WiMAX Based Smart Grid Technology Gains Powerful Voice

The departure of Austin Energy's Andres Carvallo for the role of Chief Strategy Officer at smart grid startup Grid Net is a win for smart grid networks in general and WiMAX technology in particular.

The hiring of electric utility industry visionary Carvallo, who coined the term "smart grid" is seen by many as a coup for San-Francisco based Grid Net, which began in 2006 with the mission of providing "open, interoperable, policy-based network management software and communications products for the utility industry’s Smart Grid."

The big news here for the WiMAX ecosystem is Grid Net's use of WiMAX technologies in their drive to develop smart-grid solutions for the utility industry.  In 2008, they licensed their WiMAX Smart Meter and SmartGrid router to GE Energy. 

That was followed in late 2009, when Grid Net partnered with Motorola and GE, among others, to bring a first-of-its-kind WiMAX 4G-based smart grid program to Australia.  This project, which plans to install smart meters in nearly 700,000 households and businesses across Australia by 2013, is the first smart grid solution based on WiMAX technologies.  SP AusNet, the Australian Energy company that spearheaded this effort, said the utility chose WiMAX in general and Grid Net’s technology in particular because it wanted to build a network based on open standards, one that’s interoperable with a wide range of technologies. 



GE WiMAX Smart Meter

Some industry followers see the "oh-so-buzzy" smart grid sector as the place where WiMAX can "catch a break."  GigaOM blogger Katie Fehrenbacher noted in October that U.S.  utilities like CenterPoint in the Southwest and Midwest, National Grid in the East, and others on the West Coast see WiMAX as a solution for parts of their network where there is a demand for applications such as collecting large amounts of data on voltage, current and frequency in real time. 

A smart grid allows utility companies to create two-way, real-time networks to deliver electricity with the goal of saving energy, reducing costs and increasing reliability.  A smart grid keeps track of all the electricity flowing in the system and, at peak times for example, can shut off appliances at specific sites to reduce demand. 

After spending nearly a decade defining the smart grid, Grid Net's CEO Ray Bell says that 2010 is all about building it out.  He reports that a key measure of success is "the number of newly connected homes and businesses by the end of next year."

This is where Carvallo likely comes in.  As a leader at Austin Energy for the past seven years, Carvallo catapulted the energy company to the top in terms of smart grid leadership, implementation and technology.  He is a regular speaker on the lecture circuit from Austin to Dubai talking up smart grids and energy management trends.  Austin Energy's innovation program, The Pecan Street Project, brings together private and public groups in a effort to "reinvent the energy delivery system" in an attempt to create a smarter and cleaner grid. 

At Grid Net, Carvallo will assume the role of Chief Strategy Officer, helping Bell and the company chart the course over this year and into the future - which will focus "living in the smart gird," according to Bell.  In his new role, Carvallo will lead branding, messaging, partnerships, marketing, commercialization, support and solutions efforts worldwide.

Carvallo's communications expertise is timely considering the reluctance of utility companies to move forward on their smart grid plans, mostly due to financial concerns getting in the way, according to a Microsoft Corp. survey released last week. 

The survey, which polled nearly 200 electric, gas, and water utility executives around the world, perhaps outlines the challenges and opportunities for Carvallo and Grid Net.  In the survey, only 8 percent responded that they thought their smart grid technology was viable enough to support new business processes and new technologies.  In addition, only 8 percent of respondents said that they have completed smart-grid projects and another 37 percent say they have projects underway. 

Some industry analysts see the coming smart grid as a major shift in the energy world.  "Smart metering deployment has the potential to be one of the most significant changes in the energy world, not only for utilities, but also for consumers," Roberta Bigliani, research director for IDC Energy Insights EMEA (Europe, Middle East and Asia), said in a statement.

Tuesday, March 16, 2010 in Applications  | Permalink |  Comments (0)

WiMAX More Spectrally Efficient than HSPA & LTE, says Intel

A new whitepaper released by Intel asserts that WiMAX technology is more spectrally efficient than other mobile data technologies, resulting in advantages for operators including more subscribers per cell site and higher QOS data rates.

