made,” Shakouri said, pointing out that around 2012 or 2013 LTE and WiMAX will be running neck and neck.
Either way, this battle of competing wireless technologies is going to hog our attention for many years to come. As far as I’m concerned, like most consumers, I want something that is fast, affordable and reliable — who cares which flavor of the technology gives me that?
13 thoughts on “WiMAX's Future Is in Emerging Markets”
Interesting observation about wimax. Although I’m still unlearned about the exact technical specifications of wimax, as far as emerging and sub-emerging markets, it will make even less headway then the articles hopes.
Mobile telecom is growing due to commodity hardware with even less than reliable, commoditized services. Price definitely comes before function.
Wimax is going to need a miracle to beat commodity copper laid out haphazardly and cheaply by the telcoms with $10/month ADSL service with a $40 chinese made wifi router. For most, this is “good enough”
The whole point of WiMAX is commoditized hardware . . ! That is the reason Ericsson never wanted to touch it — no way to charge the “carrier grade” premium they are accustomed to with so much competition (including from non-traditional vendors like Cisco and Intel) right out the door.
Good one Om,
I believe both will stay . But LTE is probably stay behind for long time. Folks predicted early on WiMax and burned cash. But now the market is ripe. Folks are ready to buy phones with WiMax ( Thanks to iPhone).
There are WiMax handset available from HTC , NOKIA . LTE compatible handsets are not ready at this point. Hopefully manufacturing these handsets is not a big issue. But overall , WiMax is spreading faster in US cities. Its already available in Baltimore, Vegas, Atlanta. I don’t see LTE being available in next six months for any US city.
So WiMax will live longer life , say 3-5 years , before LTE catches up with it. Then there is this small matter of price war once both are available across the country. You are talking 5 years time for that to happen.
The brain dead analysts have to rewrite their analysis about WiMax for now.
For the technological issues, lets cut to the chase: WiMAX and LTE are very, very similiar. The only difference, for the layman, is the up-channel on LTE supports smaller packet sizes making voice transport easier. the converse, is that WiMAX is better geared towards data with larger packet sizes.
Great article OM!
For the business model though, OM and Skakouri are right about the uncertainty that WiMAX economics creates for the 3G manufacturers. WiMAX is being deployed today in emerging markets has nothing to do with (WiMAX vs LTE or what the US and Western Europe will evolve to), it is all about COST!!! The WiMAX gear is here today and is a fraction of the cost of 3G equipment. So, if you are an operator in an emerging market, lacking 3G infrastructure and you are under public scrutiny, public demand, gov’t mandate, profit motive or whatever to expand your data penetration across your sub base, and most likely you can’t afford 3G economics of basestations, you will deploy WiMAX (150k base station plus $100 MSM chips per handset vs. $40k base station and $30 wimax chip) – It’s all about the $$$s. Remove the emotion and look at the numbers. Most analysts are uncertain if LTE will follow the same WiMAX cost curve (cite IPR concerns, chip costs, etc). However, when you talk to the aircard manufacturers, who negotiate the chipset pricing and IPR, they are saying LTE is following the same cost curve as 3G. One went so far as to cite RevA pricing ($150 all in) – very disappointing, UGHHH! I thought we were beyond that.
My prediction is that we will end up with two worlds of 4G tech – developed world with LTE and some WiMAX and emerging markets with WiMAX. Keep in mind though, the emerging markets are where the outsource trends and labor are occuring, so we should see a healthy, vibrant commerce/trade, and thus WiMAX will not disappear anytime soon.
Lastly, Clearwire, albeit facing some hurdles, is in a good position due to its spectrum holdings. 2.5GHz is in SERVICE TODAY or is licensed to be in service in Europe and ROW (rest or world) tomorrow. This is very key for global adoption, global coverage and roaming. It is much easier to change the encoding mechanism in a device (WiMAX to LTE and vise versa) than to change the frequency – tomorrow’s platforms for encoding are flexible. Frequency requires new physical filters and antennas – adding to an already crowded bill of materials (i.e. raising the cost of the device, subsidy, etc). Making 700 Mhz a global frequency will be much harder to accomplish as 2.5GHz has been around for some time now.
Attention should also be paid to North American Smart Grid build outs. As standardization and security become mora and more imperative, more utilites will deploy private WiMax networks. Smart Grid, Smart Meters, and now Smart Radios.
I won’t purchase a “smartphone” until WIMAX or equivalent gets here. I can live with WIFI until then.
No kidding, what’s taking so long? It’s not like the technology is new, my Ricochet modem back in 2000 worked flawlessly.
I’d like to read more about mobile-WIMAX vs. non-mobile-WIMAX. Any good articles? Most of us want mobile-WIMAX, but when I look up companies offering WIMAX here in Texas they only offer fixed point-to-point solutions.
There are are lot of doubts about Wimax that it will failed to compete with GSM based LTE 4G.Many experts pointed out that GSM based LTE 4G will be the future of Telecommunications.