Waiting on WiMAX: what will the carriers do?

Now that WiMAX is on carriers’ radar screens, it’s up to the likes of Bell Canada and Rogers Communications Inc. to figure out how to use the technology – no small feat, according to industry observers. "All the carriers are still at the point of figuring out what need it addresses," says Brian Sharwood, a communications sector analyst at the SeaBoard Group in Toronto. WiMAX is a wireless data access technology. Based on the IEEE’s 802.16 standard, it offers data rates near 50 Mbps per channel, give or take 20 megs depending on the person asked. WiMAX gear can send and receive signals to and from places up to 50 kilometres apart – although according to the WiMAX Forum, which watches over WiMAX product interoperability, certified products will reach just three to 10 kilometres. Whatever the number, WiMAX is meant to provide data to computers that don’t move much: it’s not a true "mobile" wireless technology like, say, GPRS, but it is considered "portable" thanks to its metro-sized reach: end users can move around inside a WiMAX service area and get a connection, but they can’t necessarily hop from one service area to another and expect a hook-up. Rogers recently trialed WiMAX, using it to connect a Muskoka ON-area cottage to an Intel Corp. conference in San Francisco. It’s hardly the first example of the technology in action, but it suggests carriers are getting serious about rolling out WiMAX services. As Sharwood notes, service providers might find various uses for WiMAX. It could stand as a backhaul conduit for existing mobile networks. Carriers could, for example, put WiMAX transceivers on cell towers and use the WiMAX gear to transport data from the tower networks to the network cores, translating into cost savings. Some carriers rent wired lines and microwave for that now. If they used WiMAX instead, they would remove the line-rental or the high microwave conversion costs from their ledgers. Or WiMAX could be a way to bring high-speed Internet service to places that lack wired broadband connectivity. That’s the way Rogers seems to be viewing the technology. "It will allow Rogers to offer access in underserved parts of the country," says David Robinson, VP, business implementation at Rogers, in a press statement. Microcell Telecommunications Inc. was working with Allstream Inc. and NR Communications LLC on a broadband extensions based on WiMAX-like technology, under a joint project with Inukshuk. Already operating in a few Canadian communities, Inukshuk, which was acquired by Rogers as part of the Microcell transaction, uses multipoint communications services spectrum in the 2.5 GHz band. "The big question about WiMAX is how competitive it might be," Sharwood says. The technology could eat into carriers’ existing revenues. For instance, although WiMAX isn’t a true mobile service, it does provide a certain level of portability. It has a large footprint, perhaps large enough to entice some people away from the carriers’ wireless data services. WiMAX has another benefit that could hurt the average 3G play: the new technology has a big backer in Intel. According to Sharwood, the ubiquitous chip maker plans to offer 802.16-based chipsets that are easy on the end-user’s pocketbook – a stark contrast to the expensive mobile data gear required for 3G. In time, WiMAX functionality built into laptop computers could be as popular and cheap as Wi-Fi is today, and perhaps something of a threat to 3G. Service providers eyeing WiMAX, therefore, must walk a thin line. "They have to manage the fact that yes, there can be some cannibalization of mobility revenues, but there’s a lot to gain in terms of enhanced applications," says Johanne Lemay, co-president of Lemay-Yates Associates Inc., a telecom consultancy in Montreal. When Wi-Fi first arrived as a genuine product a few years ago, pundits wondered if the 802.11-based wireless service would take away from carriers’ mobile data offerings. But Bell et al. essentially quashed that by embracing Wi-Fi, making it part of their product portfolios, and calling it "complementary" to mobile phone applications. Will the service providers manage a similar coup with WiMAX? Rogers and Bell could not be reached for comment. Telus Mobility’s spokeswoman said her employer has nothing to relay about WiMAX plans just now. All three are members of the WiMAX Forum. Lemay doesn’t put much stock in the notion that WiMAX would play a part behind the scenes. Carriers will use it for network extensions and to provide fat apps to portable clients. "I would be surprised if backhaul became a major application," she says. But she notes a conundrum regarding WiMAX as a remote-area broadband solution: WiMAX uses orthogonal frequency-division multiplexing (OFDM) to get signals to their destinations. OFDM essentially bounces signals off buildings and such; line-of-sight between receivers and transmitters that use OFDM isn’t required. That’s one of WiMAX’s selling points. Non-line-of-sight means carriers can install the technology just about anywhere and provide solid connectivity to end users. But that might not happen in remote locations. OFDM, WiMAX’s non-line-of-sight engine, needs urban infrastructure to send signals along. Rural areas may lack the requisite skyscrapers and light standards, for example, for signal bouncing, so carriers might have to put "line-of-sight" back into the "must have" pile of system specs. This could limit the number of WiMAX networks in remote communities (hills and valleys be damned), and ultimately limit WiMAX’s power as a broadband extender. So much for bridging the digital divide.Nonetheless, WiMAX seems to be rolling out. Lemay notes that equipment providers like Redline Communications Inc., SR Telecom Inc. and Wi-LAN Inc. are starting to push WiMAX products out the door. "The equipment is becoming available. It’s late, but technology usually is."

Waiting on WiMAX: what will the carriers do?

News | 09/08/2005 4:00 am EDT

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