Global Insight Perspective | |
Significance | WiMAX has become part of 3G, joining W-CDMA, CDMA2000 and TD-SCDMA. |
Implications | Although the inclusion of WiMAX gives a boost to the development of the technology, it invariably distorts the focus towards a unified standard for 4G by creating another parallel standard to the existing GSM and CDMA paths. |
Outlook | Despite its benefits to the WiMAX community, the inclusion will remain academic because existing concerns over WiMAX remain. |
The upcoming wireless broadband technology WiMAX (Worldwide Interoperability for Microwave Access), got the nod late last week to become part of the bouquet of technologies comprising the IMT-2000 standard—the so-called 3G standard. In a meeting on 18 October, the International Telecommunications Union (ITU) agreed to include WiMAX in 3G, opening the way for operators with 3G licences to offer mobile services using WiMAX technology. At present, WiMAX services are on offer in the 2.5-GHz and 3.5-GHz bands, but the ITU's decision means WiMAX—also known by its standardisation acronym, IEEE 806.16—will now be rolled out in the 1.9-GHz core 3G frequency band.
The inclusion of WiMAX followed strong advocacy by U.S. negotiators. Richard Russell, the head of the U.S. delegation at the meeting, said the inclusion will ultimately benefit customers. "We strongly believe in an approach that includes as many technologies as possible, within the appropriate technical parameters, because diversity will lead to greater competition, lower prices and more benefits to consumers," he said. However, other countries, notably China, objected to the inclusion, with the tacit support of the GSMA, which had previously argued for the upholding of the existing 3G family of standards.
Outlook and Implications
- WiMAX Comes to the Fore: Although entrenched commercial interests have largely influenced the development of post-3G mobile broadband technologies, the inclusion of 3G in WiMAX opens the way for a more-generalised adoption of WiMAX technology. Crucially, WiMAX as part of 3G represents a paradigm shift in conception from WiMAX as part of a futuristic concept. Similarly, by becoming part of 3G, the initial upfront capital licensing cost associated with all new WiMAX roll-outs could be shelved for existing 3G licence holders. Together, the change in perception and the zero-licensing cost could help tilt opinion among operators that have spent billions in 3G licensing, to consider WiMAX.
- An Unwanted Distraction: While WiMAX proponents are heralding the inclusion as a major leap for WiMAX technology, it could turn out to be a giant step back for the mobile industry. Post 3G, the mobile industry has been seeking a unifying standard for the so-called 4G, with both existing GSM-based and CDMA-based operators edging towards a common Long Term Evolution (LTE) standard for 4G. The introduction of WiMAX changes all this, creating a new divergent standard that could potentially pose obstacles for a future effort to harmonise all 3G standards.
- WiMAX Demystified: Although this would hardly result in tumultuous implications, the inclusion of WiMAX in 3G is, at face value, a devaluation of the WiMAX hype. WiMAX ought to be part of 4G, and has been aggressively promoted as 4G, with its theoretical 70-Mbps speed touted as a massive differentiator from 3G technologies, including HSDPA. Thus, the urge to include WiMAX as part of 3G suggests a latent acknowledgement that WiMAX cannot meet the expectations of 4G and would have to be pitched as a 3G-grade service.
- Sceptical Telcos: Despite its obvious speed and range advantages, the inclusion of WiMAX in 3G will not radically alter the status quo, especially among European telcos. Most operators have already invested massively in 3G licensing and network roll-out, with further upgrade to HSDPA and increasingly, HSUPA. And without seeing a massive consumer interest in the speeds or services on offer, operators are seeking a low-cost upgrade to future mobile broadband services without the massive capital outlay associated with 3G. As such, the mobile industry relishes an evolutionary path to 3G and would remain sceptical of a WiMAX revolution.
- Who Cares?: The WiMAX issue is inadvertently repeating the hype surrounding 3G that nearly had catastrophic consequences for the mobile industry. As then, the industry is rushing to roll out a technology where there is little guaranteed consumer demand. Beyond the early adopter community, especially business users requiring mobile broadband services, there is little clamour by consumers for higher speed mobile services. Already, the first major massive WiMAX roll-out, Sprint's Xohm project, has suffered setbacks as concerns over its viability unsettled the operator, leading eventually to the exit of the company's chief executive (see United States: 9 October 2007: Sprint Begins Search for New CEO as Post-Paid Losses Continue).