Andy Fuertes and Larry Swasey
Visant Strategies
www.visantstrategies.com

802.16 has undergone a fundamental shift in perception since the first specification was approved more than three years ago. The incipient standard has gone from being a largely invisible "fixed" wireless standard to a now omnipresent future mobile specification.

We will assess the paths and chances of success for mobile WiMAX and shed light on recent mobile trends.

The Heart of the Matter
Our first task in doing so requires us to ask a fundamental question: why would major carriers choose to abandon their existing migration paths in favor of a new and untested mobile standard? After all, many carriers have invested substantial sums in their existing GSM/GPRS/EDGE, WCDMA/HSDPA, and CDMA2000/EVDO infrastructure in networks that can be upgraded with varying degrees of investment.

Why
The quick answer is to get to IP. Although major mobile standards are evolving to an all IP core network and IP friendly air interface they are doing it at a leisurely pace. Major mobile carriers seek an IP-based network to accelerate application development and to reduce costs while enhancing network manageability, especially in cases when the carrier operates land line or cable TV networks as well. The move to I/P will also comparatively reduce overall operating and capital expenditures.

OFDMA, the air interface of choice for 802.16e, is the other reason carriers are interested in WiMAX as it is believed to offer a more efficient transport mechanism than CDMA variants for bursty internet and data transmissions, which at some point will become the norm. Carriers want these features sooner as opposed to later. 

Who and Where
Existing and future holders of 2.5 GHz spectrum must be considered the primary long-term target for mobile WiMAX due to certification of product for that band and due to the bands mobile friendly attributes. Today, this spectrum is held by Sprint in the United State and various carriers in Latin America, where it is often allocated for fixed use. It is poised for release in Europe, though it may not be open for WiMAX there, and other regions are likely to follow. The band could very well become a global broadband wireless allocation for mobile services. The downside here is time. Even Sprint, arguably the furthest along, continues to test solutions with no end in sight and others are still waiting for auctions.

The 700 MHz spectrum holders, especially in the US where the spectrum will soon be auctioned, represent another strong opportunity for mobile WiMAX and perhaps the strongest near-term mobile opportunity. The lower frequency results in longer range from the base station compared to a system, for example, operating at 2.5 GHz or 3.5 GHz.

From an operator perspective that means using fewer than one half the number of base stations as would be required in those higher bands and the corresponding lower capital expenditures that comes with fewer deployments. In short it is a band where new operators could make a mark and a number of powerful and financially endowed parties are at least interested in doing so, including cable operators, power companies, landline carriers and even tower companies.

Although the economics of mobility are quite challenging at 3.5 GHz, this band must also be considered a primary target for mobile WiMAX equipment. 802.16e offers superior performance for fixed wireless compared to its predecessor and that makes it the likely candidate for deployment in the 3.5 GHz band, which is available throughout the world. Regulation often prohibits mobile services in these bands but portable or nomadic services are a different matter. In addition, these bands are often already being used sparsely for fixed services. That provides the WiMAX industry and operators alike with a grow-as-you-go organic coverage model that can expand into services beyond basic fixed wireless.

How
We've offered a glimpse of this above. There are ultimately two main paths for deployment of mobile WiMAX: from the top down and from the bottom up. The former requires major mobile carriers to adopt and deploy WiMAX. In other words they have to abandon existing migration paths. Even with the WiMAX large corporate backers, this is a low probability exercise. Major mobile carriers, especially those with substantial deployed infrastructure are risk adverse and unlikely to jump ship. Existing GSM/GPRS, EDGE, WCDMA and CDMA equipment vendors will surely offer competitive alternatives.

The second path is from the bottom up. Here momentum and sales are created by lots of moderate sized deployments in emerging regions such as Asia, Eastern Europe and Latin America and occasionally by selling to competitive and likely niche operators in the US, Japan, or even Western Europe. This is the more likely path for mobile WiMAX success and commercialization and its one which will be required if WiMAX start ups are to survive; waiting for a large contract from a mainstream mobile operator is one of the most common causes of death for wireless start ups.

The slower from the bottom up approach has risks of its own. It tends to result in a sluggish network build out. In contrast, major carriers might spend years evaluating a network but tend to deploy quickly and thoroughly once they make a decision. In any case, it remains the most likely means by which mobile WiMAX will be commercialized. There are naturally exceptions and WiMAX could be deployed by Sprint and major carriers in Europe and Asia in the 2.5 GHz band but we see that as unlikely at this time.

Market Size
Visant expects over 12 million subscribers to 802.16e powered services in 2010. We believe that well over 50% of these will primarily "fixed" wireless customers.

For more information on WiMAX and other wireless technologies go to www.visantstrategies.com