My recent debates on the future of mobile comms, HSDPA, CDMA and WiMAX have stirred the pot and are reflecting the warlike situation we now have with the WiMAX camp on the one side and the mobile camp on the other side. They have led to some very interesting discussions with top people from the various camps. It is also interesting to note that Qualcom has moved closer towards the WiMAX camp, might this be a sign of the times with CDMA possible becoming a casualty of the standards war with GSM?
It is easy to get an agreement from all the camps that WiMAX is going to play a role in the fixed wireless broadband market, and, as I have said before, it is only a matter of how successful WiMAX will be. Obvious markets include regional markets in western countries, and even larger opportunities exist in emerging economies.
The tricky point of course is the mobility market.
As I reported after my trip to China, Ericsson certainly is a firm believer in its own mobile comms future and doesn’t see a role for WiMAX in this market at all.
Several other vendors also question the viability of WiMAX. And it was interesting to follow the spectrum harmonisation debate in Europe – sharp demarcation lines existed, depending on the vested interests of the mobile operators and their vendors. Fixed network operators without mobile networks were all for an open approach, while those with mobile networks wanted to preserve spectrum rights linked to the technologies they deploy.
While you occasionally get really good arguments from these vested interests it is always necessary to analyse them according to where they are coming from. It’s not that their arguments are necessarily wrong, but they often suffer from tunnel vision.
There certainly are very strong arguments that WiMAX has a very tough time ahead. While technology does play a role, in the end it is market coverage, customer service and a whole range of other business issues that are crucial to whatever success you are pursuing in this market. Those entering these markets for the first time know only too well how powerful the current players are, and how difficult it is to chip market shares away. And WiMAX will not be any different in this respect.
But if we except that customers are going to pay less and less for calls (mobile or fixed), and that customers are prepared to pay for data applications based on their conditions (high speed/low cost), then that certainly has to be the future of any player in this market. The question from an operational point of view is simply: what is the best technology platform for such an environment?
The current mobile networks are optimised for calls, as 90% of the revenues come from this market segment. The GSM-based migration path is still a fair way away from becoming IP-based. And, although CDMA might already be a bit further advanced, the same question applies there – what happens if suddenly the traffic stats are reversed to read 90% data and 10% voice? Will CDMA be able to deliver under such circumstances?
To date I have not heard convincing enough arguments to place my bets on the mobile camp. But, to be honest, I also still have severe questions regarding WiMAX. Will they be able to deliver what they promise and how are they going to establish these networks in those highly competitive telco markets?
The first markets to watch are those where the leading telcos don’t have a mobile network, notably BT in the UK. I have also argued that companies such as China Telecom should very seriously consider this market approach, and there are, of course, many more players who have the resources to put their full weight behind WiMAX, if they believe the technology is robust enough and can stand up to its promises.
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