The Telmex WiMAX Strategy

Much has been said about the fact that Telmex seems to be deploying WiMAX services everywhere in Latin America except Mexico

By Cintia Garza, Market Analyst
Contact the author at cintia@maravedis-bwa.com

Telmex, the telecommunications incumbent in Mexico, has been pursuing an aggressive expansion strategy.  Since 2004, the telco has expanded its operations throughout several Latin American with strategic investments in high-growth markets including Argentina, Brazil, Chile, Colombia, Ecuador, Peru and Uruguay.  In all of these markets, Telmex acquired 3.5GHz WiMAX spectrum either by direct allocation from the telecom regulators or by acquisition from license holders in each country.

Much has been said about the fact that Telmex seems to be deploying WiMAX services everywhere in Latin America except Mexico.  This is mainly because, since its inception, the incumbent has serviced Mexico primarily through a wireline infrastructure, thus limiting its ability to implement a wireless network that would directly compete with its own strength in Mexico:  amely DSL and Cable.  However, the reality is Telmex has already deployed commercial WiMAX services in Mexico in areas where copper and DSL are not feasible.  During an interview with Maravedis, a spokesman at Telmex Mexico said that the company already has a customer base of over 5,000 WiMAX subscribers in Mexico, and the number is growing considerably.  The spokesman further confirmed that Telmex has recently placed an order for additional CPEs with Motorola and Alvarion.  For more detailed information, please see the “Telmex WiMAX Plans in Mexico” interview available in WiMAXCounts (registration required).

If Telmex reaches their stated objective of CPE installations by the end of 2008, their WIMAX deployment could be one of the largest, if not the largest in Mexico.   “Initially our objective is to launch in areas not served by the copper infrastructure, where the business case for copper is not good enough,” stated the Telmex spokesman.  “So we are going to cover these many areas; it is going to be a huge deployment!  It is not going to be a nationwide network in the sense that we are not going to cover cities already covered by copper or WiMAX.”

In Mexico, Telmex has 50MHz spectrum nationwide in the 3.5GHz band, which the operator acquired 6 years ago for $US 45 million in addition to 60MHz of spectrum in the 10.5GHz band.  COFETEL, the telecom regulator, is planning to allocate two nationwide WiMAX licenses of 25MHz spectrum each in the 3.4-3.7GHz bands, and two regional WiMAX licenses of 50MHz spectrum each in the 3.6-3.7GHz bands by the end of 2008.  The Competence Commission, however, is not allowing incumbent participation in these auctions, but Telmex is still hopeful.  “They are saying that they won’t allow incumbents to participate in the auction.  However, with the current law, they will have to demonstrate to us that we are not able to participate,” said the Telmex spokesman.

Moving to the South of the continent, Telmex’s expansion strategy in Latin American countries has been mainly through acquisitions.  Chile was the first Latin American market where Telmex deployed WiMAX.  The company acquired Chilesat in 2004 and one year later the telco was awarded nationwide spectrum in the 3.5GHz band.  Telmex has been successful in deploying WiMAX “d” using Alvarion gear, making services available to 98% of the Chilean population.  In addition to Chile, Telmex has international WiMAX operations in Argentina, where they acquired Ertach; in Brazil, where they acquired Embratel; as well as in Peru, Ecuador and Venezuela.  They are also looking at expanding their operations through an undisclosed acquisition in Paraguay.    Telmex has not yet announced any plans in Columbia as they do not own any WiMAX spectrum licenses in this country but they could follow the same acquisition strategy and compete against the Colombian telecom operator Orbitel, which currently has the largest WiMAX deployment in south America in terms of subscribers.  Further details on Orbitel are available to registers WiMAXCounts users. .

A favorable regulatory environment in most Latin American countries, the high cost of broadband in many of these markets, and a growing demand for high speed Internet services have presented Telmex with attractive opportunities to develop new business models and offer less expensive solutions such as WiMAX to satisfy increasing broadband needs in these markets.  Through its numerous acquisitions, Telmex has gained global competitiveness and a strong position in Mexico and Latin America.

Telmex’s thinking on LTE…

“We are following different partnerships.  This is going to be an interesting technology.  In the next frequency auction some frequencies will be available that will be usable for LTE, including 1.7GHz.  We have not yet figured out what we are going to do.  We think we are going to let our sister company “America Móvil” play with LTE. We think LTE will be a key growth area for the broadband market in Mexico, especially for some mobile companies and TELCOS in Mexico that will find LTE to be a very economic, efficient way to compete in the broadband market.”

Maravedis has seen a growing interest in LTE among incumbent operators but few plans for deployments due to lack of current availability.  “Growing convergence between the two efforts shows both promise and potential conflicts between operators and within units within single companies.  As WiMAX and LTE move forward, the increased overlap between broadband and mobile capabilities and service platforms will inevitably lead to cross purposes between Telmex broadband operations and their America Móvil subsidiary” commented Robert Syputa, Senior Analyst, IPR & Technical, Maravedis.

For more information you can contact the author: cintia@maravedis-bwa.com

Monday, June 30, 2008 in Business | Deployments  | Permalink |  Comments (0)

Getting Touchy-Feely with Mobile Devices

Accelerometers, force feedback, and haptics technology, typically reserved for scientific and research applications, are finding new uses in consumer devices.

By Jeff Orr, Senior Analyst - Consumer Electronics
Contact the author at jeff@maravedis-bwa.com

Shock and vibration are environmental forces that mechanical engineers have dealt with for decades. The venerable Timex advertising slogan for watches said “Takes a licking and keeps on ticking.” These forces wreak havoc on mobile devices that impact unforgiving floors, skid across asphalt streets and are continuously shaken in transit. Vendors are harnessing this device movement to create engaging features for mobile broadband handsets. Accelerometers, force feedback, and haptics technology, typically reserved for scientific and research applications, are finding new uses in consumer devices.

