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."

Comments

Hard for WiMAX NOT to be cheaper.

[mrbluze]

.. lucrative business models based on existing wired and 2.5G/3G infrastructures

Now there's an understatement. I would call the business model 'ludicrous' rather than lucrative. 3G is priced way out of reasonable range for any serious use.

Nobody pretends that wireless broadband will be available in mountain crevices, but 3G has been quite disappointing IMO.

As for $50/$100 plans, that will depend on competition, which in Australia, at least, is totally lacking.

Re:Hard for WiMAX NOT to be cheaper.

[zappepcs]

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.

16e versus 16d

[sg3000]

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."

To provide some context here -- since they used Airspan's equipment, the Australian operator probably deployed the older variant of WiMAX, based on the IEEE 802.16-2004 standard (called 16d or Fixed WiMAX). The majority of the industry on the other hand has shifted to the newer 802.16e-2005 standard (mobile WiMAX). Fixed WiMAX is essentially a near line of sight technology, not intended for non line of sight or mobile applications.

Mobile WiMAX uses a different physical layer than 16d, and it supports radio features to improve link robustness (such as convolutional turbo coding) and smart antenna technologies (2x2 MIMO to increase capacity and beam forming to increase cell range). In short, you can't gauge the performance of a mobile WiMAX network based on the results from a 16d network. The results I've seen in trials have matched radio propagation estimates fairly well, with the range being roughly what you see you traditional 2G/3G cellular -- 0.5 to 2 miles for non line of sight conditions. I've heard anecdotally of longer ranges of up to 30 miles for line of sight.

The rest of the industry has been fairly pleased with the performance of WiMAX during trials and early market deployments. Consider the number of service providers spending capital dollars to deploy. The WiMAX Forum recently announced there are more than 300 service providers deploying WiMAX in 118 countries worldwide. With Sprint's XOHM network going commercial later this year, we should have a better understanding of the benefits of WiMAX in a few months. The biggest concern I've heard of is the lack of devices today, but hopefully that will be alleviated late this year or early 2009.

Real life experience with WiMAX

[xt]

I am typing this through a WiMAX connection in Greece, so let me clarify a couple of things...

The technology itself is proven and works, both for data and VoIP. You do need to have a proper backbone though; it just doesn't scale to use WiMAX everywhere. A better idea is to use Ethernet microwave links for the backbone and WiMAX stations locally. If you couple this with a multiservice access node (MSAN) you can service remote areas that have local copper lines installed, but lack a proper backbone (eg fiber is too expensive to install and maintain in a mountain side). Right now, this is the killer application for this technology, as this is how it sells itself with most countrys' incumbent telecommunications providers.

The range is just fine, we have tested successfully with distances up to 30Km. Mind you, this is line of sight, the first generation (called fixed WiMAX) is not very good in urban conditions, but for semi-urban and rural areas it performs as advertised. The second generation (called mobile WiMAX) is supposed to give as 2G penetration and coverage, but I have not played around with it yet. This is also supposed to be the killer application for the second generation; broadband everywhere, even on the go.

The available spectrum is limited, but proper planning goes a long way. I can't get too specific, but in our trials we have been quite limited with spectrum with no real problems.

I don't see prices to be dirt cheap though; licensed spectrum costs money. On the other hand, stations and terminals are getting cheaper all the time. I think that WiMAX services' cost will follow the same general trend; slightly more expensive that the equivalent fixed line broadband at first, getting cheaper as it catches on.