Can WiMax Go The Distance?

Recent reports that it may be headed for a fall position WiMax as a long shot in the race for 4G wide area wireless domination. This uncertainty is a shift from last year, when WiMax seemed destined for greatness: Major players, including Intel, Nokia, Samsung, and Sprint Nextel, rallied around the WiMax banner, promising faster, cheaper connectivity thanks to low-cost, standards-based radios that would integrate wireless into devices we couldn't even imagine, from media players to automobiles to gaming systems. With Intel baking IEEE 802.16 into its Centrino chipset, many new laptops would become broadband-wireless enabled. WiMax would do for wide area wireless what Wi-Fi did for WLANs. Sprint Nextel promised service in two cities, Chicago and Washington, by the end of 2007. The company's proposed alliance with Clearwire would accelerate U.S. deployment of WiMax on a nationwide network with common roaming--and a common marketing name: Xohm.

A new era of broadband wireless was to be born.

Then reality set in. The Sprint Nextel- Clearwire talks fell apart in November. Verizon Wireless said it would migrate to the Long Term Evolution standard to provide a path for 4G services to its customers. And as quickly as the industry lauded WiMax as the next big thing, some began to speculate as to whether the spec could survive.

Don't count it out yet. Sprint Nextel must offer WiMax services to a wide swath of customers lest it lose spectrum. Intel is set to ship WiMax-capable chipsets, while Cisco Systems and Nortel Networks are betting on the technology in developing regions. Whether enterprise IT groups should add "WiMax-capable" to purchasing guidelines for new laptops and smartphones still depends heavily on geography, however.NOT SO BLEAK

Commercial WiMax services have launched in the United States, though not from the players you might expect. TDS Telecom, a regional service provider, offers data and voice WiMax services in Madison, Wis., albeit in a fixed broadband configuration. Sprint Nextel met its WiMax connectivity service goals through employee-only "soft launches" in Washington, Baltimore, and Chicago. The company says it's fine-tuning the network and preparing for a commercial service, under the Xohm moniker, in select cities later this year, though it wouldn't comment on additional launch cities or discuss an updated timeline.

Clearwire also is looking to provide service this year and has been working on its own test network near Portland, Ore., conveniently close to Intel's headquarters. Intel employees have helped the fledgling wireless company optimize its services, according to John Storch, Clearwire's VP of network development. "Our performance tests with our WiMax beta trial in Portland have been showing very positive results. We're seeing throughput of 2 to 4 Mbps downstream and 1 Mbps upstream," Storch says. "Many Intel employees are using only our WiMax trial network, even when other mobile wireless networks are available, and some are even considering canceling their broadband service at home."

For enterprise IT, the uncertainty around which operator will launch what WiMax service, and when, isn't the only source of drama. There are also two incompatible WiMax variants--802.16-2004, sometimes called 802.16d or fixed WiMax, and 802.16-2005, also known as 802.16e or mobile WiMax. Our money is on 802.16e because it contains numerous enhancements that make it ideal for both point-to-point and mobile applications. Generally, when discussing service launches like Xohm, the technology in question is 802.16-2005.

For enterprises, the enhancements WiMax brings to the table boil down to increased speed and decreased latency. A Chicago demonstration by Motorola and Sprint delivered downstream throughput ranging from 2.4 Mbps to 3.2 Mbps, with upstream throughput from 1.4 to 1.5 Mbps.Clearwire says its own performance tests have been strong as well, with downstream throughput at 5 Mbps and upstream of 1 to 2 Mbps. Sprint expects end users to see 2 to 4 Mbps on the downlink for Xohm, with upload speeds of 1 to 3 Mbps. As a point of comparison with existing 3G networks, our last round of EV-DO Rev A testing had an average download speed of 1.1 Mbps and an average upload rate of 511 Kbps. While these speeds are faster than current 3G networks, they don't beat planned upgrades to existing 3G systems, such as future iterations of HSPA. See results of our Clearwire testing in the story on p. 52.

Beyond just more speed, WiMax's IP-centric architecture, combined with quality of service, make it ideal for supporting advanced applications such as video. In fact, Intel's and Clearwire's demonstration at the recent Consumer Electronics Show showcased streaming video, including from special "WiMax cars" on a test network (see a video of a test drive below).

PRICEY CHIPS

The cost of WiMax chips is an area of uncertainty. While economies of scale could drive down prices, a lack of demand, particularly in the face of an uncertain service provider market, may initially keep WiMax costs high. And while royalty fees for WiMax chips were projected to be lower than 3G competitors, in part because of the wide variety of companies holding intellectual property, recent research from ABI indicates that WiMax royalties may not be any lower than competing 4G technologies.Sprint's Barry West says WiMax chips should cost less than rival technologies, with prices more in line with Wi-Fi than cellular radio. That means WiMax technology could be integrated into a wide variety of devices, even those one doesn't consider mobile, such as stereos or appliances. In fact, this new device ecosystem has been a cornerstone of Sprint's marketing strategy: Sell WiMax-enabled devices in a variety of venues, bypassing the expensive (for the carriers) device subsidies found in American cellular markets. Pricing models would change, too, with a combination of daily, monthly, and prepaid plans available and, likely, discounts for users who carry multiple WiMax devices; for instance, a laptop and a portable music player could be on a shared plan.