Accelerometers measure changes in force caused by acceleration and gravity. Measuring multiple axis change can sense inclination angle, shock and vibration. Electronically-controlled vehicle safety systems use accelerometers to determine impact force and deployment of airbags. Even the Nintendo Wii video game console incorporates accelerometers into player controllers. Hand movement simulates casting a fishing line or jabbing at a virtual sparring partner. Accelerometers are also being designed into consumer electronics and handhelds. Several mobile communications devices, including Apple’s iPhone and Nokia’s N95, use the technology to adjust video and web browser orientation when handsets are rotated from portrait to landscape display mode.

The HTC Touch Diamond includes a labyrinth game called Teeter that shows the precision of its accelerometer. Instead of pushing buttons or touching the screen, Teeter is controlled by tilting the device from side to side. The game’s goal is to move the simulated steel ball around the maze without it dropping into pitfalls along the way. As the ball bumps into walls, force feedback vibrates the handheld. Stronger “thumps” occur when the ball impacts screen edges at a faster rate. This game demonstrates how force-related technologies can enhance the sensory experience of mobile devices.

Taiwan’s dmedia uses a G-sensor to create a pedometer function in the company’s F200 dual-screen, WiMAX-enabled personal navigation device (PND). The step counter coupled with the embedded GPS receiver creates new application possibilities, such as walking tours and dynamic jogging routes. Outdoor enthusiasts will soon be able to track physical activity and create a simple diary entry of their performance.

Haptic technology enables response to touch on a traditionally static platform. Vibration or motion is delivered when a user touches the interface surface. When combined with tactile sensors to measure the force exerted by the user, a depth of touch is created. Haptics have been introduced for visually-impaired computing experiences that “bump” when a user passes the mouse cursor over icons or workspace objects. Similar to the introduction of low-cost accelerometers, video game systems have successfully implemented basic haptics. A Rumble Pak was introduced for Nintendo’s N64 game system controller that vibrated when a character was struck or while driving over rough ground. This capability is included as a standard feature on many game console controllers. Gaming joysticks and arcade chairs also use force feedback to provide resistance or vibration responses across a variety of simulated environments.

In February, Mitsumi introduced a haptic touch pad for mobile devices. The controls address one-handed device operation by residing on the back of a full-screen device, minimizing the need for stylus and touch screen input. Reading news headlines can be enhanced through feeling a bump at the start and end of an article. Transferring a file from one device to another could eventually become a physical gesture of “passing” or “handshaking” rather than a tapped or typed command. Creating a haptic response for personalized topic searches like sports, weather, or custom keyword matches in context remain to be exploited.

Environmental forces like shock and vibration used to be enemies of mobile devices. The use of rugged and lightweight materials has reduced the likelihood of damage. By incorporating accelerometers, force feedback and haptics technologies, touch-sensitive experiences are replicable on mobile computing devices. Content and applications that are haptic-aware remain in early stages of development due to the lack of widely adopted devices. Understanding temperature or texture may not be widely adaptable to mobile devices yet, but the use of touch and haptic responses are creating new possibilities for immersive mobile device experiences.

For more information you can contact the author: jeff@maravedis-bwa.com

Thursday, June 12, 2008 in Applications  | Permalink |  Comments (0)

Europe Prepares for 2.6 GHz Spectrum Feeding Frenzy

European operators are eagerly anticipating the 2.5-2.6 GHz auctions planned for the next two years.

By Jeff Orr, Senior Analyst - Consumer Electronics

Contact the author at jeff@maravedis-bwa.com

Twenty-seven months after the first WiMAX products achieved certification, the first Mobile WiMAX The FCC’s auction of 700 MHz spectrum in January received significant attention for its record revenue levels and prospect for superior propagation characteristics. Not to be outdone, European operators are eagerly anticipating the 2.5-2.6 GHz auctions planned for the next two years. The refarmed band covers nearly 200 MHz of valuable real estate. However, not every EU country is ready to move ahead. Current licensees occupy the band in some markets, while a technology battle over how to efficiently allocate spectrum threatens to fragment the member countries.

The airwaves in question cover 2500-2690 MHz, more commonly known as the 2.5 GHz or 2.6 GHz band. A philosophical war remains heated between developers of infrastructure and devices that utilize spectrum differently. Cellular voice networks have favored a duplexing method called Frequency Division Duplexing (FDD), where two chunks of spectrum are used separately for an equal amount of uplink and downlink communication. The alternative is Time Division Duplexing (TDD), where a percentage of time determines how uplink and downlink traffic share a single spectrum channel. TDD tends to mimic traffic patterns found through Internet applications where requests for information outweigh sending data upstream. FDD proponents argue that consumer behavior will generate an equal amount of traffic in both directions over time. Rather than exclude one or the other, European officials have devised a plan to allocate both in upcoming 2.5 GHz auctions.

Norway completed its 2.5 GHz auction in November 2007. The Norwegian Post and Telecommunications Authority (NPT) issued licenses to five companies, including: Arctic Wireless AS, Craig Wireless Systems Ltd, Hafslund Telekom AS, NetCom AS, a subsidiary of TeliaSonera AB, and Telenor ASA. License prices totaled NOK 228,881,000.

Sweden was the first EU member state to conclude a 2.6 GHz sale. Up for grabs were 14 channels of paired 5 MHz FDD spectrum and a single unpaired swath of 50 MHz for TDD use nestled between the upper and lower FDD channels. The allocation followed a CEPT (European Conference of Postal and Telecommunications Administrations) definition for harmonized spectrum across the European Communities. The CEPT harmonization enables non-conflicting allocation for both TDD and FDD operation.

The Swedish Post and Telecom Agency raised a total of SEK 2.1 billion (USD 346 million) by awarding licenses to:

• Tele2 Sverige AB (4 FDD channels)
• HI3G Access AB (2 FDD channels)
• Telia Sonera Mobile Networks AB (4 FDD channels)
• Telenor Sverige AB (4 FDD channels)
• Intel Capital (1 TDD channel)

The Swedish auction was the first foray of chipmaker Intel into the business of spectrum ownership. Unlike the other four licensees, Intel has no aspirations to launch its own mobile network. Instead, the investment most likely secures room for new WiMAX carriers to lease access from the company.