While large headline-grabbing theoretical/peak data rates of 50Mbps+ continue to be batted around the industry by proponents of HSPA and LTE, the more important measure is how efficiently these technologies use scarce spectrum resources.  It is widely acknowledged that mobile data traffic demand will outpace the supply of actual network data capacity in the coming years, and therefore the average realized data throughput is the real metric that should be compared.

The whitepaper highlights the importance of spectral efficiency and the basics for calculating system capacity on a wireless network.  The report compares mobile WiMAX 802.16e against three other technologies - HSPA (Rel 6), HSPA+ (Rel 7) and LTE (Rel 8).

According to the report, WiMAX is able to support a higher number of subscribers per cell site compared to the other technologies while supporting high QoS data rate applications.  For example, using a 10MHz channel, WiMAX is able to support 20 video streaming users per sector at 256 kbps, compared to 12 users at 128 kbps on an HSPA network.  Furthermore, WiMAX networks are able to support a large number of users even with high monthly data usage of 12GB per subscriber.

The complete whitepaper can be downloaded here.

Monday, March 15, 2010 in Business  | Permalink |  Comments (0)

WiMAX 2 Networks Ready in 2012, says Intel

Speaking at a press conference in Taipei Tuesday, an Intel executive said he expects the next version of WiMAX 4G technology to be deployed in 2012, according to IDG's Dan Nystedt.

"Standards work will be completed by the end of this year," said Rama Shukla, a vice president and director of the WiMAX program office at Intel, during a news conference in Taipei.

Intel has been a major corporate backer of the WiMAX ecosystem and is a main financial supporter of Taiwan's VMAX Telecom, which just launched a unique consumer experience trial today in Taipei. By partnering with a leading taxicab company, commuters in the capitol city now have access to 1000 WiMAX-enabled cabs.

The new Mobile WiMAX standard, 802.16m, will replace 802.16e and offer far faster download and upload speeds. The new technology will support 170 Mbps download speed and 90 Mbps upload speeds, according to Intel data, and will be fully backward compatible with 802.16e. Users will be able to use the service even while traveling at speeds up to 350 kilometers per hour, Shukla said.

The IEEE is expected to provide final approval for this new standard sometime this summer. And Clearwire, the largest company to offer commercial WiMAX services in the United States, has said it plans testing 802.16m sometime next year in the hopes of deploying it in 2012, according to an article in PC world in January.

"Work on the standard has been progressing very quickly," said Jose Puthenkulam, Intel's director of WiMAX standards in a WiMax.com interview in February. "The profile development time for 802.16m has been much shorter than with the prior, 802.16e profile - where the industry was still very much in a formulative state with respect to MIMO, beamforming, etc. We have taken the experiences with 802.16e and even some of the learnings from LTE and built that into the 802.16m standard."

Shukla said that this year, estimates for the number of global WiMAX subscribers range from around 6 million to 10 million, led by users in the U.S., Russia and Japan. Most of those users are turning to mobile WiMAX for laptop computer use. "We see very strong momentum [for WiMAX] in notebook PCs today," he said in his interview with Nystedt.

Of all the WiMAX member companies, none has been more vocal in their commitment to 802.16m than Samsung and Russian WiMAX operator Yota. Last October at the ITU World conference, Yota and Samsung demonstrated a test of an 802.16m network and Yota plans to be one of the first operators in the world to install the technology once it becomes available. As one of the fastest growing WiMAX operators in the world, Yota can certainly use the extra capacity. In one month alone last year, the service provider carried over 2,290 terabytes of data on its network.

To learn more about this new standard, see WiMax.com's article: WiMAX Act2: 8021.16m Provides Evolution Path to 4G.

Tuesday, March 09, 2010 in Business  | Permalink |  Comments (0)

WiMAX Boosts Taiwanese Commuter Experience

Bandwidth-hungry riders have a new option in Taipei as VMAX Telecom partners with a leading taxicab company to install WiMAX-enabled devices in 1000 cabs, and in the process possibly opens up new sources of revenue.

Of the nearly 60,000 taxis trolling for fares in Taipei, 1,000 are now WiMAX-equipped, making it worth the wait for the bright yellow cab with the large red "M" atop the car.

