Clearwire-Sprint Deal: Why the Who’s of Who’s are Investing in WiMAX

While the business world has been buzzing about the Microsoft-Yahoo talks, the big news for WiMAX fans is the Sprint and Clearwire deal. More details on the financial and commercial agreements are provided in this article.

Sprint and Intel both already had much invested in the success of WiMAX technology but the reasoning behind the cable companies and Google’s involvement is being questioned by some.

So why are these companies investing in WiMAX technology?

Comcast and Time Warner have been feeling the pressure from Verizon and AT&T who have been forcing their way into the television industry by providing video through your phone line. Verizon is attempting to lay fiber all the way to the home, or close to it. AT&T is laying fiber to the ‘node’ and relying on current wires to carry video signals to consumers’ homes. By helping the growth of WiMAX, Comcast and Time Warner would be funding an alternative wireless offering. Having a hand in mobile broadband technology could also help the cable companies compete in the ongoing battle for our living rooms. The triple play (phone, internet, and television) offering is no longer enough. CE, PC, console game, networking equipment, phone, and cable companies are trying to take over home media not only because of the huge potential to sell a complete ecosystem of products, services, and content but also for fear of being shut out.

Google is rumored to have been reluctant to enter the deal particularly because the WiMAX offered by Clearwire is currently just fixed wireless broadband. The company had to promise a future in building a mobile wireless solution for Time Warner, Comcast, and Google to put up the money. Obviously bringing broadband internet to mobile devices would mean more time spent on the internet and possibly more time spent on Google, Gmail, or YouTube. But mobile broadband also means more mobile devices which would, hopefully for Google, operate on the Android operating system that was launched by Google back in November 2007.

It will be interesting to see where this deal takes us.

Ari Zoldan

Launch 3 Communications

Monday, May 12, 2008 in Business  | Permalink |  Comments (0)

It’s Official! Sprint and Clearwire Complete Major WiMAX Deal

With the help of several blue chip investors Sprint and Clearwire announce a planned nationwide WiMAX company.

Today we gain confirmation that blue chip investors Intel, Comcast Corporation, Time Warner Cable, Google and Bright House Networks have pledged $3.2 billion in the formation of the new company to be known as Clearwire. The combined company will be helmed by Ben Wolff as CEO with Barry West serving as President. Wireless industry veteran and Clearwire Chairman Craig McCaw will continue in that capacity. And this time ladies and gentlemen the deals are signed and there is real money on the table. This is big news for the industry without a doubt.

Trilogy Equity Partners has agreed to invest $ 10 million in Clearwire common stock. Sprint will control a 51 percent stake in the combined venture with existing Clearwire shareholders to receive somewhere around 27 percent ownership of the new firm. The new investors will control a 22 percent share of Clearwire. The company also announced a number of wholesale re-sale MVNO agreements amongst themselves. Sprint will be able to sell its 3G products across the platform and the other partners will be able to leverage it as well.

The deal will have to pass regulatory approval but it is based upon a $20 price for Clearwire stock.

Sprint on a conference call today announced that it alone had 28 billion MHz/POPs of position in the 2.5 GHz spectrum range and the combined company will have over 40 billion MHz/POPs, which it believes is the largest single spectrum position of any carrier in the industry.

The company's deployment target is to cover 120 to 140 million people by 2010.

One thing I find very interesting in this deal is the potential for further alliances amongst these players. It is important to remember that Comcast Corporation for example already owns a significant spectrum footprint in the AWS spectrum range at 1.7/2.1 GHz range. This range currently has no WiMAX profile or appreciable traction in the band. One wonders if there is a potential for Comcast to leverage this spectrum into the deal at a later date. Also Google and AOL have been in talks to collaborate and certainly this could potentially leverage the AOL brand to resurgence on a new leading edge broadband network.


Tim Sanders

The Final Mile

 

Wednesday, May 07, 2008 in Business  | Permalink |  Comments (4)

A Sprint Clearwire Deal is Rumored to be Very Close

Early reports indicate that Sprint and Clearwire could announce a WiMAX deal as early as Wednesday of this week.