Several EU countries, including Austria, France, Germany, Italy, the Netherlands, Portugal, Spain and the United Kingdom are preparing for similar auctions from 2008-2010 in anticipation of next-generation mobile networks. The occupation of prior users at 2.6 GHz could pose a challenge for commencing auctions in some countries. Austria anticipates prior users clearing before the close of 2008, making possible an auction no sooner than end-of-year. France’s Ministry of Defense has rights to the band until 2015, though it may be able to abandon use by 2010. Similarly, Italy’s military utilizes 2.6 GHz. A consultation on prospects for future commercial access is planned for this year. Germany faces a slightly different issue – litigation. Prior user licenses expired last year, but a legal battle has postponed setting an auction date.

Remaining countries are turning the crank on governmental processes to ready their auctions. The Netherlands is planning for a Q3’2008 auction. OFCOM announced a September date for the UK event. Neither Portugal nor Spain has set an auction date yet. Consultations and the on-going refarming of users is keeping regulator agendas occupied.

Is the harmonized 2.6 GHz allocation a missed opportunity for WiMAX operators? Current certification profiles for 802.16e-2005 systems are limited to TDD schemes. While the 50 MHz TDD block recommended by CEPT is nothing to scoff at, mobile WiMAX systems are not invited to play in the 140 MHz sandbox dedicated to FDD systems. The WiMAX Forum certification program has plans to address this gap during 2009. An interim certification program will enable flexibility for multiple duplexing methods and the creation of new certification profiles. 3GPP LTE systems are also anticipated to support either TDD or FDD methodology.

ETSI (European Telecommunications Standards Institute) began the approvals process earlier this month for mobile WiMAX (IEEE 802.16e-2005) to become an official 2.6 GHz technology. The effort is seen as another win for the WiMAX camp. Last year, the ecosystem vendors succeeded in having the ITU recognize the mobile broadband standard as an IMT-2000 technology at the World Radio Congress (WRC). The ETSI process enacts that recommendation on a European regional level. CEPT was responsible for the formation of ETSI in 1988.

HSPA and LTE promoters are also posturing solutions that align with the CEPT harmonization. Mobile pioneers, including Sweden’s Ericsson, promote the 2.6 GHz plan as a greenfield for next-generation mobile broadband colonization. The developer says its portfolio of HSPA products and its LTE development are capable of supporting the CEPT FDD allocation.

The pursuit of harmonized spectrum across the region is a welcome gesture in preparation for new mobile broadband service introduction over the next three to five years. Equipment, developed around a common set of requirements, can be engineered and manufactured with minimal radio variations. Multiple categories of devices and services will emerge that utilize the same spectrum in new and flexible ways. The foresight of the CEPT recommendation appeals to multiple parts of the supply chain and ultimately benefits Europe’s mobile subscribers.

For more information you can contact the author: jeff@maravedis-bwa.com

Sunday, June 01, 2008 in Equipment  | Permalink |  Comments (0)

Who has Enough Spectrum to Deploy WiMAX Profitably?

Author: Adlane Fellah, CEO and founder

It is often said that spectrum is a “must have” asset for wireless operators who want to scale their service offering. The lower the frequency band, the better the propagation characteristics, with sub-1GHz sometimes referred to as “beach-front property”.

Having beach-front property is great, but having a large property is even nicer. Regardless of the frequency band, the amount of spectrum does matter. In our Clearspectrum™ database, we have accounted for more than 1,000 spectrum owners in the 700MHz, 2.5, 3.5GHz bands. This is obviously a large number compared to the 300+ 3G operators in the market. But the question is how many have sufficient spectrum to provide profitable fixed/portable/mobile broadband services? And consequently how much spectrum is needed to build a profitable and scalable network?

Spectrum characteristics

Our first step is to breakdown the operators from our BWA/WiMAX spectrum database by the amount of spectrum they own/lease. Exhibit 1 below shows the results of a sample of the top 200 BWA/WiMAX licensees worldwide that own at least 20MHz of spectrum and less than 50 MHz. A big proportion owns more than 50MHz, which is surprisingly high.

Exhibit 1: Operators Split by Spectrum Owned

Source: www.Clearspectrum.net

Those are of course global numbers that do not show the regional differences and particularities. The following provides the regional particularities:



Exhibit 2: Operators Split by Spectrum Owned by Region

Source: www.Clearspectrum.net

CALA is the region with the highest percentage of operators who own “fat” amounts of spectrum, which should help these operators deploy BWA and WiMAX services with more leverage than their Asian counterparts, such as the Indian operators who have the lowest amount of spectrum.

How much spectrum is enough?

Thus we have broken down the spectrum ownership by region. But how much spectrum is enough? There is probably not a single answer. Five and 10MHz are the most popular channels in the mobile WiMAX profiles, while 3.5MHz channels are characteristic of 802.16-2004 radios.

According to Kevin Suitor, VP Business Development at Redline Communications, “All deployment scenarios we’ve analyzed in the past indicate that 30MHz is the minimum required to provide decent residential broadband service, assuming that we are talking about providing continuous (ubiquitous) coverage in urban areas. This is based on a reuse of 1/3/3. Obviously in low subscriber density scenarios, 3 x 5MHz may work as well from a quality of service perspective, but the business case may not look so good (depending on ARPU).”

Haig Sarkissian from WiMAX 2020, a provider of business and financial planning tools for WiMAX, concurs. “The amount of spectrum needed depends highly on the amount of traffic that needs to be supported on a given cell site. This is a factor of the geographic coverage area of a cell, the number of users, the oversubscription rate, the types of applications used and their throughput requirements. The ideal amount of bandwidth needed depends on the traffic model on a regional basis.”

For rural deployments with low population densities, 15MHz of spectrum would usually be sufficient. For urban and suburban deployments with high population densities, 30MHz would be necessary. Based on the traffic generated on the network, it would be desirable to have 60MHz or even 90MHz available in order to be able to expand the network as traffic demands dictate the need for additional bandwidth.

Further, the minimum amount of spectrum can also depend on whether a given operator is expanding its offering to include mobile services.