As of today, commuters in the Taiwanese capital will be able to surf the Internet, download videos, watch Web TV, play online games and more in taxis belonging to M-Taxi, one of the largest taxi services in the region. And all for free, at least for now. In addition, riders will be able to call and request these WiMAX-enabled taxis using a unique number.

M-Taxi, a leading Taipei taxicab company (above) now features WiMAX-enabled MIDs on 1000 cabs in their fleet. The company and VMAX Telecom are initially offering the service for free.

VMAX Telecom, a leading WiMax operator in northern Taiwan, is behind this latest expression of the power and usefulness of 4G technologies like WiMAX, equipping these taxis with MIDs (mobile internet devices.) They're calling it the "Mobile Internet Cafe."

The MIDs are small, flat devices with 7-inch touch screens made by Tecom Inc. that work with a stylus. They are attached to the back of the front passenger seat inside the taxis. The devices have embedded WiMAX and GPS (Global Positioning System) chips and use Microsoft’s Windows CE 5.0 operating system. They are loaded with video and audio codecs and are meant to entertain people as they ride taxis across Taipei. The devices are 216 millimeters long by 132mm wide and 24.5mm thick.

"The use of WiMAX-enabled devices in taxis is meant to popularize WiMAX as well as give people something to do if they’re stuck in traffic or need information such as the latest movie times," said Teddy Huang, chairman of VMAX, at a news conference in Taipei. The value-added service will also hopefully bring more customers to the taxi company, M-Taxi, he said. VMAX says they will continue to assess the program before they decide whether or not to charge for it. In addition, the service will be limited to the Taipei area, at least until VMAX expands its WiMAX network.

It seems like the more lucrative revenue stream, however, will come when 4G-equipped transportation meets up with targeted advertising. Imagine being a passenger on a Friday night and all of the advertising on the MID (or even on a digital sign attached to the outside of the cab) is geared toward your needs - food, drink and entertainment perhaps. Now imagine being the advertiser with access to a highly focused, ready-to-spend audience. And by some accounts, the average taxi ride in Taipei is 20-30 minutes.

Intel is among the major investors in VMAX, with agreements reaching back several years. In 2008 they invested $12 million (USD) to support the Taiwanese company's efforts to establish Taiwan's first WiMAX network, which they launched in January. Their network of more than 200 base stations will cover more than 85% of the city's population, according to the company.

VMAX has initially offered a 4Mbps/2Mbps service for NT$456 (US$14.30) per month using USB dongles or with WiMAX embedded notebooks.
 

Tuesday, March 09, 2010 in Applications  | Permalink |  Comments (0)

Cisco Exits WiMAX Access Business to Focus on Network Core & Edge

Company confirms that it will discontinue designing and building new WiMAX base stations and will instead focus its mobility efforts on the IP core and network edge.

Cisco confirmed the change in its mobile strategy during a call last week.  "We have decided to focus our efforts on delivering value in the edge and core of the network, and direct future investments on the access side to femto and Wi-Fi technologies," says Sai Subramanian, Director of Product Marketing for Cisco's Wireless Business Group.  "We will discontinue building and designing new WiMAX base stations, but will continue shipping existing equipment and supporting existing customer networks."

Cisco entered the WiMAX RAN (radio access network) business through its $330 million acquisition of Dallas based Navini Networks in October 2007.  Navini was a pioneer of so called "beamforming technology" that provides additional quality and signal strength by concentrating radio signals in the direction of the receiver - providing additional coverage compared to non-beamforming solutions.  Recent studies have shown that beamforming enabled base stations can reduce the number of towers needed by half, providing significant cost savings to WiMAX operators. 

Beamforming technology is currently supported in the current mobile WiMAX 802.16e profile and will be included in future revisions of WiMAX (802.16m) as well as LTE.  While many vendors have plans to include the technology on their roadmaps, to date few vendors except Cisco have commercial equipment available.

