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Companies Betting on WiMAX
PreacherTom writes "This week, two companies — NextWave and Clearwire — filed to go public and make their fortunes with WiMAX, a wireless broadband technology expected to make serious inroads into the telecom market by offering a high-speed alternative to DSL, Cable, and other current offerings. Market researcher Gartner Dataquest expects the North American WiMAX services market to swell from 30,000 connections in 2006 to 21.2 million by 2011. Could this be the new backbone of the mobile effort?"
Wireless (GSM) data is expensive. You need to pay out the nose for it, and you're probably going to need a bulky contract.
If WiMAX lets me connect my devices "in the wild" at a reasonable price and without a hefty contract, then it'll be a winner.
To businesses, nobody's going to drop Verizon or Sprint or Cingular or TMobile's data services for a new offering as long as they're already in an existing relationship and entrenched in hardware (sorry, we just moved to Treos or Blackberries). It's the you and me's of the world -- and we need cheap devices, contracts and rates, or it's just another "thing" that our company pays for.
Sure there's the speed, that's great... but the range is key here. Ya see wirless is one of those techs where the providers have an automatic monopoly on service. Let's take the local Starbucks, the shopping mall, the airport... generally you're only going to have access to a single network in those locations. Automatic monopoly of wireless services = $40 a month service fees if you're lucky.
Now compare this to my condo, there's generally four to eight wireless networks in range in any room of the house. Some are locked, and some are open. I have my own closed network not broadcasting it's SSID, but the point is plenty of options.
Soon imagine a world where you go to Starbucks, the mall or the airport and you see four to eight wireless networks available. Hmmm... shall I join the local wireless business club for more than I pay for broadband at home, or shall I jump on "FreeWiMAX" instead?
Most likely some sort of ad-supported "FreeWiMAX" network will pop up all over, also some home users, etc... with varying levels of speed and quality, but the point is the local providers have lost their monopoly of service in their areas and finally wireless charges will have to drop and they'll need to actually compete.
WHEEEEEEE!!!
Cwm, fjord-bank glyphs vext quiz
Granted, we've made a ton of progress in wireless over the last several years to the point where just about everyone has or has access to a wireless connection. That's great ... but this true "broadband" experience is going to require a huge amount of spectrum as more subscribers log on, or a huge number of cells in order to provide the experience.
... it'll certainly make FTTH much more competitive and will perhaps drive telcos and cablecos to step up their rollouts. Rural areas without a broadband infrastructure seem to be the most likely to benefit from this WiMax phenomenon.
The article mentions the 2.5 GHz specturm. It isn't all that much different than the 2.4 we know and love today, except that the spectrum is licensed. A lot of the other transmission pitfalls will likely remain (Line-of-Sight, etc.)
Two factors are that spectrum is inherently limited, and the higher the frequency, the more power is required to transmit over a given distance. There is already sufficient suspicion that cellular transmissions aren't good for you. I can't imagine WiMax is going to fare much better here, but that has yet to be seen.
While I don't ever care to get WiMax
// Agent Green (Ian / IU7 / KB1JQO)
// IEEE 802.3: All 10base Are Belong To Us
Could this be the new backbone of the mobile effort?
God I hope so, we all know how pitiful the state of broadband is in the US...DSL is cramped(it's a twisted pair of two copper wires) and the cable companies are acting like the greedy pigs they are(expensive, anti-upstream, abusive).
The consumer is desperate for an alternative. Without competition we might as well be living in Communist Russia. Just look at AMD vs. Intel, or nVidia vs. ATI....that is how innovation happens.
This is something we've been waiting for for far too long. Broadband is probably the single-most important innovation of the last 10 years, and it's also one of the most stagnant(especially in the US). We desperately need a new competitor in this market.
The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky
You're really comparing Fossils and Ferrets there: The Model 'T' was revolutionary in that it made available a new technology that people already wanted available in quantity, and at a price most could afford.
Cell phones, like automobiles, were adopted first by the wealthy, then as prices dropped and supplies increased (a connection there???), they became ubiquitous.
As WiMax enters the market, most of the country is a vastly different landscape. The need for broadband is already being met by other means in most places. Near where I live, there is a market for WiMax (being served by Clearwire), because there are no wired alternatives. It is a large market geographically, but not so much in population. That's the kind of market Clearwire has been working in, becasuse it offers them the best chance of success. No real competition means they are selling on the availability of access, not the features of WiMax.
When WiMax becomes the issue, which it will when they expand further into markets already more widely served, the pitch will have to be more specific. So far, I haven't seen WiMax roaming happen, but that would be the benefit that offers something over the local telco or cable company.
21.3 Million in 7 years? Maybe. Is that significant in a world with so many alternatives? Maybe so.
I manage network operations for a large ISP in northern Canada and we use the same technology as Clearwire (not WiMAX - it is sort of a proto-WiMAX) for providing high speed Internet service. This technology is non-line-of-sight. I am not talking pseudo, I am talking the full meal deal. The technology actually depends on multipath reflection off of various surfaces, and this is what allows it to be NLOS. The fact that the frequency used is licensed means that they can be given additional power, which enhances signal reflectivity, and NLOS reception.
We are in a fairly large city in northern Canada, and there is nowhere in town we fail to receive a signal, from a fairly small number of cells located around town. As an old-school dial-up ISP without access to cable or copper infrastructure, NLOS high speed wireless was our holy grail, and this technology delivered. The stuff is black magic, it is something to behold.
From the demo unit we got from Clearwire, it was clear (ahem) that everything besides port 80 was severely throttled down. Web surfing? Fine. IMAP, SFTP, etc.? Too bad, can't.
WiMax is regulated spectrum. IE: the FCC will not allow the average consumer to buy equipment to build towers.
It's intended use is more as competition to both local DSL/Cable bandwidth providers, as well as competition for Cell networks.
If whoever owns the spectrum rights for WiMax (like NextWave) decides to offer a reasonable mobile data service over WiMax then it will force Verizon et al to bring their prices down.
Also, VoIP over WiMax could provide a compelling voice platform for competing with cell networks.
TFA is a bit vague, but I believe the business plan of these companies works as follows:
1) Raise a bunch of investor capital (done)
2) Use the capital to buy out the WiMax spectrum at auction (done)
3) Raise more money with an IPO
4) Use the IPO money to build a residential/business broadband service
At this point they're competing with DSL and cable providers, but not cell networks because the coverage is still spotty. Of course, coverage doesn't matter much for residential service since your house isn't really moving. After they get a good amount of subscribers, then they can:
5) Build out their coverage enough to compete with the Cell networks.