“Assuming that the target is to achieve the same quality of service (in terms of achievable peak data rate), SNR requirements for mobile application will be higher. For example, just the difference between pedestrian scenarios and full mobile (60km/h) is around 2 – 3dB in required SNR. Consequently, a higher reuse factor may be required. There are other not so obvious reasons why additional capacity may be required in a mobile scenarios (for example, a certain amount of resources may need to be reserved for handoff and load balancing). However, at this point I don’t have a quantitative view on how this will impact spectrum requirements,” said Redline’s Kevin Suitor.

Is a lack of spectrum causing quality of service issues?

According to Redline, the lack of spectrum will dictate a need for “tighter” frequency reuse and hence lower quality of service. Segmentation can be used to mitigate this problem, but then the achievable per sector capacity will be reduced and this will obviously impact the overall business case. Haig from WiMAX 2020 added, “The lack of spectrum will start causing network capacity issues as the traffic in a network increases over time. Unfortunately, for those operators who do not have enough spectrum, the only way to mitigate these issues is by adding more base stations, which is an expensive proposition.

So what is the situation globally?

Exhibit 3 clearly shows that the more spectrum owned, the more likely an operator is to deploy commercially. For instance, 66% of those who own more than 50 MHz have deployed a commercial network, while a large proportion of those who own 20 MHz or less of spectrum are either doing nothing with it or are in a trial phase to test the robustness of the network under tight spectrum conditions.

Exhibit 3: Deployment Status by spectrum ownership

Source: www.wimaxcounts.com

It will be interesting to see how much additional spectrum is acquired by 3G operators to expand their services in the next two years.

I want to thank the WiMAXCounts™ team and in particular Cintia Garza for putting this unique hard data together.

 

By Adlane Fellah, CEO and founder

For more information you can contact the author. afellah@maravedis-bwa.com

Thursday, May 15, 2008  | Permalink |  Comments (0)

Network Operator Consolidation – The Race is On!

Author: Jeff Orr, Senior Analyst - Consumer Electronics

Third generation (3G) mobile technologies are finally coming of age. Lead equipment vendors for both network infrastructure and 3G mobile devices are in place. The larger national and international carriers are circling regional 3G operators like hawks, assessing the field and identifying potential acquisition targets. New market entrants for the mobile broadband and fourth-generation (4G) services are establishing alliances to compete financially with veteran operators. A reduction in the total number of global network operators is underway. Does this optimization signal a general weakness in the service industry or a reflection of crossing into the next phase for mobile communications?

Aggregation is one method being used to thwart competitive pressures from regional operators infiltrating a local market or removing the possibility of takeover. Until recently, Brazil’s mobile operators have been dominated by regional leaders from Portugal and Spain (Telefonica’s Vivo), Italy (Telecom Italia’s TIM) and Mexico (America Movil’s Claro). Brazil's largest phone operator Tele Norte Leste Participacoes (“Oi”) announced a late April deal to buy control of smaller local rival Brasil Telecom Participacoes. The move is intended to keep mobile revenues inside Brazil by establishing a major local player. In another late April move, Freenet of Germany agreed to buy rival Debitel for EUR1.63 billion, forming the country's third-largest mobile-phone company and fending off a takeover from United Internet AG. The formation of a larger carrier entity limits the likelihood that a takeover will occur and keeps mobile service revenues in the local market.

Operators are using acquisitions and buyouts to grow their war chest in an effort to become national players in next-generation mobile networks. India’s Reliance Communications (RCom) acquired a 90% stake in UK-based eWave World, a provider of WiMAX services and spectrum license holder in several countries including China. The eWave World joint venture in China co-owns and operates 36,000 km of optic fiber across the top 30 cities in China. A nationwide Chinese broadband license has already been applied for by the JV. The telecom firm plans to invest about Rs 2,000 crore (USD500 million) over the next few years to build and acquire WiMAX networks in emerging markets. “4G WiMAX networks in 50 countries would enable us to offer services to over 75% of global population,” said Reliance Globalcom CEO Punit Garg, the global operations subsidiary of RCom. RCom’s venture capital arm also invested in French WiMAX silicon provider Sequans Communications late last year.

The trend towards fewer carriers in the emerging mobile Internet market is starting as well. After speculation about how mobile WiMAX services will emerge in the United States and capitulation on who will finance the endeavor, Sprint and Clearwire announced last week that they will merge efforts into a new iteration of the Clearwire brand. The new business accepted USD3.2 billion in investments from Google, Intel Capital, and a trio of cable operators – Bright House Networks, Comcast Corporation, and Time Warner Cable. The mega-merge occurs before the first mobile WiMAX revenues have ever been lifted from consumer pocketbooks.

Fewer operators mean fewer prospects for radio access network (RAN) equipment manufacturers. Motorola’s lengthy relationship and installed base with U.S. fixed wireless operator Clearwire could pay off in the long-term after sharing initial infrastructure deployment responsibility with Samsung for the Sprint XOHM mobile WiMAX service. Conversely, Nokia’s late entry into the Sprint build-out might relegate the vendor to device supplier in the new U.S. mobile operator. Nokia was named to provide infrastructure for multiple cities in the state of Texas with estimates of a 2008-2009 build. With Sprint’s change from network operator to lead JV partner, Nokia’s infrastructure partnership with Sprint is thrown into question.

The mobile communications industry is undergoing a transformation in preparation for next-generation mobile networks. Alliances, mergers and acquisitions shuffle the operator playing field; keeping the market guessing what hand will be dealt next. Our bet is that more of these exciting transactions will occur over the next 2-3 years.

By Jeff Orr, Senior Analyst - Consumer Electronics

For more information you can contact the author: jeff@maravedis-bwa.com

Thursday, May 15, 2008 in Business  | Permalink |  Comments (0)

Maravedis Interview with Lee Sparkman, President, Enforta

By Basharat H. Ashai, Market Analyst - Asia

Contact the author at Basharat@maravedis-bwa.com

Maravedis: What is the future of a technology like WiMAX in Russia?

