One of the surprises of recent months has been the robustness of the market for proprietary broadband wireless access systems. A year ago it was widely assumed that sales of these systems would be in freefall as customers waited for WiMAX certified products, and that traditional vendors would have a difficult transitional period to face before full WiMAX gained traction. For all the talk of WiMAX-ready and pre-WiMAX offerings, operators that want 802.16 generally did not want a halfway option, they wanted to wait until standards-based economics and volume cut in.

On the other hand, there is a growing group of service providers whose interest and confidence in broadband wireless has been raised by the talk about WiMAX, and particularly by the future prospect of low cost, interoperable CPE, but which do not have an urgent need for standards in the base station. In a fixed wireless roll-out, standards are clearly less important than in nomadic networks, except insofar as they drive costs down and support laptop users.

But a world where people roaming on to a fixed wireless network will have WiMAX in their laptop or smartphone is still a couple of years away, and in the mean time, the need to support visitors through self-funded CPE can be achieved with a Wi-Fi front end support. And on the cost side, the interest in broadband wireless that WiMAX has created, and the new competition that has arisen, have already driven down prices even on proprietary kit.

Growth in fixed wireless systems:

Most of the wireless DSL vendors report the same phenomenon. Motorolas proprietary 5GHz low footprint system, Canopy, has experienced its highest ever sales growth in the past six months, driven by its falling costs (the $200 CPE is now promised) and flexibility of installation, as well as the reassurance that it can be integrated with Wi-Fi mesh products for metrozone application, or in future, work with WiMAX CPEs. This makes Canopy a system with a wider range of applications, and more futureproofing, than BWA technology typically offered in the past.

It is particularly important that the proprietary platforms stay strong in the 5GHz license-exempt space, and that they offer some form of future roadmap, since there will not be certified WiMAX products in this band for possibly another year and longer for 802.16e. The mobile support of e will never be relevant in 5GHz, but its spectral efficiency and other advantages may be however, work on this band for the e standard will be overshadowed by the race for the big licensed bands, 2.5GHz, 2.3GHz, 3.5GHz and the emerging 3.3GHz. In license-exempt territory, then, 5GHz is likely to be the poor relation in WiMAX developments, but it is also an area where, because it has no mobile potential, a well priced proprietary solution combined with Wi-Fi can support a strong business model.

Airspan and Alvarion:

Even in licensed bands vendors are seeing their proprietary offerings holding up strongly. Airspan has a roadmap to transform all its business from proprietary to WiMAX (except in non-WiMAX bands, such as 700MHz, where it is one of the rare suppliers). But it admits it must not rush this process and throw out the baby with the bathwater. The proprietary lines are doing surprisingly well. The economics are improved and the promise of WiMAX gives a new confidence after the disasters of the past, commented head of marketing and product management, Paul Senior. He noted that, quite bizarrely, the proprietary WIPl range had set a new record in the fourth quarter. Again, it offers better options than many pre-WiMAX offerings in the unlicensed bands as it is available in 27 frequencies, and has strong anti-interference mechanisms.

Alvarion went so far as to delay certifying its BreezeMAX 3.5GHz system for WiMAX until it felt the functionality included in the official certificate would match that of the pre-standard product. Head of marketing Carlton ONeal said last year that releasing an officially certified product in the first wave of testing which focuses only on the air interface - would create false expectations among existing BreezeMAX customers. Since the market is still largely wedded to the linear progression image of WiMAX evolution, there is a widespread assumption that the first WiMAX Forum Certified products will be a step ahead, in functionality terms, of current pre-certified offerings.

We have 130 customers for BreezeMAX, said ONeal. We are working on release 2.5 of the software, which includes the capability to enable the self-installed indoor CPE. That is what the customers want first and we wont delay that to prove we can work over the air. Also, wave one will not have the functionality level we are currently offering in BreezeMAX. Customers will want certification but they will expect that to equate to release 3.0, which is coming next year. In other words, the standards will not catch up with real world, pre-certified equipment in terms of scope until the first half of 2006, with wave two, the first to test real commercial functionality, and wave three, which extends that to the vital systems with indoor, portable CPE.

Senior is taking a similar line with 802.16e and said Airspan will not seek certification until that process enters its second wave, likely at the end of this year. Were afraid that, in wave one, people will basically test Wi-Bro and this will not be head and shoulders ahead of HSDPA and there will be disappointment. Wave two will have the bells and whistles and will be impressive, with a far lower cost for a laptop card than HSDPA, plus USB devices. Alvarions revenues fell year-on-year in 2005 but this was largely the impact of reduced orders from its largest customer, Telmex, rather than the feared product transition downturn. 20% of its revenue now comes from BreezeMAX.

In summary, the long despised fixed broadband wireless market has undergone a renaissance largely driven by the interest and confidence WiMAX has instilled, but not wedded to the WiMAX technology. We would expect the proprietary platforms to continue to thrive, provided they can support a Wi-Fi client when seeking to address metrozones and other areas where DSL is built out. This shows that there is a genuine demand for BWA, which has not been killed by the long wait for WiMAX products, but diverted to a proprietary-plus-Wi-Fi approach that supports standards-like economics. This will be good news for the BWA vendors, but increase the already strong focus of the WiMAX efforts on mobile systems and licensed bands.

This article originally ran in Wireless Watch, a publication of Rethink Research. Reproduced with permission. For information on the weekly Wireless Watch Newsletter and other Rethink Research products and services, click here.