Fall-back position for Wimax providers

16 Oct 2008
00:00

Perhaps you are a fixed-line service operator and the government has just changed your license so you can now provide mobile services. Or you are a newcomer to the market, wanting to provide next-generation wireless service. You've built your business plan on using Wimax, assuming that you will gradually deploy your network over the next year and a half. But you find yourself facing a major issue: what are your customers going to do for phone and data services when they roam out of your coverage area‾

One Plan B option is to cement a relationship with a 3G operator. On paper, Wimax can provide data rates of up to 70 Mbps. In actuality, these speeds are only achievable at very short distances from base stations. More practical data rates are 10 Mbps for customers located 10 km from a base station.

HSDPA is widely deployed with typical rates of 1 to 2 Mbps. HSPA+ will, on paper, provide up to 42-Mbps rates. Still below the 70-Mbps maximum rate that Wimax hopes to achieve. So there is a marginal, technical rational for a 3G operator to cement a relationship with a Wimax operator (or to deploy Wimax himself if he can't wait for LTE).

But realistically, Wimax and HSPA are targeting the same customer base: heavy data users, who are usually around city and business centers. So there really aren't service continuity benefits between mobile Wimax and 3G operators.

In addition, there is a very good reason for the Wimax operator not to couple up with a 3G operator. While 3G operators claim to provide coverage for 80% of the population, that doesn't mean that they are providing 80% coverage of a market's landmass, or even 10% - at least for markets other than Singapore or Hong Kong. Remember, the original problem for the new Wimax provider is to be able to provide wide service-area coverage while in the process of deploying a network. So Plan B needs to be with a partner offering much wider geographic coverage and being a less competitive threat.

A 2G partner

The next option to consider is to cement a relationship with a 2G operator. Even with EDGE, a 2.5G operator is data-rate limited. Though EDGE does meet the ITU requirement for a 3G network, its data-rate is limited to a range of 200 to 500 kbps, depending on the number of timeslots the system allocates. In essence, GSM is more about voice; Wimax is more about data. So, a 2GSM/Wimax relationship is of value to both sides.

The obvious advantage for the Wimax provider is that 2G is already deployed nationwide in many places. (For example, check out the current coverage maps for GSM at http://www.gsmworld.com/roaming/gsminfo/index.shtml.) The Wimax operator can provide customers wide phone coverage while in the course of deploying the Wimax network.

From a business point of view, there are several options on how to implement a 2G/Wimax operating capability. All the options are dependent on a new class of handsets - those providing both Wimax and GSM receiving and sending capabilities. Given that dual-mode handsets will soon be available, what are the options available to find a partnership‾

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