Departing the WiMAX RAN business will allow Cisco to focus on the IP core and network edge where it's a more dominant player.  In October 2009, Cisco acquired Starent Networks which offers network agnostic mobile gateway solutions that support a broad range of access technologies including CDMA, GSM, UMTS, WiMAX, Wi-Fi and LTE among others.  Over the past few years, Starent has racked up an impressive list of customers including Vodafone, Verizon, Sprint, KDDI and China Unicom, and was selected to provide its technology in Verizon's upcoming LTE network.

While leaving the WiMAX RAN market, Cisco remains an important player in the WiMAX space in providing core and network edge equipment.  "We expect to continue to be a significant player in the WiMAX market," says Subramanian.  "We will continue to be big players in the WiMAX space, just not in the access part of the network."

Cisco is following a trend in the industry in which base stations are becoming a smaller percentage of the overall capital budget.  While costs are also coming down, the intelligence of the network is migrating into the core and edge of the network, and base stations are becoming "dumb radios" relative to other parts of the network.  Under this scenario, operators will leverage many different types of access technologies including WiMAX, LTE, Wi-FI, 3G depending on a number of factors including spectrum owned, subscriber density, devices, applications and business models.

While exiting the macro-level base station market, Cisco will continue to pursue smaller radio access technologies including femtocells and Wi-Fi.  Femtocells are essentially wireless access points used by mobile operators to improve network coverage in small areas and off-load data traffic from their network.  Femtocells can use a wide range of technologies and leverage a broadband connection to route the connection back to a carrier, bypassing the operator's macro-cell towers.  While femtocells could conceivably include WiMAX or LTE technology, no decisions have been made at this time according to the company.  "As we examine the market, we will certainly look at all different types of technologies required and where there is an area we can delivery significant value, rather that is WiMAX, LTE, 3G, etc.," says Subramanian.

While Cisco was not one of the top WiMAX RAN providers, its departure may none the less be seen as a psychological blow to the industry.  Cisco's exit leaves Motorola, Alvarion, Samsung and Huawei as the dominant WiMAX RAN vendors in the industry.  Cisco follows Alcatel-Lucent and Nokia Siemens Networks who also left the WiMAX market to focus on other access technologies such as LTE. 

While WiMAX detractors will surely use this as opportunity to show waning support for the technology, this is not un-similar to other telecommunications markets like CDMA, where a handful of infrastructure providers serve the market.  In some ways, industry consolidation is to be expected and is an indicator that the market is maturing.

While the WiMAX equipment market is projected to be $6-$8 billion over the next 3-5 years, it may have been too small relative to Cisco's other markets and opportunities.  Although it was involved in around 50 WiMAX networks from an access perspective, it was never in the top 3-4 vendors in the WiMAX RAN market and paled in comparison to its involvement in other parts of WiMAX networks.  The company is involved in most all WiMAX networks in some form and is the leading IP core provider for Clearwire's U.S.  nation-wide network build out. 

A number of factors may have attributed to the slow adoption of the Navini/Cisco WiMAX base stations.  Although fewer base stations are needed due to beamforming technology, the per-unit cost of the base stations were more expensive than competitors which often put them at a disadvantage in RFPs.  Although research showed that operators could actually lower total network costs by utilizing beamforming, many of the decision makers were looking for cheaper base stations, especially in the race to put up networks quickly.

Given their complexity and longer sales cycles, the WiMAX macro base stations may also have been more of a challenge for Cisco's channel partners, who are used to selling more established products such as Wi-Fi with higher margins and shorter sales cycles.  While many WiMAX networks today support advanced features such as MIMO (multiple-input, multiple-output) antenna technologies, few operators are using these capabilities.  Most operators will eventually utilize more advanced MIMO and beamforming technology, but it will take time to implement these capabilities.

Cisco will continue to be active in the WiMAX Forum and the WiMAX Open Patent Alliance according to the company."We are supportive of the WiMAX market and will continue to have WiMAX solutions and serve those customers," says Andy Capener, Director of Service Provider Marketing for Mobility at Cisco.  "We are just now going to now focus our efforts on where our expertise resides."

 

Monday, March 08, 2010 in Business  | Permalink |  Comments (1)

Wireless Innovations Improve Patient Care, Reduce Healthcare Costs

Wireless operators such as Sprint are leveraging the performance advantages of WiMAX technology in the Healthcare industry to provide better patient care while reducing delivery costs of services.