I think the fixed WiMAX is going to continue to develop rapidly just because Russia as a country lacks alternative technology for broadband. But I believe mobile WiMAX services will take sometime to expand. The authorities have issued one test mobile WiMAX license to Synterra. There is no formal specification for mobile WiMAX equipment yet. The other real issue with Russia is the pricing points. The ARPU for broadband consumer, say in Moscow, is USD $18. The mobile WiMAX service today, particularly given the price of the equipment, is quite higher than what the consumers are willing to pay. The regulatory issues, pricing and availability of CPE will really slow down the mobile WiMAX. But mobile WiMAX is definitely going to be very successful in Russia in the long term just because of the nature of the Russian consumer. In our case we really do not see mobile WiMAX picking up in Russia until 2010.

Maravedis: Any other hurdles for mobile WiMAX in Russia?

There is no demand for mobility in Russia yet. It is mainly due to price points of mobile services. Russian consumers today are price sensitive and they are not buying laptops. They would rather just have a computer at home rather than a laptop. There are not very many mobile devices in Russia yet. Even Wi-Fi service has not achieved any major success in Russia. Golden Telecom has deployed a huge Wi-Fi network in Moscow. They have less than 60,000 subscribers. If Wi-Fi cannot make it as a service in Russia, one can really understand what challenges a technology like mobile WiMAX will face in Russia.

Maravedis: What are the various types of services that you currently offer over your WiMAX network?

We provide quite a lot of VPN services.VPN is very popular in Russia. We do not provide VoIP because Enforta is not a licensed long distance operator. Any voice that terminates offnet has to be terminated offnet through a licensed long distance operator. So what we do is we resell the long distance services of other companies to our subscriber base. For voice services we work with Rostelecom, Transtelecom and Golden Telecom.

Maravedis: How promising is an application like IPTV over WiMAX in Russia?

We need the mobile WiMAX because we need the unicast capability that is in 802.16e specification. We also need 20 MHz of spectrum dedicated for TV. IPTV over WiMAX is interesting. But cost is the barrier. The cost of a basic cable TV offering in Russia is USD$6 dollars a month.

Maravedis: What are Enforta’s plans for 2008?

Today we operate in 33 cities and we will be expanding to 65 cities by the end of the year 2008. So we will be covering another 32 cities by the end of 2008. We are also looking to penetrate into countries within the CIS region.

Maravedis: How much are you planning to invest in WiMAX by the end of year 2008?

The total investment in the network by the end of year 2008 will be in excess of USD$100 million dollars.

Maravedis: How many base stations do you expect to deploy by the end of year 2008?

Probably close to 1000 using Airspan, Alvarion and Infinet wireless.

Maravedis: What is Enforta’s strategy going forward?

We will consider the mobile WiMAX once we understand what the license requirements are going to be. Right now there are no mobile WiMAX licenses available in Russia. For now it would be inappropriate to begin to deploy mobile WiMAX in Russia.

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…. The complete version of the interview is available to WiMAXCounts™ subscribers only. The details include spectrum info, WiMAX subscriber numbers, subscriber split (residential & enterprise), ARPU, total base stations deployed along with breakdown by vendor and standard type, total CPEs deployed along with breakdown by vendor and standard type, competitive advantage, plus additional information.

For more information you can contact the author. Basharat@maravedis-bwa.com

Thursday, May 01, 2008 in Business  | Permalink |  Comments (0)

First Mobile WiMAX Certifications Considered a Teaser of What is to Come

By Jeff Orr, Senior Analyst - Consumer Electronics

Contact the author at jeff@maravedis-bwa.com

Twenty-seven months after the first WiMAX products achieved certification, the first Mobile WiMAX product certifications have been announced. Mobile WiMAX is the term commonly associated with products derived from the IEEE 802.16e-2005 and ETSI HiperMAN standards. These identical protocols utilize Scalable Orthogonal Frequency Division Multiple Access (SOFDMA) for portable and mobile application support. Broadband speeds (over 1 Mbps) are achieved using wider frequency channels (5-10 MHz) and improved overall performance through support for smart antenna techniques such as beamforming and multiple in, multiple out (MIMO) chains.

The first products certified for portable and mobile applications use the 2.3 GHz “WiBro” profile specific to South Korea. Four initial base stations and four mobile subscriber products have passed certification. Most countries are awaiting products using the 2.5 GHz frequency band, including Japan, Malaysia, Taiwan, United Kingdom, and United States.

The WiMAX Forum Certification Program Release 1.0 has been in place since 2005 when the program guidelines were approved for products based on the IEEE 802.16-2004 standard. The first WiMAX Forum Certified products, which started receiving approvals in January 2006, utilized this earlier specification. The test suite for 802.16-2004 contains a couple hundred procedures. 802.16e-2005 adds the ability to handoff a device from one base station to another and increases the depth of testing to about 1,000 test cases at maturity.

Certification Program Release 1.0 Wave 1 testing is the first for 802.16e-2005 products. The certification waves are incremental sets of requirements within the overall program release. Wave 1 testing for Mobile WiMAX in Release 1.0 is specific to the WiBro profile at 2.3 GHz. Wave 2 testing adds numerous additional testing requirements (namely beamforming and MIMO support) and is the focus of additional profiles including those at 2.5 GHz.

Figure 1
WiMAX Forum Release 1.0 Wave 2 Testing Roadmap
Source: M-Skylink presentation using WiMAX Forum data

Adding to the complexity of the certification process, the Wave 2 testing has been split into two Phases. Wave 2 Phase 1 testing was announced in December 2007. It contains anywhere from 42-82% of the various tests outlined for Release 1.0 Wave 2 requirements. Phase 2 incorporates all of the test procedures for Base Station and Mobile Station certification of PCT, RCT, and IOT. The on-going prioritization, reprioritization, and reclassifying of test procedures suggests that WiMAX Forum Certification Working Group is conceding how complex a program it has undertaken. Other industry certification groups have opted for less ambitious goals for this reason.

Network operators typically conduct their own testing to qualify devices on the network. The process is expensive and time-consuming. Operators would prefer to rely on a 3rd party certification and focus on qualifying devices, services, and applications. This trend is indicative of the open access movement announcement by 3G operators in 2007, which will utilize minimal device testing and place the burden of support on device and application vendors instead of mobile operators.

