Wimax, Why & Where?

There are a lot of reasons to think there is no need for Wimax.  On one hand, you have free WiFi that will deliver the bandwidth and cover the planet ubiquitously, on the other had you have 3G that delivers mobility.  So why is there the need for another broadband wireless standard?

Consider the following analogy with copper lines and GSM.  The availability of GSM, lessened the need to run copper wires and build out the wireline phone network.  GSM was cheaper and every wanted it first.

Wimax is poised to do the same in the parts of the world where there is not yet a robust DSL/Cable based wireline broadband data infrastructure.  Why built out the DSL network when Wimax is cheaper, more ubiquitous and delivers a lot more bandwidth?  There is room for it as a DSL replacement technology.

This is what is happening in the Middle East, Eastern Europe, Africa and South America.  Saudi Arabia for example, has no real DSL infrastructure, and a T-1 cots $5000/mo. 

So the need exists, but what about the products?  Last month, the Wimax Forum, finally certified a number of products for interoperability.  This is seal of approval that will enable buildouts.  It happened this way in the cable modem world eight years ago.  After Cablelabs certified vendors, the cable operators started deployments, and soon enough cheap modems from Asia flooded the market.

A number of chip vendors with the reference designs, a few basestation vendors and CPE vendors got certified.  At the time of this writing one vendor had both its basestation and CPE certified, and that is Redline Communications (one of our investments).  This means carriers can comfortably deploy without fear of being locked into one vendor.  Congratulations.

Wimax is here.  2006 will be a very telling year as to what kinds of fortunes will be created in this business.

Comments

[Musterg]

Baris, are you seeing room for Wimax only in fixed setting?

[Baris Karadogan]

I see the fixed version being deployed internationally in 2006, this is happening. On the mobile side, I see two versions of 802.16e, the nomadic version (for laptops, no handoffs) and the truly mobile version. The nomadic version will roll out first and then the truly mobile version. I see that to be widespread in 2009. So the question is where will WiFi (802.11n) and 3G be by then? It will be a challenge for 802.16e based systems to compete with WiFi and 3G which will be widespread by then. WiFi will find its way into cellphones in 2009 and hotspots will almost be ubiquitous. What does 802.16e have that will make it a clear alternative to WiFi and 3G?

[Musterg]

I guess, 16e has OFDMA as an underlying technology which is far better than .11 PHY/MAC and 3G CDMA variants which, I think, could enable ultimate utilization, frequency reuse and seamless handoff together with higher data rates.

Point taken. No argument about the technology advantages of .16e, but WiFi is free, and 3G's marginal cost of network buildout will be low to do broadband. We'll see how it all plays out.