The Healthcare industry is clearly an area where Sprint sees big opportunities.  This week Sprint’s Dan Hesse spoke at the opening general session for the Healthcare Information and Management Systems Society (HIMSS) conference in Atlanta, becoming the first CEO of a national wireless carrier to speak at the event.  This year’s show featured nearly 900 exhibitors and more than 300 educational sessions and panel presentations.

One change in this year’s show was the growing emphasis on mobile and wireless Healthcare solutions.  As more connected devices and mobile applications are developed, it has become more important for those in the Healthcare industry to keep up with the latest technology and turn these advances into higher quality and more effective care for patients.

The HIMSS is a membership-based organization that is focused on the optimal use of information technology (IT) and management systems for the betterment of Healthcare.  Founded in 1961, HIMSS represents more than 23,000 individual members, 73% of whom work in patient care delivery settings.

During his keynote, Hesse emphasized the security of WiMAX networks using licensed spectrum compared to many Wi-Fi networks that utilize unlicensed spectrum.  Hesse also said that one of the most compelling reasons for Healthcare providers to adopt wireless broadband is that it enables them to provide remote Healthcare and telemedicine solutions to their patients.

"As the population ages, home Healthcare is growing dramatically," Hesse said.  "And we believe it can greatly benefit from mobile technologies."

A study released last year by ABI Research projected approximately 15 million wireless telehealth sensors by 2012, more than double the number of those in use today.  According to ABI, these systems will be used to monitor and track the status of patients, especially those with chronic conditions, providing early warning signs before they become dangerous.

Hesse also sees new applications and business models made possible by the innovation of an open, 4G wireless network.  "The smart applications aren't going to be developed by Sprint or our main competitors, they're going to be from people focused on wireless applications," he said.  "We work very hard to create tools that make it simple for operators to create applications on our networks."


Healthcare Industry Innovation

In the Healthcare industry, wireless technologies are being used in many innovative ways to provide consistent, reliable information to providers.  For patients suffering from hypertension, for example, sensors embedded in blood pressure monitors can send information wirelessly to a Healthcare provider’s database, comparing it with past data and charting the patient’s continued progress.

In another example, a company known as VITALITY™ has developed an ingenious way of helping patients remember when it’s time to take their medication.  Electronic caps that fit on top of prescription medication bottles known as GlowCaps™, use lights and sounds to signal to patients when it’s time to take their medication.  The caps are embedded with wireless chips and can sense when the bottle is opened, communicating that information with other sensors in the home as well as wirelessly over the internet to Vitality’s secure network. 


picture courtesy VITALITY

It’s the wireless connectivity that makes the product so effective and innovative.  With GlowCaps, if the bottle is not opened after two hours, the user is automatically reminded with a telephone call with specific instructions such as: “It’s time to take the pill in your green GlowCap.” Other family members or physicians can be notified via email or by telephone as well.  The device can even call with refill reminders and connect the patient to their pharmacy as pills are depleted.

While current generation Healthcare monitoring devices most likely use Wi-Fi for connectivity, the advantages of using wider-range wireless technologies such as WiMAX is that it does not rely on patients to connect to a local network or PC in the home.  What you don’t want to have is for a patient monitoring device to stop functioning because a Wi-Fi router became unplugged or their internet connection is down.  Technologies such as WiMAX provide the security and reliability of a carrier-grade solution over licensed spectrum.

Failure to take prescription medication is a serious problem and adherences to consistent medication schedules can result in significant cost savings, especially with chronic conditions such as diabetes, high cholesterol and hypertension. 

The increased use of wireless technologies in the Healthcare industry can have an enormous impact on the both the quality and cost of Healthcare.  The level of patient care can be increased dramatically though more consistent monitoring and better integration with Healthcare providers. 

Tuesday, March 02, 2010 in Applications  | Permalink |  Comments (0)

Maravedis: WiMAX Subscribers Increase 80% According to Latest Findings

This week in its quarterly 4G Counts webinar, telecom market research firm Maravedis revealed its latest findings, including strong growth of WiMAX subscribers and other developments in the broadband data ecosystem.

