WiMax: Town & Country

The latest report from Light Reading's research division, Heavy Reading, shows that wired operators are very interested in using WiMax to deliver fixed and mobile broadband services but finds that the nascent wireless technology is liable to be a country mouse rather than a city kitty.

WiMax boosters like to talk up the myriad fixed and mobile wireless applications that the technology will be used for -- when officially certified products start to hit the market -- probably in the second half of 2005.

But Heavy Reading's "WiMax Reality Check" finds that larger operators hoping to use technology to extend the coverage of cable and DSL services in urban areas may find it easier to stick with the devil they know rather than leap into the wireless unknown.

In the city, DSL and cable will prove to be extremely competitive on performance and price.

"DSL is continually improving in terms of both bandwidth and in coverage distance from the central office," the report states. "That raises the question: Assuming that commercial WiMax gear debuts in the second half of 2005, will DSL technology have improved to the point that many of the shortcomings WiMax is supposed to address no longer exist?"

And beyond DSL, a huge expansion in fiber connectivity is looming. "There's going to be an increasing number of subscribers who have access to fiber to the home," opines Shaun McFall, VP of field marketing at Stratex Networks, in the report. "When that's done, the game is over for WiMax."

And even on price it is hard to see how WiMax operators will compete with established wired networks. Estimates for the initial cost of WiMax basestations range between $10,000 and $20,000. Meanwhile, CPE boxes could cost anything between $750 to $250, according to vendors quoted in the report.

"Growth in WiMax equipment volumes will drive down the cost of network infrastructure and CPE, and the speed at which it can reach levels that are competitive with DSL and cable will determine how quickly and widely it's adopted," the report notes. "Price competition in the broadband arena is already fierce, so it's rather difficult to see how one could swoop in with an offer that would convince a broadband provider to adopt WiMax rather than upgrading its cable or DSL infrastructure."

And wired broadband operators are already offering services priced around $30 a month -- or under.

"We don't foresee in the near term offering service for $30 a month," says Philip Urso, founder and CEO of TowerStream Corp. in the report. "It's not profitable for us or for anyone."

But in rural areas the story is reversed: Broadband infrastructure is nowhere near as established, and WiMax starts to look like a much more attractive proposition.

"This market condition provides the most fertile ground for WiMax," writes Tim Kridel, the report's author. "In the rural area of a developed country, for example, the only option for Internet access might be dial-up – possibly via a long-distance call... We believe that this strategy is sound."

— Dan Jones, Site Editor, Unstrung

nevtxjustin 12/5/2012 | 3:11:49 AM
re: WiMax: Town & Country I find it hard to understand why anyone would deploy WiFi or WiMax in an urban area that is well serverd by DSL or cable. The rural market has potential for wireless, but it is very competitive.

My cost for a CPE is only $59 and that includes a firewall and router . Until WiMax providers can met that price, I don't see any competition.
amit.siwal 12/5/2012 | 3:11:44 AM
re: WiMax: Town & Country Well it's a debatable topic and i'm sure this text box won't allow to accommodate all the points.....However to shed some light ...price of DSL CPE's is even lower than 60$now ...In a recent tender in INDIA ....a stripped down CPE i.e.with one Ethernet and one USB port was qouted at 15$ .... Digest that:P
[email protected] 12/5/2012 | 3:11:13 AM
re: WiMax: Town & Country The 2 biggest owners of licensed frequencies in the US are Sprint and Nextel. When Wimax is proven, and cost structures come down, and QOS is in place for VOIP, they will use Wimax as a telco bypass, to provide residential (and Business) voice and internet service.

It makes too much sense for them not to. The biggest cost to carriers is access. If they don't have to pay half of everything they get to the Bells, they make more money. They can deploy easier and quicker. They already have the infrastructure (towers and such) to provide coverage in metropolitian and most suburban and even many rural areas.

This will be the real tipping point for Wimax, at least in the U.S., what Sprint/Nextel do.
freetoair 12/5/2012 | 1:08:41 AM
re: WiMax: Town & Country Anyone who has watched the "proprietary" BWA vendors flounder around the markets (amonst the many dozens of trials) knows that deploying in urban areas is a non-starter. No predicatability of service is a good start from a customer standpoint. (uh try it...if it does not work...no charge.) :(

I like to see a vendor deliver a basestation for between $10,000-$20,000? Who the hell can hit anywhere near that today and make any money? And a WiMAX chipset is suppose to change basestation costs dramtically? Someone is high.

If vendors can get a CPE in at $200 cost initially and dropping - forget it. Non-starter in most all markets.

So that leaves lightly populated areas that no one else is serving (where high prices can be charged) or upstart SPs trying to make the best of it...well McCaw/Clearwire will be a good benchmark and Unwired (AUS).
Ganges 12/5/2012 | 1:08:00 AM
re: WiMax: Town & Country Yes, you are absolutely right. WiMax is making lot of noise in the industry still it hasn't prove anything solid even the techinical feasibility. Second, pricing is another killer for the technology. I have good acquatain on the BWA market using 802.11 tweaked technology which is working good with all the given limitations. It would be better to focus on this technology to make it more useful until 802.16 settles on its own and prove its promises.
I would better like to bet on 802.11n rather than 802.16 right away.
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