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WiMAX – A Business Case

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Title: WiMAX – A Business Case


1
WiMAX Making a Business Case

_______________________________________
Pradeep Samudrai, Former Vice President, Samsung
Telecommunications
  • GLG Institute
  • Wednesday, January 10, 2007
  • The Penn Club, New York

2
Pradeep Samudra, now an independent consultant
was most recently (10/06) a Vice President at
Samsung Telecommunications. He has over 25 years
of experience in the telecommunications industry.
He is a holder of 4 recent patents and 6 pending
applications in the area of IP/MPLS/ATM routing
and is knowledgeable about the   business and
technologies of CDMA/GSM/OFDMA/xDSL/VoIP/IPTV and
FTTx technologies. He is also experienced in
developing and marketing broadband and wireless
network systems and products. Mr. Samudra has
spoken at internationally recognized conferences
on topics ranging from market and technology
forecasts, planning and deployment and is a
member of the Board of Directors for the
prestigious industry standards alliance ATIS.
Recently he managed nationwide VoIP deployment
and an IPTV trial in the US. He is knowledgeable
in the telecom vertical segment, key players,
their strategies, and prospects for future agents
of and in next-gen wireless technologies such as
3G/3G LTE/Super 3G and 4G, broadband access and
core networks.
3
  • Table of Contents
  • What is WiMAX?
  • Who can Benefit?
  • What are the Costs, Threats, and Issues?

4
WiMAX Making A Business Case
  • Pradeep Samudra
  • January 10, 2007

5
Contents
  • WiMAX1 Technology
  • Competition to WiMAX
  • Benefits of WiMAX
  • Costs Associated with WiMAX
  • Issues Unresolved
  • Crystal Ball

1 Worldwide Interoperability for Microwave
AX(ccess) (A trademark of the WiMAX Forum)
6
Wireless Access Technologies
Technology
2. Wireless LANs (802.11)
3. Broadband Wireless Access
1. Cellular (CDMA, GSM)
  • Enterprise/Hotspots
  • Fixed
  • High data rates
  • Data only
  • Successful Deployment
  • Outdoor
  • Fixed
  • High data rates
  • Mostly Data
  • Disappointing Deployment
  • Outdoor
  • Mobile
  • Medium data rates
  • Voice Data
  • Successful Deployment

A Key to Success Standards
7
Tech 1. Mobile Cellular Networks
Technology
1st Generation (1980s)
  • Analog cellular technology such as AMPS
  • Service Voice
  • Digital technologies TDMA, CDMA
  • Services Voice, Low-rate data, SMS

2nd Generation (1995)
2.5G/3G (2000)
  • 2.5G GPRS/EDGE, 3G UMTS, CDMA2000
  • Services Voice, High-speed data, MMS

3.5 Generation (2005)
  • HSDPA HSUPA 1xEV-DO (Rev A)
  • Service High-speed data

Data rates under 10 Mbps, not truly IP/packet
based, inefficient due to backward compatibility
requirements.
8
Tech 2. Wireless LANs
Technology
802.11 (1997-98)
  • First version
  • Data rates of 2 Mbps

802.11b (Wi-Fi) (2000)
  • Widely deployed
  • Data rates up to 11 Mbps

802.11a
802.11b/g (2004)
  • Current Deployment
  • Data rates up to 54 Mbps

802.11n (2007)
  • Next Gen Wireless LANs
  • Data rates over 100 Mbps

No support for mobility, limited coverage area
interference issues in unlicensed bands.
9
Tech 3. Broadband Wireless Access (BWA)
Technology
  • Typically deployed for fixed wireless access
    applications
  • An alternative to DSL
  • Emerging markets and rural areas
  • Suitable for cellular backhaul
  • Relatively new technologies
  • In existence since 2000
  • Commonly use non-cellular spectrum over 2 GHz
  • Plethora of technologies
  • Incompatible proprietary technologies

No support for mobility, mostly proprietary
systems with lack of support from major vendors
and service providers.
10
Why hasnt BWA taken off?
Technology
Lack of support from major players
Incompatible and proprietary technologies
BWA Issues
Competing Successful 2.5G/3G Deployment
Lack of business case
Lack of Mobility Compelling Services
Economic Conditions
At least 40 different incompatible solutions
on the market.
11
802.16/WiMAX Best of BWA
Technology
Support from major industry players
Open standards based network
Support for Mobility Next Generation services
802.16/WiMAX
Support for high data rates
  • IEEE 802 Committee
  • Physical Layer
  • RF, Power, Modulation, Coding
  • Fixed and Mobile
  • MAC Layer
  • Framing, Security, Scheduling
  • Handover/Mobility
  • Standards
  • - 802.16d and e (Ref interface R1)
  • WiMAX Forum
  • End-end Networking
  • - Reference architecture
  • Signaling, Network Mobility
  • Messaging
  • Standards
  • Ref interfaces R2-R8
  • Equipment Certification
  • Europe and Asia

WiMAX is a Data Service
12
WiMAX Defined
Technology
  • Differentiated Wireless Access Technology which
    provides
  • high Data Rates, that are
  • allotted flexibly, with
  • built in QoS and Security, supported through
  • complex scheduling algorithms, at a
  • relatively lower cost.