This week in its quarterly 4G Counts webinar, telecom market research firm Maravedis revealed its latest findings, including strong growth of WiMAX subscribers and other developments in the broadband data ecosystem.

The webinar follows a press release issued by the company last week and provided additional details on their latest report. According to the firm's research, there were 4.73 million global BWA/WiMAX subscribers served by more than 200 operators at the end of Q3 2009 (the most recent quarter available), representing an 80% growth from Q3 2008. Also, for the first time the number of mobile WiMAX (802.16e-2005) subscribers surpassed the number of fixed WiMAX (802.16-2004) subscribers worldwide. In the fourth quarter, the company expects to see another 1.5 million new BWA/WiMAX subscribers for a total subscriber base projected at 6.5 million by the end of 2009.

The webinar was based on analysis from Maravedis and its 4G Counts service that tracks 4G operator deployments and provides details on the 4G ecosystem from over hundreds of operators worldwide. The service provides information on subscribers, revenue, ARPU, services offerings, base stations, devices and more.

During the webinar, Maravedis provided an updated list of the top WiMAX operators globally in terms of number of subscribers projected for the end of Q4 2009. Toping the list again was Clearwire, followed by Yota in Russia, Inukshuk in Canada, Korea Telecom and Telmex in Mexico.

Maravedis also compared the pricing plans of leading 3G and mobile WiMAX operators by region. One interesting observation was based on those surveyed, 85% of WiMAX operators reported offering unlimited data plans, compared to only 41% for 3G operators. This was possible due to the better performance of the WiMAX networks and more efficient usage of spectrum, but WiMAX operators may be forced to adjust their plans as more subscribers are added to the networks. WiMAX operators also reported some of the heaviest usage on their networks, including more than 10GB/month for Russian WiMAX provider Yota and nearly 8GB/month for Packet One in Malaysia.

The webinar also provided insight into the latest developments with LTE, including 51 operator commitments by the end of Q3 2009. According to the company, LTE dongles will become available in the second half of 2010, but not until 2011 for handsets and lower power devices such as portable integrated LTE/Wi-Fi routers.

The presenters concluded that 2010 would be a more prosperous year for the industry, but that traffic growth will continue to be a challenge for operators. As for WiMAX or LTE, most decisions will be made based on spectrum owned, business models and support for legacy systems. Furthermore, while many LTE networks will be operational by 2011, WiMAX is the only option presently available.
 

Wednesday, February 24, 2010 in Business  | Permalink |  Comments (0)

Clearwire Releases Year-End Results, Plans to Triple 4G WiMAX Customers in 2010

U.S. WiMAX operator Clearwire announces a strong finish in 2009, reporting record subscriber growth as it sets the stage for an ambitious market expansion into 2010.

The company ended the year with 688,000 subscribers, a 45% increase from the prior year, including 642,000 retail subscribers and 46,000 wholesale subscribers from partners Comcast, Sprint, and Time Warner Cable.  In the fourth quarter alone, the company added a record 87,000 subscribers, greater than the prior 3 quarters combined.

Clearwire's wholesale partners is clearly an area that the company wants to leverage and grow.  CEO Bill Morrow told investors on the earnings call that he plans to expand the wholesale channels by adding other types of partners including ISPs, fixed-line operators, retailers and consumer electronics companies.

"Over the past year, Clearwire established its leadership in 4G mobile broadband services by building the largest 4G network in North America, raising additional financing to fuel our growth, supporting the 4G wholesale service launches for three of the most prominent communications companies in the U.S., and delivering solid financial results in a challenging economic environment," Morrow said. 

"Our all-IP network and unmatched spectrum holdings have truly enabled us to become the 4G 'network of networks.' We now provide the underlying capability to Comcast, Sprint, and Time Warner Cable to serve the growing demand for mobile broadband services, and we are well positioned to expand our wholesale business even further.  When coupled with the success of our own CLEAR retail brand, record subscriber growth, and our extensive market build plans for this year, we are confident that we remain on a strong growth trajectory for 2010."