I had read reports that the deal was struggling over who would control the company. And I assumed it was between Sprint and Clearwire in terms of control, but it appears from a report in Fortune's Techland section that Google may have been the holdup. It appears that, for whatever reason, Google has struggled to decide whether to lend its name to the deal backing out and then recently coming back in. For their part the carriers would certainly want to enjoy the coattails of Google's name attached to the project.

Is this a big deal? Heck yeah it is---if it gets done. So what are the details? Well, at this point we don't have much. But it appears the deal would include Comcast and Tim Warner Cable as well as Intel (for funding) and Google (also for funding and name recognition).

I think the Google component is really large even though for it choosing a platform and participation in a wireless venture could close some doors for them with other carriers as they would effectively become a de-factor competitor. Still, Google's market value is super strong even in this economy and I would look for that to not significantly affect their deal making abilities with other carriers. After all we are talking about (one supposes) only an investment position here.

Will this happen? Who knows at this point, but some answers might be forthcoming tomorrow.

Tim Sanders

The Final Mile

Wednesday, May 07, 2008 in Business  | Permalink |  Comments (0)

Increasing US Broadband Wireless Speeds Magnify Backhaul Issues

As the growth in US broadband speeds push wireless carriers to faster services adequate backhaul to cell sites becomes a major issue.

An article by Unstrung covers the backhaul conundrum for broadband wireless carriers and raises good questions. As the article notes, Sprint recently blamed part of the slowdown in the launch of its Xohm WiMAX network on inadequate backhaul issues. Going forward, expect to see this issue to become one of increasing importance to the industry.

As I recently blogged, the consumer demand for broadband is rapidly increasing both on the wireline and wireless side. And as carriers of all types strive to meet this need it is clearly raising the bar for what defines adequate backhaul.

Wireless carriers are driven by a need to turn faster speeds into new revenue sources and this need is intersecting some older technology at the cell site level---namely the preponderance of T1 circuits that carriers have used to feed these sites. For voice traffic this solution has been more than adequate, but when carriers are saying that their customers will soon demand 100 Mbps circuits that quickly outstrips the capacity of physical backhaul to sites.

In the US the problem has been further magnified due to our dependence on copper backhaul versus fiber or microwave. In Europe the E1 (The US T1 equivalent) has long been more expensive so carriers have already transitioned more to microwave. In the US major carriers seem to be coping, but to date no one except Sprint has tried to roll out a high bandwith service such as Xohm. Sprint is uniquely vulnerable as approximately 80 percent of its backhaul is based upon copper.

So what does all this mean? More trouble for consumers and carriers. Well maybe, but we do have some time to fix it and never fear the bigger cities will always be addressed first so most people will get fixes pretty quickly. What I see here is opportunity for microwave carriers even in rural areas to offer backhaul services to cellular companies. Here is a market niche guys---go get it.

Tim Sanders

The Final Mile
 

Saturday, May 03, 2008 in Business  | Permalink |  Comments (0)

US Broadband Speeds are on the Increase

Not only has the US lagged behind much of the world in terms of broadband adoption but in speed options as well---but that seems to be changing.

An interesting article in the Washington Post reports on a recent and welcome trend in the US for carriers to increase broadband speeds. The US has long been reputed to lag behind many industrialized nations in terms of its percentage of broadband penetration. So too have we suffered much slower service speeds than other parts of the world such as Japan where a 100 Mbps connection is readily available.

In recent research I completed for Maravedis on the US market many carriers both large and small reported that they expected customer demands for broadband to soar in the next five years ("Opportunities and Challenges for WiMAX & Broadband Wireless in the USA-1st Edition"February 2008). One regional carrier stated that it expected its residential customers to want 100 Mbps connections within the next five years. Even AT&T has publicly stated that it was surprised at how much bandwidth use increased once its video based iPhone gained traction.

