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WiMAX PR efforts to position 802.16e as complementary to 3G and ’3.5G’ appear to
be making little headway.  While WiMAX supporters are keen to stress that
802.16e offers ‘true’ mobile broadband and that the current crop of cellular
technologies are best-suited to providing wide area ‘narrowband’ data and voice,
it is not an argument generally accepted outside the WiMAX community – at least
not yet. 

The ‘complementary’ marketing position is less convincing in markets where
higher-speed HSPA and HSPA+ networks are emerging.  Today, HSPA can offer
up to 14.Mbps peak downlink speeds while HSPA+ can offer up to 21Mbps with
further upgrades in the pipeline (although average throughput is likely to be
around a third of the headline rates).  Mobile WiMAX has got the network
performance edge, however, with peak downlink rates of 40Mbps and a 10Mbps
uplink at full throttle.

But in the developed 3G and 3.5G markets where mobile WiMAX has got a presence –
such as the US, Korea, Japan and some parts of Europe – it still looks like a
straightforward fight between 802.16e and cellular to win the hearts and minds
of mobile broadband customers.  Mobile WiMAX might be higher capacity and
faster than cellular, but mobile operators have got wide area coverage and are
practiced in the art of delivering voice. 

The WiMAX camp often puts forward the argument that as mobile data volumes
increase, cellular networks will start to buckle – sooner rather than later –
under the capacity strain.  This would give 802.16e networks the
opportunity to capture the higher-speed mobile broadband market – so this
argument goes – leaving cellular networks to ensure customers (using dual-mode
WiMAX/3G devices) can at least stay connected with lower data speeds (and voice)
when outside the reach of the much better performing 802.16e base stations. 

But until cellular networks are widely seen to be performing at much lower
levels than 802.16e, mobile WiMAX is unlikely to persuade large swathes of
cellular customers (who are used to wide area HSPA) to ‘complement’ their 3G
contracts with a WiMAX subscription. 

Supporters of WIMAX might say we are already at this stage, or at least very
close to it.  This could very well be true but this assertion would need to
be backed up by hard evidence in the shape of impressive subscriber take-up
figures in the near term. 

Moreover, where 802.16e coverage is limited it is going to be more difficult to
persuade existing cellular customers to splash out on presumably more expensive
3G/WiMAX dual-mode devices – with perhaps the need for two contracts –
particularly in the current economic climate.

The notion of two different technologies serving two different markets seems
more designed for the ears of regulators rather than as an accurate description
of how WiMAX and 3G/3.5G will play together in a commercial environment. 

The 3G community has argued vociferously in various markets around the world
that to allow WiMAX mobility through the release of spectrum in the standardized
WiMAX frequency bands of 2.3GHz, 2.5GHz and 3.5GHz (and at much cheaper prices
per MHz than 3G spectrum) would undermine unfairly previous high investment. 
Yet if WiMAX could be seen as complementary to 3G, then regulators would no
doubt have few qualms about releasing spectrum for 802.16e.  But many
regulators don’t appear to be convinced about the ‘complementary’ argument. 
This has been a contributory factor to spectrum auction delays in some
potentially huge growth markets for WiMAX, including Brazil, Mexico, Russia and
India.

With WiMAX Complements

When integrated fixed-line and wireless incumbent operators do embrace WiMAX, it
is not to complement their existing 3G service but rather to fill in gaps in
their fixed-line broadband coverage where ADSL and fiber, for economic reasons,
can’t reach.  This was partly the thinking behind last month’s deal between
Telecom Italia and Aria, a privately-owned ISP, where the Italian incumbent has
given Aria the right to use its 3.5GHz spectrum assets to supply broadband
service in some of Italy’s regions.  Under the agreement, Telecom Italia
will also be able to supply its own customers with WiMAX services via Aria’s
nationwide white label wholesale offering.

"The deal will make it possible to extend the development of WiMAX as a
complementary technology to fiber optics and copper in the supply of broadband
services to the people of Italy," says Telecom Italia.  Italy’s incumbent
further points out that the deal was driven by a need to reduce costs and to
ensure it met the minimum WiMAX coverage targets set out by the Italian
regulator when the 3.5GHz spectrum was auctioned in February 2008.  There
was no mention of WiMAX being used to complement the 3G service of Telecom
Italia Mobile.