At the end of 2009, Clearwire was operating 27 Markets Across the U.S.  Covering 34 Million People, including Chicago, Dallas-Ft.Worth, Las Vegas, Atlanta, Philadelphia, Seattle and Honolulu.  The company plans to begin offering commercial service in Houston, Texas in the coming weeks along with coverage in New York, Boston, Washington, D.C., Houston, the San Francisco Bay Area, Denver, Minneapolis, and Kansas City later this year.  In total, the company plans to provide coverage to 120 million people by the end 2010, a four-fold increase from 2009.





For 2010, the company plans to triple its 438,000 WiMAX subscribers at the end of 2009 which would put it on pace to add approximately 1.3 million WiMAX subscribers in 2010 *.  To keep pace with this growth, the company will increasing their number of towers from 5,000 to nearly 20,0000 according to Clearwire's CTO John Saw.

* Editor's Note:  According to Reuters, Clearwire subsequently issued a correction to say it expects its total subscriber base of 688,000 to triple, instead of its WiMAX subscriber base of 438,000, which would imply a projected 2.0 million total subscribers in 2010.

From a financial perspective, the company still has some challenges ahead.  While increasing revenue 19% for the year to $274.5 million, the company reported a larger net loss than analysts had predicted ($0.55 per share compared to $0.45 per share).  The higher net loss was likely influenced by increases in SG&A expenses and a higher customer acquisition costs driven by the new markets launched in the fourth quarter.  Clearwire expects new markets to become EBITDA profitable after aground 18 months, so we should start to see some signs of improvement around the end of 2010.

Wednesday, February 24, 2010 in Business  | Permalink |  Comments (2)

U.S. Broadband Stimulus Round Two & Implications for WiMAX Operators

Despite confusion and delays around the first round of the process, improvements and clarification on rules in the second round of the U.S. Broadband Stimulus Program should provide better opportunities for WiMAX operators and last mile projects.

Wireless Broadband Perspectives - WiMAX.com Weekly Series Sponsored By: For the next several months, WiMAX.com and Cisco will be featuring weekly topics and perspectives from the WiMAX & wireless broadband industries.    This week we talked with Mark Pagon, CEO of WiMAX service provider Xanadoo Networks on the latest developments with the U.S. Broadband Stimulus Program.

When announced in early 2009, the U.S.  Broadband Stimulus Program was seen as a potential boon for WiMAX and broadband wireless access (BWA) providers.  With both licensed and unlicensed equipment readily available, WiMAX was seen as the perfect solution for providing low cost broadband connectivity quickly and efficiently, and reportedly made up 25% of the last mile proposals submitted in the first round of the process.  Overall, the U.S. Broadband Stimulus Program was so popular that over 2,200 applications totaling $28B were submitted during the first round, nearly 4 times the combined $7.2B funding allocated for the programs.  The agencies were also flooded with over 11,000 public comments and challenges, many from entrenched incumbents looking to block potential new entrants into markets already served.

With the exception of announcements in the last few weeks, very little funds have been awarded under either program and little, if any, have been awarded to wireless or WiMAX projects.  Of the $7.2B in the combined programs, one year later only $900M has been awarded under the programs.  Furthermore, most of the awards had been given to a hand-full of "Middle Mile" programs consisting of high-speed fiber initiatives connecting the national internet backbone into community anchor institutions such as schools, libraries, community colleges and other institutions of higher education. 

But first a little history of the program.  The U.S. Broadband Stimulus Program was created from the Obama administration's American Recovery & Reinvestment Act of 2009 which designated $7.2B in stimulus funding to be disbursed by two government organizations - the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS).  Being a stimulus program, the goal of the program was to quickly create tens of thousands of jobs and connect millions of rural communities to broadband - providing additional economic development, healthcare and educational benefits.

In the original statute, the NTIA was allocated $4.7B for the Broadband Technologies Opportunity Program (BTOP) to support the deployment of broadband infrastructure, enhance and expand public computer centers, and encourage sustainable adoption of broadband services.  The RUS was allocated $2.5B for the Broadband Initiative Program (BIP) to support broadband infrastructure projects, mostly in rural and underserved areas.  While the two organizations had somewhat distinct charters, there was overlap between the two programs and lack of clarification in definitions and rules caused confusion in those submitting applications.

