Betting on WiMAX

The view from technology’s looking glass is quite clear: the continuing march to faster, wireless connections is not about to slow down any moment. In fact, 3G has barely warmed in our tech vocabulary and a newer, complementary technology is now in the horizon, promising to surpass what third-generation networks offer.

The upcoming buzzword is WiMAX or Worldwide Interoperability for Microwave Access, a new set of standards that provides broadband connectivity to wireless networks.

Alcatel Philippines Inc. president Herve Pourcines explained in a lunch interview that WiMAX "is broadband communi-cations becoming wireless while 3G is wireless trying to go broadband."

In other words, 3G can run short of expectations for more advanced services despite its promise of high-speed data connection on mobile devices.

"WiMAX offers typically a throughput of 22 Mbps (megabits per second) per cell, which is around two to four times more powerful than 3G with HSDPA for the same spectrum width and provides a much better bandwidth at the edge of the cell," Pourcines said.

He said WiMAX is expected to become the primary choice over 3G or Wi-Fi (Wireless Fidelity) for many telecom operators worldwide looking at boosting their broadband services.

Because of WiMAX, Pourcines said many applications that were once only available through wired broadband networks or high-bandwidth satellite Internet could now be delivered wirelessly, including enterprise-level business applications such as Corporate Mobility Manager (VoIP, Virtual PBx, VPN) and video and audio conferencing.

Pourcines was quick to point out, though, that WiMAX is not a competitor to 3G but rather a complementary technology.

"The higher capacity of WiMAX would make services like wireless Internet access, video and music streaming, online video gaming and mobile TV faster and a more enjoyable experience. 3G remains attractive for voice services due to its high voice efficiency and low voice cost," he said.

On March 26, 2004, a strategic alliance was forged between Alcatel and Intel for the definition, standardization, development, integration and the marketing of WiMAX end-to-end solutions.

Alcatel and Intel are now working with Innove Communications in a WiMAX technology trial that started in late 2005. This is aimed at assessing the capabilities of pre-Certified WiMAX and 802.16-2004 solutions to validate potential business cases and fine-tune activities for large-scale deployments in the coming quarters.

"One of WiMAX’s other main advantages is that it is today the only fully IP native wireless access technology and that it could re-use existing 2G/3G sites in urban areas. Its potential coverage is about one to two kilometers in dense urban areas and 15 to 30 kilometers in rural areas," Pourcines said.

Typically, WiMAX uses mainly the 2.5 or 3.5 GHz bandwidths. Tomorrow, WiMAX will be available at 700 MHz and this will allow it to cover even wider areas and thus make it the cheapest broadband access for voice plus data communications services for underserved rural areas in the Philippines.

Pourcines predicts that "WiMAX could be a major building stone in the country’s effort to bridge the digital divide and enrich significantly the lives and opportunities of those Filipinos living in underserved regions."

Loosely defined, broadband is high-speed transmission of data via cable or dedicated service line (DSL).

While fixed-line broadband is now the norm globally for Internet access versus dial-up connection, wireless broadband is fast catching up, Wi-Fi being at the forefront, at least locally.

However, WiMAX is upping the ante as it will make possible bandwidth-hungry applications that will surely make tech nomads happier.

As it is now, Alcatel is the world leader in broadband technology and Pourcines is saying that wireless broadband through WiMAX is fast going into the mainstream.

"The future is really broadband and will become a basic necessity like electricity, water or gas," he said.

In the United States, he said many city governments are investing in broadband facilities for faster, more efficient delivery of social services.

The key driver for this trend, he said, is falling revenues for voice calls, once the bread and butter of telecom firms. In 2005, Pourcines said calls made over Voice over Internet Protocol (VoIP) represented only seven percent of calls for France Telecom. In the first quarter of 2006, VoIP calls shot up to 40 percent of all calls made.

Telecom operators are really looking for alternatives to boost average per user revenue (ARPU) and they are seriously looking at the possibilities of broadband to deliver a different set of voice, video and data services to its customers.

To achieve this, Alcatel believes that significant investments are needed "to enable broadband in the network infrastructure and to reform the fabric of the information systems that ultimately control the user experience."

One big challenge, though, is how to turn this into a mass market technology. And one of the solutions is for the industry to be able to provide a wide range of handsets that will suit all types of applications and, in the case of the Philippines, budget.

There is no doubt that everyone will benefit from broadband but how telecom operators will be able to deliver this on mobile gadgets while keeping the cost down is the true hurdle.

Alcatel assures, though, that based on its study, a return on investment is guaranteed inferior to five years but an internal rate of return will be greater than 70 percent after 10 years.