WiMax promises to reduce costs and extend the range of
mobile internet access. But with many obstacles still to overcome,
it will not be viable for business just yet .
At first sight, the proposition for WiMax wireless technology is
compelling. It promises Wi-Fi functionality over a range measured
in kilometres rather than metres and it is backed by Intel, one of
the biggest names in the business.
However, for all its considerable promise, there are obstacles
that WiMax must overcome en route to world domination.
First of these is the implementation of a common IEEE WiMax
standard (802.16) - essential for the mass-production of
interoperable WiMax devices. Industry group the WiMax Forum has
only commenced certification testing for WiMax products in the past
few months.
It will be the end of the year at the earliest before actual
WiMax products that are certified as conformant with the 802.16
standard and interoperable with other suppliers' products hit the
market.
There are legal teething issues yet to be resolved - for
example, the spectrum frequencies to be allocated to the technology
- and matters such as obtaining planning permission for the
erection of new transmitters.
Secondly, even when it is possible to purchase WiMax products,
they will at first be for fixed, rather than mobile devices; the
version of the WiMax standard (802.16e) that will support mobile
devices was due to be finalised this month, but there has been no
indication when it will be ready.
It is unlikely that certified, interoperable, products based on
the mobile WiMax standard will be commercially available on any
sizeable scale before 2007.
Thirdly, and critically, business sponsors of WiMax will have to
work out how to make money out of the technology and attract paying
customers.
For equipment manufacturers, plentiful sales to network
operators are the order of the day. The putative network operators
themselves face other challenges: who are the customers for WiMax
services in 2007 through to, say, 2010?
A wireless operator seeking to compete in metropolitan areas
with incumbent broadband service providers will need a system that
is more attractive to existing broadband users than that offered by
their existing service provider, otherwise why change?
One must assume that incumbent cable and DSL providers will
adjust their tariffs in response to competition.
WiMax-enabled mobile devices - particularly those running VoIP -
would directly challenge the markets of the incumbent telecoms
operators.
In Western Europe, those operators are firmly committed to the
success of 3G - the licence fees they have paid ensure that - and
they will rightly regard WiMax mobile devices as a threat when they
emerge. To be successful, mobile WiMax devices will have to capture
the public imagination despite the resistance that mobile phone
companies will maintain.
Where then for WiMax? Even for those not carried away by the
hype, WiMax remains an exciting proposition - how could it not be,
when it has the potential to usher in an age of free internet
access for anyone carrying a device powered by an Intel chip?
But once it has overcome the technical challenges, it will be
ranged against established industries - fixed and mobile telephony,
even broadcasting - with businesses and customers to protect.
In Western Europe, WiMax may be destined to be merely one of
many available broadband solutions along with cable, DSL and 3G. It
will be fascinating to see whether WiMax's extremely enthusiastic
backers can accomplish more than that.
Simon Phillips is a partner in the international
communications group at law firm Bird & Bird