Only a finite number of certification profiles have been authorized for 802.16e-2005 systems. Frequency Division Duplexing (FDD) support and additional spectrum bands are desirable for future market expansion. 3G operators have existing spectrum allocations that are optimized for FDD support. WiMAX Forum member companies can submit concepts for new profiles, but the Certification Program Release 1.0 does have some limitations. It does not support FDD. An interim Certification Program release, dubbed “1.x”, incorporates FDD within its scope and is also where the 700 MHz profile will most likely emerge. Timing on the interim certification program is anticipated for sometime during 2009.

Certification is implemented through a series of approved certification labs. Labs are currently approved for China, South Korea, Spain, Taiwan, and the United States. Future lab locations include: India, Japan, and South America. A second Taiwan lab is expected during Q3’2008 to support the more than 1,000 devices forecasted by WiMAX Forum to become certified through 2011.

The process to achieve the WiMAX Forum Certified mark is more complex and time-consuming than other contemporary wireless protocols. WiMAX Forum certification labs perform radio Protocol Conformance Testing (PCT), Radio Conformance Testing (RCT), and Interoperability Testing (IOT) on each base station and subscriber station. Unlike other industry groups that provide device certification, the WiMAX Forum is unique in its approach to validate conformance to the technical standard and perform vendor interoperability tests. 3G organizations, for example, only perform testing on the devices. The Wi-Fi Alliance only tests device interoperability. The WiMAX group decided early in the organization’s foundation that it needed assurance for why devices communicated properly with each other so the first subscriber station and the 1,000th station would interoperate without requiring regression testing.

WiMAX Forum Certification is detailed in the recent Maravedis report, “WiMAX, LTE and Broadband Wireless (Sub-11GHz) Worldwide Market Trends 2008-2014 - 5th Edition”.

For more information you can contact the author: jeff@maravedis-bwa.com

Thursday, May 01, 2008 in Business  | Permalink |  Comments (0)

RACSA to reach +75,000 WiMAX Subscribers in Costa Rica by 2011.

Maravedis interview with WiMAX Operator RCSA in Costa Rica

By Cintia Garza, Market Analyst
Contact the author at cintia@maravedis-bwa.com

Radiografica Costarricense S.A (RACSA), a subsidiary of state-owned Instituto Costarricense de Electricidad (ICE) in Costa Rica, owns a nationwide license in the 3.5GHz frequency band with 100MHz of spectrum. On August 2007, RACSA awarded a contract to Alvarion for the supply of 4MotionTM solution product range to provide extended wireless access services in several major cities in Costa Rica. As of April 2008 they have installed 14 WiMAX base stations in the Greater Metropolitan Areas of Costa Rica, covering the cities of San Jose, Alajuela, Cartago and Heredia, with an initial investment of US$3 million. Commercial service plans are available for 512Kbps (29 dlls) and 2Mbps (144 dlls). The service is offered under the name of Evoluciona. The network will be capable of carrying 20,000 broadband connections. The company expects to reach 75,000 WiMAX Subscribers by 2011. Click to read the interview…         

Maravedis: What is your current WiMAX network status and development?

At this moment we are still in the implementation stage. We are currently installing 14 base stations; we expect to finalize setting up all the infrastructure in one month and a half. We initially bought 1,000 CPEs from Alvarion, because we thought the process of selling the service was going to be slow, however in the first week we sold all the CPEs. There was very good market acceptance of the technology, so we placed a new order and we are expecting to receive 4,000 additional CPEs in a couple of weeks. We have a customer waiting list of approximately 3,500 for the service.

We are quite happy since we haven’t invested in marketing campaigns or advertising. The service is selling itself, just from mouth to mouth communication. We started offering the service in urban areas, even where we have competing technologies such as ADSL and Cable. The service has been very well accepted.

After this stage is completed, we will decide on whether we will expand our network nationwide, addressing also the underserved and rural areas of Costa Rica, or if we will offer the service in the same coverage area that we have now, but with more base stations that support portability and mobility. We are looking at how the technology will evolve to support mobile services in the 3.5GHz band.

At this moment the focus is on fixed services to offer a good Quality of Service (QoS) and also have a larger number of cells. In the next step we will introduce portability; base stations will be installed every 3 - 4Km, and in the last stage (which is mobility) our base stations would be installed every 1 – 1.5km. Our spectrum in the 3.5GHz has a limitation in terms of the distance that can be reached, that’s why we will need a large number of base stations to guarantee the user speeds of 4Mbps, 6Mbps and 8Mbps in the future.

Maravedis: What growth do you anticipate by the end of the year 2008 in terms of the number of subscribers?

Our current network has a capacity to serve 20,000 users. We expect that by the end of the year we could reach some 8,000 subscribers, or probably more. The main limitation for us is the time required for installation. At RACSA, we have 10 installation teams, each team can install two or three CPEs per day; we will definitely need a larger staff and number of technicians to satisfy a bigger demand.

Maravedis: Talking about the CPEs, every operator is adopting a different strategy to deal with the high cost of the CPE. What is the current cost of the CPE and how much do you anticipate this cost could decrease? What strategy are you following to offer the CPE to your clients?

Currently the cost of the CPE is around US$500. We expected the cost of the CPE would decrease faster, but the decrease has been slow. We expect the cost of the CPE by the end of this year could reach the US$300 – US$350, but the hope of the CPE at US$100 is something that will not occur in the short term. The final user has the option of buying the CPE or paying a monthly fee for the use of the CPE. We are charging US$6 a month.

Maravedis: And in which cities or areas are you commercial with WiMAX?          

In the Greater Metropolitan Areas of Costa Rica, which consists of 4 provinces: San Jose, Cártago, Alajuela and Heredia.

Maravedis: Could you please describe the service plans that RACSA is offering?

Yes, we are offering 3 services plans:
Evoluciona Basic: Speeds of 256kbps/512Kbps at US$29.
Evoluciona Plus: Speeds of 1Mbps/512Kbps at US$74
Evoluciona Premium: Speeds of 2Mbps/1Mbps at US$244

These prices do not include the rental of the equipment, which is around US$ 6-7 per month, plus installation fee of US$100.

