A case for WiMAX

26 04 2009

Recently I came across a good business case for WiMAX.  The survey was conducted by a market research firm ‘In-Stat’ in US, to find consumer interest in different wireless business models, for Clearwire, a US based WiMAX service provider. The business model was based on laptop data usage, and described service offerings from mobile operator, Wi-Fi service providers & WiMAX service providers. In the survey, consumers responded positively towards the business model of WiMAX as compared to that of Wi-Fi & mobile operator. The basic component of WiMAX service model was: Unlimited service at home, across home city & one third of major cities in US with downlink speed of 2Mbps & Uplink of 1Mbps.

There are two key findings of the research:

1. Consumers are interested more in coverage where they are, than coverage everywhere. This is not necessarily a key finding, but it will certainly help in understanding the key areas while planning a WiMAX services rollouts. These areas are most of the times are home metro areas and WiMAX business model described the service areas limited to home metro areas & one third metros across US.

                      The key point in mentioning the findings here is that, WiMAX certainly can’t compete with cellular technologies like 4G (LTE). It has its own limitations. But certainly WiMAX can be put up into a successful business case, if we stop comparing it with cellular technologies. WiMAX has its own purpose & areas to focus. Strictly speaking, WiMAX could provide services into “Nomadic” areas i.e. providing network in between two metros areas, than providing true mobility i.e. network in one metro or in a city. The later part could be addressed by a cellular technology.  

2. Second findings show that, more than 80% consumers said they have some interest if WiMAX provides service at home & on-the-go. Another 40% said that, they will be willing to switch their current broadband providers if they get services at home & on-the-go.

WiMAX devices will be the key aspect in success of technology. Keeping Intellectual Property costs low for devices will be the key in keeping costs of WiMAX enabled devices low. This will enable service providers to add WiMAX capabilities to the devices. When costs involved are low, it will encourage consumers to try out these devices at risk factor involved will be low. Currently a WiMAX modem without service contract costs approx 60$ in US as compared to 4G modem of 240$, without service contract. This roadmap looks similar to that a Wi-Fi roadmap. WiMAX enabled devices will come first then followed by consumer electronics. WiMAX may find place where there exists Wi-Fi today.

So when Nokia called WiMAX as “Wireless Betamax”, there is no need to be panic. One may still tend to compare WiMAX to 4G (LTE); in India where we are still awaiting for 3G, WiMAX is often considered better than 3G. We often term WiMAX as 4G technology, but when it comes to clear roadmap 3G wins the case. With 4G (LTE) in line, WiMAX really needs to address few of the concerns raised  e.g. handovers issues. But as mentioned earlier, WiMAX can still coexists with 3G, first because it is better technology for data usage as compared with  3G. Second when compared to nomadic usage i.e. usage between two metro areas, WiMAX clearly provides better option than existing 3G, which touts about true mobility i.e. mobility across metro or in the metro. 

WiMAX surely has a business case, if we are going to focus on nomadic usage. Rest is assured!