Clearly US demand is there and it appears that carriers are rolling out services to meet these needs. AT&T and Verizon and vigorously deploying fiber optic based broadband solutions. Major Cable companies are moving to increase service and DSL is getting faster and cheaper. But for the time being availability is limited; and rural areas are mostly still being left behind. In fact some rural areas still have limited or no broadband options beyond satellite broadband.

But the trend augers well for the future and we are seeing speeds of 12-20 Mbps being deployed by DSL providers and Comcast has deployed one market with 50 Mbps service and claims plans for 100 Mbps service in two years with 160 Mbps to follow.

Unfortunately in my home market the local cable company has eliminated 3 Mbps service in order to charge more for its new minimum 5 Mbps service. I can even get 10 Mbps if I want to pay a lot. I don't even have DSL coverage in the city limits and we haven't seen a whiff of 3G wireless. Small town (75,000 population) blues.

Tim Sanders

The Final Mile

Saturday, May 03, 2008 in Business  | Permalink |  Comments (0)

WiMAX Forum Announces Second Applications Lab

U.S. facility at University of Maryland complements Taiwan proving grounds for application development and testing.

The WiMAX Forum announced it has added the University of Maryland's MAXWell Lab as the second applications lab. The MAXWell Lab complements the M-Taiwan lab in Hsinchu, Taiwan announced last October. The applications labs are designed for academic and corporation entities to develop and test new WiMAX applications.

The MAXWell Lab will support application testing in a real-world environment at a technologically neutral site. The initial focus of the MAXWell Lab, which is part of the University of Maryland Institute for Advanced Computer Studies, will be location-aware applications. For example, with the upcoming deployments of WiMAX in the Washington D.C. area, the Maryland-based MAXWell Lab becomes a natural sandbox to test applications which will run on that system.

"With a community of some 45,000 people at the University of Maryland, this is going to be a unique facility because of the size of the potential test bed and large number of live users," said Ashok Agrawala, director of the MAXWell Lab and professor of computer science. "Our students, in collaboration with professors, industry leaders, and WiMAX Forum members, will use the new lab to develop breakthrough applications and services, most of which we cannot yet imagine."

In addition to the North American MAXWell Lab, the WiMAX Forum endorsed the M-Taiwan WiMAX Application Lab in October. The Taiwan lab test new WiMAX applications covering categories such as Voice over Internet Protocol and entertainment.


By Jeff Orr

ORR Technology, LLC


 

Friday, May 02, 2008 in Business  | Permalink |  Comments (0)

What Questions to Ask When Choosing a 3.65 GHz Vendor

Now that 3.65 GHz radio gear is available what questions do carriers need to ask to find the right vendor?

I have certainly been a big proponent of the 3.65 GHz space now that radio gear is starting to emerge. I really think this could be a very useful band for carriers. The band allots a bit more power than traditional unlicensed band spectrum which offers the potential of some modest non-line-of-sight capability with good bandwidth.

But like most things the devil is in the details; and since we don't have radios in this spectrum with a lot of history in the US, how do carriers decide which vendor is right for them. Well, I won't attempt to give some homogenous answer because I think the choice will vary depending on the carrier's needs. But there are some basic questions you can ask to help you decide.

First covering some basics about 3.65 GHz helps. The FCC chose to define the band to allow a maximum of 1 Watt per MHz for base stations and outdoor CPE units at the customer site. The indoor portable/mobile unit is limited to 50 milliwatts because this is still technically a shared use band and the FCC wanted to limit interference from more mobile applications. The intent here it seems to me is to define a mostly fixed wireless play. This is no judgment on whether or not Mobile WiMAX or Fixed WiMAX technology would be best as both can be configured for this spectrum. Also WiMAX technology was blessed for the lower 25 MHz of the band and the top 25 MHz requires a "contention protocol" system for approval.

So what are the questions? The first for most carriers would probably be price, but I would argue that should be a question for near the end of your list. Price is critical, but if gear doesn't meet your customers' needs otherwise cheap doesn't help.