Maravedis: Are you planning to partner with other equipment vendors when you offer mobility?

Yes, actually the contracts to equipment vendors are awarded by a beauty contest process. In our first stage we awarded the contract to Alvarion, and we recently extended this contract for additional US$1 million to buy new CPEs. Our law allows us to partially extend the contracts with our equipment vendors for up to $US1 million. If we want to sign bigger contracts we need to incur in another beauty contest. We are currently having talks with Alvarion, Aperto, Motorola and other equipment vendors for the next contract to offer mobility.

RACSA chose Alvarion solution with TDD (Time Division Duplexing) with the capacity to manage fixed and mobile systems. Through a software upgrade RACSA will be able to migrate the fixed subscribers to mobile. We expect to use this software upgrade during 2009; we are just waiting for the mobile equipment to be available.

Maravedis: I was reading the notes of an interview you previously had with Telesemana where you commented you expected to reach some 75,000 WiMAX subscribers in 4 years. What will be your strategy to reach this target and to accelerate the subscriber growth?

The strategy is to use a “Fideicomiso”. Under the Fideicomiso we will start an agreement with an International Bank. We will provide them with the network specifications and they will finance the project, they will buy the infrastructure and they will install the network. RACSA will just act as an administrator. The Bank will also select the equipment vendors.

Maravedis: Are you addressing the residential segment, the business segment or both?

Initially, our idea was to offer the service to the SME and SOHO; however we have experienced a great demand from the residential segment. We still offer the service to both business and residential users; however the split right now is around 95% residential.

Maravedis: Besides Internet access, which other applications are you offering or planning to offer in the future?

We are currently offering VPN services to SME. We are about to start some trials with voice and we will be eventually offering VoIP….

The complete version of the interview is available to WiMAXCounts™ subscribers only. The details include spectrum info, WiMAX subscriber numbers, subscriber split (residential & enterprise), ARPU, total base stations deployed along with breakdown by vendor and standard type, total CPEs deployed along with breakdown by vendor and standard type, competitive advantage, plus additional information.

For more information about this an other WiMAX Operators, please visit www.wimaxcounts.com

For more information you can contact the author: cintia@maravedis-bwa.com

Copyright © 2007 by Maravedis Inc. All Rights Reserved.

Wednesday, April 16, 2008 in Business | Deployments  | Permalink |  Comments (0)

CTIA Device Announcements Set Pace for 2008

Sprint added its first EV-DO handset, a pair of Sanyo radios for its push-to-talk offering, and announced four additional devices for the upcoming XOHM mobile WiMAX service.

By Jeff Orr, Senior Analyst - Consumer Electronics
Contact the author at jeff@maravedis-bwa.com

The month of April kicked off CTIA Wireless 2008, the annual spring gathering of the North American mobile communications industry to discuss progress and show off the latest wares. Several compelling devices were announced at this year’s show.

Sprint added its first EV-DO handset, a pair of Sanyo radios for its push-to-talk offering, and announced four additional devices for the upcoming XOHM mobile WiMAX service.

The biggest announcement for Sprint was the Samsung Instinct. The touch-screen handset will launch in June on the operator’s EV-DO rev.A network, which is touted as covering more than 15,000 cities and nearly 1,500 airports. Samsung Instinct boasts GPS-based location services, Sprint TV, visual voicemail, corporate and consumer (POP3) email support, multitasking capabilities, a 2.0 megapixel camera with camcorder and expandable microSD memory of up to 8GB. Additional features include stereo Bluetooth 2.0, an integrated world clock, SMS voice and text messaging with threaded text, Phone as Modem, picture caller ID and Sprint Mobile Sync. Device pricing has not been determined, but an unlimited data plan at $70/month is required.

Sanyo introduced two push-to-talk handsets – the PRO-200 and PRO-700. Leveraging Qualcomm’s QChat technology, the Sanyo radios ride on the Sprint EV-DO rev.A network. Both units will debut on the Nextel Direct Connect service this month and range in price from $50~$70 with a two-year contract.

Four additional devices were unveiled for the upcoming Sprint XOHM mobile WiMAX network: Nokia’s N810 Internet Tablet WiMAX Edition, the Everex Cloudbook MAX embedded laptop PC, and an Ultra Mobile PC and PC Card from Samsung. The long-awaited Nokia N810 tablet will be available during the first half of 2008. Place-shifted control of TV and video content for the Nokia N810 family debuted from Monsoon Multimedia and its HAVA player. Everex intends to embed WiMAX wireless capability in an Ultra Mobile PC (UMPC) powered by VIA’s C7 processor. The new CloudBook Max has mobile WiMAX capability at 2.5 GHz from GCT Semiconductor. Samsung Telecommunications America announced the mid-year availability of the Samsung E100 PC Card and the fall availability of the Samsung Q1 Ultra Premium Mobile PC. The devices will operate exclusively on Sprint’s XOHM mobile broadband Internet network.

Microsoft released the Windows Mobile 6.1 platform, an enhancement to the 6.0 version that alleviates several customer complaints about the mobile OS. Partners at launch include: Alltel Wireless, Amoi, AT&T, ASUS, E-TEN, GIGA-BYTE Communications Inc., HP, HTC Corp., i-mate, Intermec Inc., MiTAC International Corporation, MobileXP Technology Co., LTD, Motorola, O2, Orange, Palm Inc., Pantech, Samsung, Sony Ericsson Mobile Communications, Sprint, T-Mobile USA Inc., T-Mobile International Inc., T-Mobile Germany, TechFaith Holding Limited, TELUS, Toshiba, Velocity Mobile, Verizon Wireless and Vodafone.

Already available in other countries, HTC introduced the Touch Dual to the US market. The Touch Dual features a touch screen, slide-out keypad, Windows Mobile 6.1, and a pair of cameras – a 2 megapixel camera for photos and video capture, and a second camera for video calls. Quad-band GSM/GPRS/EDGE (850/900/1800/1900MHz) and HSDPA (850/1900MHz) connectivity are available. The Touch Dual will initially be available through US electronics retailer Best Buy.