Under the original plan, proposals were supposed to have been awarded in three separate rounds (including the first one last year).  Given the latest delays, awards will now be completed in just two rounds.  Round 1 award announcements started over the past few weeks and will be completed by the end of February.  Round 2 applications are being accepted through March 15th, with award announcements starting in July and completed by September 30th, 2010.


Broadband Stimulus - Round Two

Round two of the process has fortunately provided much clearer objectives and rules compared to round one and many applicants have been encouraged to reapply under the new guidelines.  The most significant change is a clearer separation between the two programs - essentially all middle mile applications are being directed towards the NTIA, while last mile applications will go to RUS.  The reasoning and focus on middle mile projects by the NTIA was to ensure that sufficient infrastructure was in place to enable last mile connectivity. 

In the second round, NTIA has $2.6B left to allocate of which approximately $2.3B will be available for infrastructure projects.  The balance of funds will be allocated to public computer center projects and sustainable broadband adoption projects including training and resources for groups where broadband technology has traditionally been underutilized.

For WiMAX operators, the best opportunity will come from the RUS program which has $2.3B left to allocate in the second round, mostly for last mile projects.  This will be good news for those applying in the second round since only $300M was awarded in the first round.  A number of regional WiMAX operators including Digital Bridge Communications, Open Range and ERF Wireless applied for funds in the first round and are still waiting to hear the results.  One such provider is Xanadoo Networks which operates WiMAX networks in Texas, Oklahoma and Illinois and submitted a first round proposal to cover rural communities in eastern Kansas.

"WiMAX projects should do essentially better in the second round," says Mark Pagon, CEO of Xanadoo Networks.  "Lack of clarification in the rules for the first round created confusion and lead to many applications being denied, but improvements in the process should give applicants with sound proposals the opportunity to reapply in the second round."

In the second round, RUS has also simplified the rules around the mix of grants and loan and has adopted a 75/25 grant/loan ratio for all projects along with the flexibility to seek a waiver if additional grant resources are needed for areas that are difficult to serve.  Unlike the BTOP program under the NTIA, the BIP under RUS has no matching requirement in order to qualify.

"Under the first round, the maximum grant that could be received was 50% of the project, except for in unusual circumstances," says Pagon.  "With the new rules, applicants can receive 75% of the project cost as a grant and can apply for up to 100% if needed, providing a better chance for projects that may not have otherwise received funding."

Separate notices of funds available (NOFAs) have been issued for NTIA and RUS, and applicants are directed to apply for either NTIA or RUS, but not both organizations.  Round two application packages for both programs were made available electronically on February 16th, and barring any further extensions are due back by March 15th.
 

Tuesday, February 23, 2010 in Business  | Permalink |  Comments (1)

Sprint Confirms Launch of WiMAX Handset Within Months

Revealing few other details, Sprint has confirmed with Forbes that it will be launching its much anticipated WiMAX handset by the first half of 2010, early than previously expected.

As has been widely speculated, the new device code named "Supersonic" will most likely be made by HTC and will be similar to T-Mobile's HD2 below.  The handset is also expected to include Qualcomm's speedy 1GHz Snapdragon processor, feature a 4.3-inch touch-screen display, and run on Google's Android operating system (possibly the new 3.0 version).

Of course the best part will be its 4G WiMAX connectivity, making it up to 10 times faster than current 3G networks according to Sprint and providing a much better experience for high-bandwidth applications such as streaming video.   The handset is also expected to be "dual mode", allowing it to switch to Sprint's 3G network in areas where 4G isn't yet available.

HTC HD2 Handset

Sprint's 4G WiMAX service is currently available in 27 U.S. cities including Atlanta, Chicago, Dallas Ft. Worth, Las Vegas and others and is expected to launch in Houston, Texas in the coming weeks.   Boston, New York, San Francisco and Washington D.C. are planned for later this year.

I expect we will be hearing more details next month at the CTIA Wireless show in Las Vegas.

Friday, February 19, 2010 in Equipment  | Permalink |  Comments (0)