WiMax Not Cheap Or Easy, Carriers Say - InformationWeek
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10/26/2005
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WiMax Not Cheap Or Easy, Carriers Say

The costs of implementing the new wireless technology are still too steep for widespread deployment, say carriers who have WiMax trials underway--which could mean it will be a while before it's a viable option for most enterprises.

LAS VEGAS, Nev. -- Sometimes hailed as telecom's next conquering hero, the technology known as WiMAX was deemed too expensive and too complex for immediate widespread deployment, according to carriers who have WiMAX trials underway.

At a panel discussion Tuesday at the USTA Telecom '05 show here, a panel of WiMAX equipment suppliers and telephone service providers debated whether or not carriers would "take the leap" and implement WiMAX, a broadband wireless technology that offers the promise of being a "third pipe" to compete with cable modems and DSL.

Their verdict? Someday, maybe, but not right now, since equipment costs, spectrum issues and implementation procedures make it tough to offer WiMAX services at a competitive price point. "It's going to take some time before WiMAX is a real competitor," said Aamir Hussain, director of engineering at Qwest, which has extensive WiMAX trials underway.

To really become attractive to carriers, WiMAX needs to have customer-premise equipment in the sub-$100 range, Hussain said. While such equipment is currently priced in the $500-600 range, Hussain said emerging standards and economies of scale should push the prices down rapidly, reaching the below-$100 mark by the end of 2007. Equipment for carriers is equally costly, in the $2,500-$5,000 range per terminal, Hussain said. But those prices should to drop below $1,000 per terminal in a few years, he predicted.

Almost all the panelists agreed that WiMAX would survive as part of a mix of access technologies. Mick Reeve, group technology officer for British Telecom, claimed that CTOs of most major carriers already have WiMAX trials underway, and that the first iterations of WiMAX -- which only support "fixed" or stationary end-user points -- will likely be marketed as DSL replacement services, offering "realistic" service of between 1 Mbps and 2 Mbps of bandwidth.

"The real question is whether or not carriers will take the leap to mobile WiMAX," Reeve said, speaking of a future version that will support mobile users, much as Wi-Fi hotspots support wireless laptop use. Right now, "the business case for mobile WiMAX is tough," Reeve said.

Another hindrance for WiMAX is the lack of a worldwide standard slice of spectrum for the services to operate in. In Europe, the 3.5 GHz band is popular for WiMAX, but that spectrum is unavailable in the U.S.; instead, U.S. carriers are experimenting mainly in the bands at 2.5 GHz and the unlicensed 5.8 GHz range.

The lack of a standard spectrum will keep equipment prices high, noted RBOC CTOs in their panel at the USTA show. And while the possibility of more-attractive spectrum in the 700 MHz range may exist (especially if the current analog TV spectrum in the U.S. is auctioned off to wireless users), it's not a solid enough prospect to bet a business on yet, the carrier reps said. The lower-range spectrum is more attractive because it allows greater penetration through building walls.

"The spectrum at 700 MHz could be good, but a lot of stuff still has to happen, and the moons and stars need to align properly," said Hussain, describing the state of the spectrum-availability issues. "For carriers who want to move in this [WiMAX] direction, I have one word," Hussain said. "Caution."

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