Terrestrial mobile communications are not the only game in town. Mobile Satellite Ventures (MSV) plans to launch two satellites in 2009 that provide an alternative connection for mobile users who frequently travel outside cellular voice coverage. The company’s L-Series satellite phone won’t be available until 2010, but the hybrid satellite/cellular system is expected to emerge with a US-based cellular carrier selling the new service. The L-Series will feature: a 320x480 multi-touch screen; high-speed Internet access with Wi-Fi, cellular, and satellite connectivity; a web camera; and a speakerphone. The most amazing part will be the phone thickness of only 15mm, unheard of in previous satellite phones. A ruggedized R-Series is also being planned.

Motorola’s DH02 Mobile TV device adds to a portfolio that saw announcements at CES and Mobile World Congress earlier this year. The new device features a touch screen user interface and includes a HSDPA/GPRS back channel. Based on the DVB-H mobile TV standard, the device incorporates a GPS for personal navigation and PVR capabilities to enhance the TV viewing experience.

The Advanced Wireless Services (AWS-1) auction concluded in September 2006. AWS handsets appeared at CTIA from Samsung and UTStarcom. AWS spectrum owners, including the Cricket service from Leap Wireless, now have sufficient devices to start offering services. T-Mobile will start offering 3G services later this year utilizing AWS spectrum. The national carrier plans to use a Nokia GSM/UMTS phone amongst others.

What device activities didn’t happen at CTIA this year? XOHM didn’t launch and slipped to later in the year. 700 MHz spectrum winners remained under gag orders not to discuss specific plans. Many attendees hoped that new devices would be announced to overthrow the market buzz created by last year’s iPhone introduction.

While none of the introductions at CTIA Wireless could be classified as market altering, progress continued towards smarter and more capable devices across multiple swaths of spectrum.

For more information you can contact the author: jeff@maravedis-bwa.com

Wednesday, April 16, 2008  | Permalink |  Comments (0)

The Role of WiMAX in the Municipal Network

Municipal wireless has received a bad name after aborted attempts to launch city-wide Wi-Fi services, primarily in the US. Not since enterprise IT managers learned of vulnerabilities in early Wi-Fi security protocols did such a stigma hover over the wireless industry

By Jeff Orr, Senior Analyst - Consumer Electronics

Contact the author at jeff@maravedis-bwa.com

Municipal wireless has received a bad name after aborted attempts to launch city-wide Wi-Fi services, primarily in the US. Not since enterprise IT managers learned of vulnerabilities in early Wi-Fi security protocols did such a stigma hover over the wireless industry. The lack of a sound business plan, not the technologies, is the primary issue with municipal wireless.

Operators who survived the free Wi-Fi hype are augmenting business plans for municipal services. Edge services such as Wi-Fi are being deployed where existing network infrastructure is already in place rather than building entirely new networks. The emergence of WiMAX products could trigger resurgence in microwave systems to enhance the communications capabilities and operating efficiencies of local government.

The use of broadband wireless systems is not new. Municipal governments have been utilizing these technologies for decades to connect facilities and provide business continuity. The value of emerging standards-based, point-to-multipoint systems include:

• Less network infrastructure – reduced complexity; fewer suppliers to manage; time to market

• Lower-cost infrastructure – recurring monthly telecom charges shift to greater percentage of investment on applications and services

• Deployment flexibility – a connection may not exist today, but could be installed next week or on an on-demand basis

• Create direct WAN connections to business users – enforce security, quality and service level agreements, instead of using a best-effort LAN service

Applications for WiMAX equipment in the municipal network include fixed infrastructure and emergency response. Facilities, agencies, and services connect using microwave in place of or in addition to leased copper and fiber optics circuits. Dynamic networks are possible for use as a command center, during disaster recovery and video surveillance projects. The network is easily disassembled when done for redeployment at the next site.

Azulstar, a wireless ISP and pioneer in city-wide Wi-Fi networks, recently announced the addition of WiMAX to its bag of cost-reducing tricks. “WiMAX dramatically improves the economics, performance and reliability of municipal wireless,” said Tyler van Houwelingen, Azulstar founder and CEO. The service provider operates networks across 15 cities in the mid- and southwest US including Grand Rapids, MI and Albuquerque, NM. Grand Haven, MI is the first to undergo the upgrade to WiMAX. Radios from Airspan Networks and Redline Communications will replace leased T-1 circuits and enable direct connections to business customers instead of best-effort Wi-Fi service.

US service providers see value in the recently opened 3.65 GHz and underutilized 5.4 GHz frequency bands. The 3.65 GHz allocation operates under a light-licensed program from the FCC. Redline and Airspan were the first two equipment vendors to receive regulatory approval to sell products in this band, with more vendors expected to enter the race during 2008. These products are based on IEEE 802.16-2004 or 802.16e-2005 technical standards; however no official WiMAX Forum certification profiles for 3.65 or 5.4 GHz exist. Product interoperability amongst vendors is not expected.

An opportunity for equipment manufacturers is to continue radio integration into simpler solutions. Airspan Networks offers a WiMAX subscriber station with a Wi-Fi access point built in. Proxim Wireless took this even further by combining a WiMAX subscriber station, a Wi-Fi mesh radio and an access point into a single enclosure. This convergence reduces the number of boxes mounted on a lamp post, while increasing deployment flexibility. Additional standards are in development to help in designing municipal networks. Future mesh products will likely incorporate the IEEE 802.11s standard, while the 802.16j committee is looking at relays for similar applications using WiMAX air protocols.

WiMAX technologies are complementary to Wi-Fi and cellular in the municipal network. Initial stand-alone vendor solutions are giving way to increased integration between the last mile and edge of the network. Over time, as mobile WiMAX and IP-centric mobile communications protocols including LTE become more widely available, one can argue that these connections could obviate the need for outdoor LAN technologies all together. Whether providing a complementary solution, offering higher integration and cost-savings, or a complete alternative to LAN technologies, WiMAX has an increasingly important role in the municipal wireless network.

For more information you can contact the author: jeff@maravedis-bwa.com