A cellular modem could conceivably be built into any device, limited only by feasible battery life and antenna design. Infonetics expects WiMax to see annual global, industry-wide growth of 87% between 2006 and 2010 as more carriers embrace 4G technology. That's likely overly optimistic, but expansion anywhere in that ballpark is good news for equipment suppliers such as Ericsson, Intel, Nortel, and Samsung, all of which are banking on WiMax to fuel sales growth.IF THE MIGHTY SHOULD FALL

A series of developments has led some observers to label WiMax a lame-duck technology in the United States. Perhaps most significant is the announcement that Verizon Wireless, which currently provides mobile services using the CDMA2000 line of standards, will migrate to Long Term Evolution to provide a path for 4G services to its customers. LTE is based on the GSM evolution path; that means both AT&T and Verizon Wireless--the top two U.S. wireless carriers--would provide 4G services on the same technology, LTE. Qualcomm just announced LTE chipsets.

While WiMax proponents may be disappointed by Verizon Wireless' decision, they weren't surprised. Verizon is partially owned by European wireless company Vodafone, and standardizing on a 4G spec provides leverage with infrastructure suppliers that outweighs any integration issues Verizon may face in supporting both CDMA2000 and LTE networks. The chance that AT&T or Verizon Wireless would support WiMax over LTE to build out U.S. 4G networks was always slim; LTE is strongly poised to become the dominant next-generation global cellular platform because LTE is, basically, the long-term road map for the GSM/WCDMA-based standards, which are dominant worldwide. The WiMax Forum's announcement on its intentions to develop Frequency Division Duplex (FDD) and 700-MHz profiles for WiMax may allow the technology to be more versatile in the spectrum in which it's deployed, though what real market impact these additions will bring remains to be seen.

Another concern for WiMax proponents is the welfare of Sprint Nextel. The company has faced serious problems around billing, customer service, and retention, and the integration of Nextel since the 2004 merger. The drag inherent in getting its CDMA-based push-to-talk network off the ground and the recent ouster of CEO Gary Forsee, a WiMax proponent, add to speculation that the combined company won't have what it takes to pull Xohm off. However, Sprint has little choice but to press forward. Under the rules of the merger between Sprint and Nextel, by 2009 Sprint must have a service in the 2.5-GHz band available to at least 15 million people, with another 15 million by 2011. Failure risks forfeiture of the spectrum it gained from Nextel. As of press time, Sprint is committed to its WiMax rollout and made no public indication that it's backing off its goal of reaching 100 million subscribers with Xohm by year's end.Clearwire seems equally committed to its WiMax rollout, noting in a recent conference call that it has enough spectrum to cover 245 million points of presence. Now, available spectrum doesn't necessarily translate to a huge buildout. In fact, on Jan. 31 Clearwire announced a significant reduction in rollout plans, pulling back from the 30.5 million PoPs in its previous agreement with Sprint to about 6 million.

And, of course, plans could change if another deal with Sprint comes to fruition, a very real possibility.

Clearwire also reported preliminary results for 2007, saying it ended the year with 394,000 subscribers and $151 million in revenue. But the company didn't report its net loss. During the fourth quarter, it added 46,000 customers, 25% below estimates from Pali Research. The takeaway is that Clearwire is ready to build a WiMax network on its own if Sprint abandons Xohm.

And while both companies seem ready to go it alone, rumors are again percolating that Sprint and Clearwire may be trying to negotiate terms by which they can jointly develop and market a nationwide WiMax service, under the Xohm branding or otherwise. With numerous vendors, including Intel, Motorola, Nokia, and Samsung, possessing vested hardware and R&D interests in seeing WiMax succeed in the United States, there's considerable pressure to make something happen, together or separately. BEYOND OUR SHORES

Then there's the Cisco factor. The company told us it sees WiMax poised to help bridge the "digital divide" in emerging markets. Cisco's Wireless Network Business Unit, normally associated with enterprise wireless networking gear, bought Navini Networks in October, and the company firmly believes that WiMax is a service provider play. Navini brings some interesting RF technology, particularly around beamforming, which could show up in both WiMax and 802.11n gear. Mainly, however, the acquisition lets Cisco pursue WiMax ventures, particularly in developing markets. Marketing and sales are being driven largely from Cisco's service provider unit; the placement of Navini into the Wireless Network Business Unit is based largely on where radio expertise resided within the company.

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Cisco believes WiMax has the potential to be a big success in developing economies, a theme echoed in an interview with Nortel, which is also playing in the WiMax space. In addition, SOMA Networks and the Indian state-owned telecom company BSNL recently announced plans to develop a WiMax network that will cover 210 million to 250 million people.

The logic of WiMax in developing markets is clear: Running landlines can be prohibitively expensive, particularly in rural areas. WiMax's high throughput, spectrum efficiency, and IP architecture make it ideal for deploying wireless residential broadband services, particularly in undeveloped regions. In our view, this is a prime opportunity for WiMax.

Still, while WiMax may be ideally suited for providing broadband connectivity, it faces one major obstacle: in-building penetration. WiMax's two most popular deployment frequencies are the 2.5-GHz and 3.5-GHz bands, which are inefficient when it comes to penetrating building walls. Nortel suggests that a combination of WiMax repeaters, picocells, or WiMax-to-Wi-Fi bridges may be needed, depending on the application. Right now, though Nortel says it's working on developing solutions for penetrating walls, operators are more focused on getting networks off the ground. They'll tackle in-building coverage as the need arises.

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From The Labs: Clearwire WiMax