WiMAX on the Right Track

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There is no longer the need for proof-of-concept trials, but questions about
what is the best business model, how much bandwidth is needed, and what are the
best technologies to support train applications are still open.  The good
news is, however, the discussion of these questions can now be grounded on
experiences and data from the operators that have already taken the plunge. 

This

recent article talks about the business case for train operators that use
trackside WiMAX-based and cellular solutions.  Others have used satellite
or cellular networks to backhaul the data traffic from trains.  Regardless
of the technology used, a few trends are emerging.

Passengers love Wi-Fi on trains, but few are willing to pay for it.  A
business model that crucially depends on revenues from passengers Internet
access is very difficult to justify.  The addition of advertisement
revenues does not usually bring the operator to profitability either. 

Free Wi-Fi access is gaining ground, with operators like National Express in the
UK moving from per-pay to free access.  National Express sees the service
as an amenity to passengers and a differentiator to steal customers from
competing train operators and from alternative forms of transportation (car,
plane).  Among their 2,000 users per day on board of Virgin Trains in the
UK, 80% are from first class, where passengers have free Wi-Fi access. 
With free access, National Express has seen usage rise to 6,000 connections per
day.

Popularity of the Wi-Fi access means increasing demands on the backhaul network
from the train.  Virgin UK passengers are connected for an average of 74
minutes and use 14 MB per session.  Traffic from National Express
passengers follows a similar pattern.  MBTA in Boston has on average 12
connected passengers per car.  For a five-car train, this translates in an
average throughput of 1.5 MB per train.  Peak rates are much higher as
public transportation use is highly concentrated around work-commuting hours. 
Furthermore, traffic demand is growing very quickly from increase adoption of
mobile devices with wireless connectivity and from demand from individual users. 
With more connected passengers, each generating more traffic, the demand on
train networks is escalating quickly. 

Adoption of safety and operational applications is going to put additional
pressure on the resources available on wireless broadband networks on trains. 
While still largely in a planning mode, train operators are keen to explore
applications that go beyond public internet access and may include remote
surveillance, mechanical and safety monitoring, ticketing, or passenger
information and entertainment.  We see this as the most interesting growing
area within the rail industry and the one that may hold key to profitability for
rail operators deploying wireless broadband networks. 

Monica Paolini is the founder and president of Senza Fili Consulting and can
be contacted at
monica.paolini@senzafiliconsulting.com.   Senza Fili Consulting (
www.senzafiliconsulting.com)
provides advisory support on wireless data technologies and services financial
modeling, market research, business plan support, business development, RFPs,
due diligence, and white paper preparation.   Independent advice, a strong
quantitative approach, and an international perspective are the hallmarks of our
work.