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Wednesday, June 03, 2009

WiMAX and LTE - a tale of two conferences

I've been in Amsterdam with the WiMAX Forum for the past couple of days, at their global summit event. It's been an interesting contrast with the LTE Summit in Berlin a fortnight ago.

In format terms, the LTE event was more of a traditional conference, with bigger plenary sessions. The WiMAX event was more of a trade show, with more exhibition visitors than delegates to the speaker sessions.

The LTE event felt as though the wheels of hype were starting to squeak. There was a palpable feeling that the timelines are overenthusiastic, the wrangling of voice dominated discussions, and there was quite a lot of dissent about business models and how LTE would coexist with/replace HSPA. LTE's definitely still "work in progress" and is unlikely to be deployed in anger outside the US and Japan for some considerable time. Many operators will go via HSPA+ in the short term instead.

Conversely, the WiMAX event showed more signs of positivity I expected. I've long joked that WiMAX goes through a roughly 4-month cycle of oscillating optimism and pessimism - but it seems to hold true.

Although there was still some rhetoric from the Forum, and Intel and cheerleaders like Clearwire presenting WiMAX as some radical high-performance alternative to HSPA, or "4G before LTE is nearly ready", the reality is pretty easy to discern.

Firstly, WiMAX opportunity is largely determined by spectrum availability and regulation. There's still no likelihood of commercial FDD versions of WiMAX in the near future, so the key story is that WiMAX is the technology of choice for any provider that has access to TDD spectrum.

The most interesting thing for me was the upswing of 2.3GHz, rather than just the normal 2.5GHz band that most expect to be the core domain for WiMAX. Coupled with dual- and tri-band equipment (and roaming starting to be offered), this changes the game somewhat. I'm not aware of any HSPA or LTE silicon provide seriously looking at 2.3GHz as an important band, so in that part of the spectrum, WiMAX is pretty much the only game in town. Given that LTE-TDD is even less developed than LTE-FDD, those countries that have licenced 2.5GHz bands are also likely to get at least one WiMAX provider.

There is still a lot of emphasis on using WiMAX as an alternative to DSL in markets that don't have much copper. Given the relatively cheap price of TDD spectrum, it seems that WiMAX is easier to justify than fixed-3G routers. Although numerous companies have HSPA routers, there doesn't appear to have been a huge amount of traction in the market - possibly because of the load that heavy users place on the cells.

My general belief is that mobility-optimised networks like HSPA are too complex and expensive to be wasted on non-mobile users. Obviously this will vary somewhat, but seems to suggest to me that fixed-HSPA and fixed-LTE deployments will struggle in many instances.

One interesting observation has been around backhaul and network dimensioning. Because WiMAX operators are starting from a base of fixed-CPE and high-end nomadic usage, they seem to be anticipating much higher loads. A central planning assumption seems to be that an "average" user could well be using 5-10GB per month, and this is being reflected in pricing plans and also use of high-speed backhaul.

Some other quick notes:

- most WiMAX operators are talking about access to "the real Internet", with no particular messing-about with DPI or application filtering
- there was a fair amount of talk about VoIP, but it's generally intended more for fixed/nomadic usage than true mobility. My assumption is that everyone with a WiMAX device for the next 5 years will also have a separate GSM phone - or else will have a dual-mode WiMAX/GSM handset anyway.
- Lots of interesting stuff happening in Russia, where 3G deployment has been slowed for various reasons (eg military use of spectrum). Comstar, Yota & Enforta had interesting pitches - with Yota being especially aggressive.
- Lots of talk about netbooks, and embedded-WiMAX PCs. It seems likely that embedding modules will be country-specific, perhaps with predominantly WiMAX modules in markets like Russia, but HSPA in markets like Scandinavia. Medium-term, I think a fairly high % of laptops will need to be dual-mode HSPA (or LTE) plus WiMAX, which should pose some interesting challenges for the connection management software.
- There should be some interesting business models emerging, with prepay from Day 1 in many markets. It's still early days for adhoc usage, though
- The UQ proposition in Japan sounds interesting, especially given its part-ownership by KDDI. It looks like it's aiming to be a true, low-cost "pipe" provider, which sounds like a serious differentiator in a market always dominated by operator-managed services for mobile devices.
- I was unconvinced that WiMAX has any chance to compete with cheap massmarket HSPA dongles in Europe - not because of any specific failings, but because bargain-basement HSPA pricing seems to be lossmaking for many operators at the moment, priced at less than the cost-of-production per GB.

Overall, I still don't think that WiMAX is a real "competitor" for LTE. Ultimately, it will probably only address 20-30% of the accessible mobile broadband spectrum in most countries. It still faces challenges getting non-PC/dongle devices to market in sufficient quantities - I'm skeptical we'll see a WiMAX iPhone any time soon. But it fulfills a couple of important roles in various markets, notably for "wireless DSL", and mobile broadband in markets for which HSPA dongles are either unavailable or very expensive (eg US).


Anonymous said...

Good insight but I disagree that mobile WiMAX's biggest competitor is LTE. Given recent performance metrics and network experiences (Telstra is a good example), WiMAX is loosing ground due to HSPA and HSPA+. Major operators are setting aside 3.5-6GHz for LTE (in due time).


Niklas said...

Still confused though since in many of the cases networks will be built out nationwide. Competing as priceleader as an entrant will mean that you will have to spend a lot of money not only on network so how will the figures add up?

Paul said...

I really find it hard to agree with ""laptops will need to be dual-mode HSPA (or LTE) plus WiMAX, which should pose some interesting challenges for the connection management software"".

This would require additional radio (and cost) when very few people will ever need this. It took years for GSM phones to cover all the bands for transatlantic travellers, let alone adding multiple technologies (and IPR). Perhaps this will be market specific (I used to have a dual-mode DAMPS/GSM phone but these were never seen in europe) like Sprint are offering WiMAX/CDMA devices (could this really evolve to WiMAX/CDMA/HSPA????) but why would Vodafone be spending another $30-40 to equip a $400 Dell netbook with WiMAX when they have no intention of supporting WiMAX either in roaming or as a competitor?? If HSPA modem additions come down to the $30-50 range, OEMs can look to make them ubiquitous then password lock them to an operators' SIMs for a ~$200 subsidy per sale. They only need to do this 20% of the time to break even.

Need to travel to Baltimore? Get a USB WiMAX modem.

Dean Bubley said...

Anonymous - I absolutely agree, WiMAX's biggest direct nearterm rival is HSPA/HSPA+ . I spent much of this week pointing that out to the WiMAX fraternity.

It changes slightly when LTE-TDD becomes available, as then they are both competing for deployment in the same chunks of spectrum.

Niklas - I'm not sure that many WiMAX networks will be nationwide. Few operators have rollout obligations from regulators about coverage. Cost advantage will definitely not be easy, which is why I think successful WiMAX operators will generally look for niches that avoid them going head-to-head for commodity services.

Paul - the variable here is whether laptops come with WiMAX built-in by Intel, and also whether they are sold through retail or operator channels. I'm not expecting a high % of laptops or notebooks to be sold by carriers. Sure, some will go that route, but I have severe doubts that many customers will be willing to tie their computing devices to specific operators' networks and T&C's, even if bribed with a subsidy.

I certainly don't think many operators will subsidise $200 per laptop - that model only works for longterm contract data plans, which will be in the minority globally. Most users (outside the US) will use prepay, adhoc, 3rd-party sponsored "free" HSPA/WiMAX and so on.

I think the notion of "subscribers" for mobile broadband is wrong - I don't see a reason why access should imply an ongoing subscription-type relationship.