WiMAX Hype Vs. Reality

By Andrew M. Seybold — November 07, 2008

The buzz surrounding the introduction of WiMAX reached a point of total hype about six months ago. The good news is that, as we get closer to the launch in the United States, those who are building the networks have begun to understand that they now need to be talking in realistic terms.

At the SiRF Location 2.0 Summit in San Francisco in September, Barry West, president of Sprint's Xohm WiMAX organization, talked about many of the advantages of WiMAX. While he did not mention the size of a typical cell site, he did promise customers would get between 2 Mbps and 4 Mbps down to the device and 1 Mbps to 1.2 Mbps up to the cell site. These are good data speeds, but all wireless broadband systems are shared bandwidth, meaning that the more customers using the service in a given cell sector the slower the data speeds.

Still, if you compare these quoted speeds with Verizon and Sprint's EV-DO Rev A and AT&T's UMTS/HSPA data speeds, you find that they are only marginally better for a single user. However, because WiMAX has more spectrum in which to deploy its technology, the impact of bandwidth sharing should be less noticeable.

Today's 3G data speeds on AT&T, Verizon and Sprint will get faster over the next year or 18 months, and when that happens they will be on a par with the system being rolled out by the new Clearwire/Sprint/cable company that will be known as Clearwire.

WiMAX works, of that there is no doubt, but Clearwire's WiMAX is on the 2500-MHz band, well above the 850-MHz and 1900-MHz bands used by 3G operators. This means Clearwire will have to build more cells closer together to cover the same geography. It has been estimated that using the new 700-MHz spectrum, the incumbents could cover 75% of the U.S. population (not geography) with about 22,000 cell sites. At 2500 MHz, 65,000 cell sites will be required to cover that same 75%. Even if the cost per site is less, the overall system build-out will rival the cost of building out a conventional 2G/3G network.

WiMAX is being deployed in many other parts of the world including Japan, but in some areas such as Europe, it has not yet caught on. In other places, spectrum has not yet been reallocated for wireless broadband services. So for now, the Clearwire play is strictly a U.S. play. Companies that need coverage in other parts of the world will be better off sticking to cellular technologies (EV-DO Rev A or UMTS/HSPA) because of their worldwide presence.

Finally, Clearwire is expecting the bulk of its traffic to come from the consumer side of the business, including new wirelessly enabled consumer appliances, which is another good reason for corporate planners to take a wait-and-see posture and continue to deploy wireless broadband systems on the current 3G networks that provide coverage both in and out of the United States.

Andrew M. Seybold is President/CEO of Andrew Seybold Inc.


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