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Doubts Over Intel's WiMAX Service Pricing Claim
Ian Lamont writes "An Intel executive has suggested in a blog post that WiMAX could lead to massive savings on broadband Internet, mobile voice, and mobile data service prices. His post lists a WiMAX-based package of services including home broadband, mobile voice and broadband, home phone service (including international) and even video phone service for $50 to $100 total. It sounds great, but unfortunately for Intel and consumers, it's unlikely to happen any time soon, thanks to factors ranging from costly WiMAX buildouts to the telcos' lucrative business models based on existing wired and 2.5G/3G infrastructures. There are also questions about WiMAX's actual range following a messy Australian rollout, although the vendor there claims the Australian service provider under-provisioned the network."
Due to massive hype -- much of which is false -- by the WiMAX Consortium, much of the public doesn't understand one simple thing: WiMAX is just another kinda radio. One that's only slightly better than some of the other kinds. There's nothing particularly wonderful about it. But it does have one real drawback that doesn't really have to do with the nature of the standard itself. That is that it's intended and manufactured for use on licensed spectrum, which -- due to poor spectrum management policy -- is expensive and scarce. So scarce that even many of the big telecommunications providers failed to win it in recent auctions. And so expensive, due to speculation and pre-emptive bidding, that once you've bought the spectrum you're unlikely ever to break even on that investment no matter what kind of radio you use. So, WiMAX is at best slightly better than other kinds of radios and is tied to an impossible business model. WISPs that ignore WiMAX and use other technologies will do better.
In North America and many other places (not all, obviously) the network business plan is basically one of build out the basics which are often guided more by equipment functionality or protocol functionality than anything in the marketing brochure. Once basic services are built, then increase bandwidth where required, spread coverage where there are customers to pay for it.
Generally this is done without a proven adoption rate for new services like 3G or WiMax. That's the gamble part. So prices will initially be steep and will stay steep if there is no adoption or bundling plan to offset the costs. DSL had initial problems this way, but stuck it out long enough for adoption to catch up. Deals with Yahoo etc. helped boost DSL adoption. Cable was an incumbent, people already had the service in their house and only needed the modem to use it.
One thing in common of all these is the necessary part of the plan to oversell the service. That is to force time-sharing by sheer volume of users. So they sell every household in Seattle 6Mbit/s service while betting average usage is generally less than would have been seen with DSL service. This lets them charge more, but not have to build out their infrastructure, and more or less none of the Mr or Mrs Seattle's ever notices. Then the Internet really got more useful, so more usage was the result. Congestion was the result because of bad network/infrastructure planning. If all users in Seattle want to use all 6Mbit/s of their paid for service, the ISPs start wondering if they are being DDoS'd. The ISPs are, in a word, fucked.
WiMax will suffer from the same self-defeating strategy. It will be great if you are within 1/2 mile of the tower. Anywhere else will suck bad.
Interesting point about the overselling: It is P2P that gets picked on and Newsgroups now because these protocols are generally being used when the consumer is not around, so are not user driven traffic. They are just eating bandwidth that was not counted in the initial infrastructure planning. With dial-up and DSL there were not many people using unattended downloads etc. so they are being blamed for the bad planning. The real problem is that they have to figure out how to explain to share holders that they just can't provide the triple-play and quadruple-play services they have been promising. At least not while all these GooTube and ESPN and Vonage people are using the network.
Anyway, because of how business works, WiMax is doomed to fail. If it's being touted as a cure for any current ills, I guarantee that it will fail. That marketing speak is the same as the run up to the war with Iraq. All lies and falsely reported intel.
If a large ISP were to slowly begin augmenting their network with WiMax where it makes sense, you can bet WiMax would take off slowly, but solidly. That's not what this looks like.
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You must not live in the US. I have to go 1.5 miles just to leave my neighborhood. There's only 100 houses in it.
The posts like your make the mistake of assuming that 3G pricing has anything to do with the price of 3G basestation. Wimax basestation might be cheaper than a 3G basestation, but the backbone infrastructure costs are still similar.
Now some wimax fanboy is going to jump in and claim that wimax infrastructure will be cheaper because you need less basestation. Which is, exactly what that Australian rollout tried to do, with disappointing results. For microwave based communications, if you want blanket coverage, you need dense network of basestations regardless of technology.
High 3G pricing is purely due to lack of competition (or cartelling...), not technology. In some markets entrance of wimax competitors will bring competition and thus prices down.
In .fi all operators offer unmetered 3G plans beginning from 9.9eur. Undercutting that with a wimax network will be hard.. Roaming abroad OTOH still remains ludicrously priced. I don't see wimax fixing that thou.
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WiMAX can operate at several miles in point to multipoint configuration, rather than just point to point. It also has better mechanisms for handling the scalability issues associated with using it as a last-mile technology in conjunction with a WLAN technology. That's the point- it is designed for WISP rollout, not consumer deployment.