It appears that each vendor so far has made different choices in how to implement a solution. The NTIA has certified products from three vendors, Redline, Alvarion and Airspan. The three vendors have partially chosen different channel sizes. So your first question is what are these? If you have an application that needs a 10 MHz channel size a 3.5 MHz or 5 MHz or 7 MHz channel pattern may not work. Conversely the vendors were certified with different amounts of overall bandwidth, the amount of which is clearly another question you need to ask.

Also too, all three vendors appear to have only gotten their products certified for the lower 25 MHz of the total 50 MHz available---at least for the time being. When the FCC blessed WiMAX radio systems it did so in the lower 25 MHz. I believe Airspan has said that its solution will work in the upper 25 MHz portion (contention protocol section) as well, but so far as I can determine it has not been certified by the NTIA in that portion as of yet.

The amount of power that each vendor has been approved for appears to vary as well depending on their channel size, technology implementation and other criteria. This will affect NLOS performance. One vendor told me that in a heavily forested and hilly area like Asheville, NC where I live NLOS performance might average .8 to .9 mile, but that a more urban and less forested market like Atlanta, GA might achieve 1.2 to 1.3 miles of NLOS performance on average. Like with most things wireless there are tradeoffs so ask your vendor what their approved power allotments are.

Another thing to consider is the future so ask a lot of questions about potential interoperability (and vendor plans to achieve it) across the three vendor platforms as well as other technologies and spectrum ranges. There is, it seems to me an opportunity in the next couple of years for 3.65 GHz operators to potentially interoperate and roam across each other's networks. Now having said that mobile devices have a power limitation that could be a minimal opportunity, but it is more potential than non-licensed players have had before.

Are these the only questions to ask? Absolutely not. These are just a few of the first basic ones to ask. Each vendor's value proposition goes far beyond these basic elements. Obviously the real test is in the field. And trying out a solution from each, if that is something your carrier can afford to do is probably the best way to see how they actually perform. Have fun!


Tim Sanders

The Final Mile

 

Friday, May 02, 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)

Irish Broadband sold to Imagine Communications

The merged wireless venture is expected to gain a EUR7 million investment and plans for a nationwide WiMAX rollout.

Broadband and fixed wireless operator Irish Broadband has been sold to Imagine Communications for an estimated EUR47 million (USD73 million). Sources at Imagine say the resulting entity will have annual revenues of more than EUR100 million. As part of the deal, NTR and Kilsaran Concrete - the previous owners of Irish Broadband - have secured a 25% stake in Imagine and plan to invest EUR7 million into the resulting organization.

Imagine Communications provides fixed line, broadband and other telecoms services in Ireland under its Access, Cinergi, Gaelic Telecom, and Imagine brands. The company also maintains offices in the Netherlands and the US. Imagine's management is contemplating the use of Irish Broadband's network and spectrum assets to spread WiMAX technology across the Republic. Irish Broadband currently services over 50,000 residential and business customers.

A ComReg ICT Consumer Survey for Q4'2007 found that Irish Broadband was the most popular internet service provider in Ireland, after Eircom. The February 2008 report indicated that Irish Broadband ranks second only to Eircom in terms of residential share, having cornered 8% of the home market. Irish Broadband doubled its market share over the previous year and accounts for 17% of the Dublin market. Conversely, Eircom dropped 21% residential market share over the same period.

Irish Broadband offers 2-3 Mbps fixed wireless data and phone services for home users with 3-4 Mbps options for business customers. The operator has deployed both Cisco (formerly Navini Networks) and Alvarion point-to-multipoint radios and Harris Stratex microwave systems for point-to-point applications.

Clearwire Ireland is a fixed wireless competitor to the Irish Broadband/Imagine Communications venture. Clearwire currently offers service across Bray Carlow, Cork, Drogheda, Dublin, Dundalk, Galway City, Maynooth, Naas, Newbridge, Swords, and Waterford City.


By Jeff Orr

ORR Technology, LLC

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