Waiting for the WiMax wireless revolution

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 .


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

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