Standalone cellular operators generally turn to WiMAX when they want to enter
the fixed-line broadband business and compete directly with ADSL and cable. 
Vodafone Malta, using 802.16d kit from Airspan, is doing just that.  HSPA
is marketed as a personal broadband service on the move, while WIMAX offers
multiple PC connections – as a family product – in the home.

Fighting the Mobile Fight

It is perhaps unsurprising that Ericsson, as an arch HSPA supporter and with no
WiMAX portfolio, should disparage 802.16e as a ‘complementary’ mobile data
option for customers.  It routinely asserts there is nothing that a mobile
WiMAX network can do that HSPA and HSPA+ networks can’t.  From a technical
perspective this is pretty hard to justify and further claims by the Swedish
supplier that WiMAX – in terms of mobility – will disappear altogether
(http://www.telecoms.com/12212/coming-soon) sounds arrogant.  It certainly
doesn’t make for a constructive industry dialogue on operator network choices,
but that could well be Ericsson’s intention.

Although faster-speed 3G networks make it more difficult for WiMAX to gain
ground in the mobility market, there are grounds for WiMAX optimism that 802.16e
can still make a significant impact.  It certainly won’t disappear as
Ericsson suggests.

In Japan, for example, UQ Communications started commercial mobile WiMAX
operations on 1 July 2009 with easy-to-understand and competitively priced
tariffs, both of which have been welcome hallmarks of mobile WiMAX operator
launches to date.  UQ charges a monthly flat rate of ¥4,480 ($47) with a
one-off sign-up fee of ¥2,835 ($30) for a service that typically offers 16Mbps
throughput on the downlink and 3Mbps on the downlink (although this is achieved
over a network that is necessarily lightly loaded as UQ is only at the start of
ramping up operations).  There are no long term contracts and no data usage
limits.  UQ says it has plans to launch a one-day pass for ¥600 ($5) on 1
October 2009. 

By contrast, NTT DoCoMo, the largest mobile operator in Japan in terms of
subscribers, is offering a monthly flat-rate of ¥4,000 ($42) for a theoretical
best-effort downlink speed of 7.2Mbps, although typical speeds are much lower
than that.  It has no daily rates as far WiMax.com could see from NTT
DoCoMo’s website, and there also were some reference to data usage caps. 
Not an easy site to navigate and find out information quickly.

As well as targeting 3G subscribers, the 802.16e kit provided by Samsung allows
UQ to make a marketing push directed at Japan’s ADSL customers, which can
typically receive over 10Mbps.  But UQ won’t be competing directly on
price.  An ADSL service in Japan, without a leased POTS line, will
generally undercut UQ as it typically costs ¥3,500-¥5,000 ($37-52) per month. 
But by offering both nomadic and mobile services as part of its monthly ¥4,480
package, UQ has a good chance of tempting customers to give up their home-only
ADSL subscriptions in favor of WiMAX.  All this augurs well for UQ in
particular and for mobile WiMAX in general. 

UQ also takes the view that it needs to fight 3G head-on by establishing a
nationwide coverage as soon as possible to match the size of the cellular
footprint.  Although the terms and conditions of UQ’s license require
population coverage of at least 50 per cent in each of the country’s regions by
the end of its 2012 fiscal year (31 March 2013), the operator says it will have
between 84 per cent and 98 per cent population coverage in each region by that
time.  That translates into nationwide population coverage of 93 per cent.

The complementary stance adopted by many WiMAX supporters, which suggests two
different markets served by two different technologies – where 802.16e quenches
the thirst of the mobile internet user and 3G cellular capacity is freed up to
provide wide area voice and narrowband data – is unlikely to unfold so cleanly. 
For serving the mass mobile broadband market, it looks more likely it will be an
out and out scrap between 802.16e and HSPA/HSPA+ for fundamentally the same type
of customer in those areas where the two technologies find themselves up against
each other. 

The good news for WiMAX is that, along with a high capacity network, the 802.16e
cost base appears to allow for very competitive prices, which should put
existing 3G operators under a lot of competitive pressure.  That pressure
will increase as WiMAX coverage expands, more embedded devices become available,
and if voice can be bundled into the service.

Ken Wieland has been reporting and commentating on the telecom industry for
15 years.  He has held various senior editorial positions, including most
recently as Editor of WiMAX Vision magazine at Informa Telecoms & Media.  Now
working as a freelance telecoms writer, Ken contributes analysis and opinion
pieces to a number of websites, including the EIU (Economist Intelligence Unit).  
He can be contacted at
ken2wieland@yahoo.co.uk.