WiMAX uses Orthogonal Frequency Division
Multiple Access (OFDMA)
13
Mobile Wireless Multiple Access Technologies
Technology
Bold font strength of the technology
14
Technology
NEW DEVICE
NEW DEVICE
NEW DEVICE
NEW DEVICE
15
Competition to WiMAX
Competition
  • WiFi Mesh
  • Connect Wi-Fi islands with backhauls
  • Muni WiFi
  • 3G Cellular
  • Provide additional bandwidth for data centric
    applications
  • 3G LTE and emerging 4G
  • Fixed/Wireline
  • Cable, DSL, FTTP

WiMAX must be able to differentiate itself.
16
Competitive Access Technologies (Q1 2007)
Competition
Typical of the several possible
Bold font strength of the technology
17
Benefits of WiMAX
Benefits
  • Applications
  • Fixed/portable wide area services
  • Residential/SOHO high speed Internet access
  • SME voice/Internet access
  • Public safety, private MAN networks
  • Mobile access services
  • Cellular voice and high speed data
  • Cellular and WLAN/Hot spot backhaul services
  • T1 bypass

Considered a key differentiator
18
High Data Rates Can Create New Business
Opportunities
Benefits
WiMAX fits here!
19
WiMAX Deployment Cost Considerations
Cost
  • Demographics/Topography
  • Urban/Suburban/Rural-Exurban, Mountainous, Arid,
    Trees/other obstructions
  • Regulatory, Spectrum, Licensing, Competition
  • Density/Coverage/Customer base/Capacity

20
Capex Components
Cost
Laptop cards, handsets, PDAs
IMS Integration, handoff agreements with voice
nets, provisioning, configuring,
Accounting/billing, Fault Isolation, Maintenance,
Customer service
Source The WiMAX Forum White Paper
21
CPE Cost Curves
Cost
  • Likely to be at 500 when introduced
  • Need to be under 100 for mass adoption
  • Business model may be similar to
    cellular (give-away with contract lock-in)

Source The WiMAX Forum White Paper
22
Base Stations Urban
Cost
Source The WiMAX Forum White Paper
23
Urban Business Case
Cost
Source The WiMAX Forum White Paper
24
Emerging Markets Dynamics
Cost
Source The WiMAX Forum White Paper
25
Emerging Business Models
Cost
Fixed Telcos Cable Companies
DSL/Cable replacement in suburban/rural
areas Enterprise data/voice services
Portable/Mobile broadband services ATT, BT, KT
Mobile Operators
Separate network for data alone Next gen hot
zones (extension of hot spots) Cellular
backhaul SprintNextel, SKT
Facilities-based broadband service Enterprise
voice/data services Next gen hot zones
(extension of hot spots) Cellular
backhaul ClearWire, IrishBroadband
CLECs, WISPs Greenfield Operators
Municipality/government initiatives (digital
divide) Connectivity for remote locations (e.g.,
mining companies) M-Taiwan, N2015 (Singapore),
City of Philadelphia
Non-telecom Organizations
26
Issues
Issues
  • Universal Spectrum
  • 2.5 in US, 3.5 in 77 countries
  • Unlicensed vs licensed
  • RF cost is 40 of total
  • Technology Maturation
  • Large investment by large players
  • Technology evaluation is complex
  • IPR fees (0)
  • Technology Competition
  • Spectrum moratorium
  • Co-operation (CLEC status)
  • Backhaul
  • Lack of suitable capacity connectivity
  • End to end Network
  • OSS/BSS integration timeline
  • Data Applications
  • Ecosystem (OS, UI, eCommerce models)

27
Crystal Ball
Forecast
  • Fixed WiMAX
  • Questionable future
  • Mobile WiMAX
  • Great future in high growth emerging markets
  • 3G/4G will prevail in advanced markets
  • Candidates for Mobile WiMAX
  • Operators lacking mobile service
  • Mobile operators lacking inexpensive backhaul
  • Operators owning spectrum licenses
  • Geographic favorites
  • US, South Korea for the near term (2006-9)
  • DSL, 3G provide stiff competition
  • BRIC for the mid term (2008-12)
  • Attractive price curves

28
Critical Success Factors
Forecast
  • Spectrum issues resolved
  • Harmonization with 3G LTE
  • Attractive price points
  • Application pull leading to competition

29
Who is Interested in WiMAX?
Source Pyramid Research
30
Who is Using WiMAX Today?
  • US
  • SprintNextelQ4 WDC, Chicago
  • Clearwire
  • Vanu
  • Alltel
  • BellSouth (Fixed)
  • ATT/SBC (Nevada fixed)
  • 5GHz WISPs
  • Asia
  • Korea SKT
  • Japan KDD/NTT
  • China 3G allocations, WiMAX allowance
  • India Tech-neutral spectrum allocation (Tata
    Aperto)
  • Europe
  • UK BT
  • Germany ClearWire, NextWave Broadcom, Deutsche
    Breitband Dienste
  • France
  • Spain
  • Italy
  • Latin America
  • Brazil TVA (Samsung), Telephonica, Telmar,
    Brasil Telecom
  • Mexico TelMex
  • Argentina Entrach

Tech-neutral spectrum allocation
31
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32
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33
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