wimax business case

GLG InstituteWednesday, January 10, 2007The Penn Club, New York

WiMAX – Making a Business Case _______________________________________

Pradeep Samudrai, Former Vice President, Samsung Telecommunications

Pradeep Samudra, now an independent consultant was most recently (10/06) a Vice President at Samsung Telecommunications. He has over 25 years of experience in the telecommunications industry. He is a holder of 4 recent patents and 6 pending applications in the area of IP/MPLS/ATM routing and is knowledgeable about the business and technologies of CDMA/GSM/OFDMA/xDSL/VoIP/IPTV and FTTx technologies. He is also experienced in developing and marketing broadband and wireless network systems and products. Mr. Samudra has spoken at internationally recognized conferences on topics ranging from market and technology forecasts, planning and deployment and is a member of the Board of Directors for the prestigious industry standards alliance ATIS. Recently he managed nationwide VoIP deployment and an IPTV trial in the US. He is knowledgeable in the telecom vertical segment, key players, their strategies, and prospects for future agents of and in next-gen wireless technologies such as 3G/3G LTE/Super 3G and 4G, broadband access and core networks.

Table of Contents

What is WiMAX?

Who can Benefit?

What are the Costs, Threats, and Issues?

WiMAX – Making A Business Case

Pradeep Samudra

January 10, 2007

Pradeep Samudra January 2007 of 27

Contents

• WiMAX1 Technology• Competition to WiMAX• Benefits of WiMAX• Costs Associated with

WiMAX• Issues Unresolved• Crystal Ball

1 Worldwide Interoperability for Microwave AX(ccess)(A trademark of the WiMAX Forum)


Wireless Access Technologies

2. WirelessLANs

(802.11)

1. Cellular(CDMA, GSM)

3. BroadbandWirelessAccess

A Key to Success: Standards

• Outdoor• Mobile • Medium data rates• Voice & Data• Successful Deployment

• Enterprise/Hotspots• Fixed• High data rates • Data only• Successful Deployment

• Outdoor• Fixed• High data rates• Mostly Data• Disappointing

Deployment

Technology


Tech 1. Mobile Cellular Networks

• Analog cellular technology such as AMPS• Service: Voice

• Digital technologies; TDMA, CDMA• Services: Voice, Low-rate data, SMS

• 2.5G: GPRS/EDGE, 3G: UMTS, CDMA2000• Services: Voice, High-speed data, MMS

3.5 Generation

(2005)

• HSDPA & HSUPA & 1xEV-DO (Rev A)• Service: High-speed data

1st Generation

(1980s)

2nd Generation

(1995)

2.5G/3G (2000)

Data rates under 10 Mbps, not truly IP/packet based, inefficient due to backward compatibility requirements.

Technology


Tech 2. Wireless LANs

• First version• Data rates of 2 Mbps

• Widely deployed• Data rates up to 11 Mbps

• Current Deployment• Data rates up to 54 Mbps

• Next Gen Wireless LANs• Data rates over 100 Mbps

802.11(1997-98)

802.11a

802.11b(“Wi-Fi”)

(2000)

802.11b/g(2004)

802.11n(2007)

No support for mobility, limited coverage area & interference issues in unlicensed bands.

Technology


Tech 3. Broadband Wireless Access (BWA)

• Typically deployed for fixed wireless access applications– An alternative to DSL– Emerging markets and rural areas– Suitable for cellular backhaul

• Relatively new technologies– In existence since 2000

• Commonly use non-cellular spectrum over 2 GHz

• Plethora of technologies– Incompatible & proprietary technologies

No support for mobility, mostly proprietary systems with lack of support from major vendors and service providers.

Technology


Why hasn’t BWA taken off?

BWA Issues

Economic Conditions

Lack of support from major players

Competing &

Successful 2.5G/3G

Deployment

Lack of Mobility & Compelling

Services

Lack of business

case

Incompatible and proprietary

technologies

At least 40 different incompatible solutions on the market.

Technology


802.16/WiMAX – Best of BWA

802.16/WiMAX Support for

high data rates

Open standards

based network

Support for Mobility &

Next Generation

services

Support from major industry

players

IEEE 802 CommitteePhysical Layer- RF, Power, Modulation, Coding- Fixed and MobileMAC Layer- Framing, Security, Scheduling- Handover/MobilityStandards- 802.16d and e (Ref interface R1)

WiMAX ForumEnd-end Networking- Reference architectureSignaling, Network Mobility-MessagingStandards- Ref interfaces R2-R8 Equipment Certification- Europe and Asia

WiMAX is a Data Service

Technology


WiMAX Defined

• Differentiated Wireless Access Technology which provides– high Data Rates, that are– allotted flexibly, with– built in QoS and Security, supported through– complex scheduling algorithms, at a– relatively lower cost.

WiMAX uses Orthogonal Frequency Division Multiple Access (OFDMA)

Technology


Mobile Wireless Multiple Access Technologies

TDMAGSM/GPRS

(W)CDMACDMA2000

OFDMA(802.16e/WiMAX)

1 Technique Dedicated time slots per user

Dedicated Code per user

Varying frequency assignment per service

2 Spectrum (MHz except where noted)

Cellular and PCS(700/800,

1800/1900)

Cellular and PCS(700/800,

1800/1900)

2.5-3.5-5 GHz; may also use Cellular and PCS

3 BW Allocation

Fixed Not applicable Varying in time and freq.

4 Optimized for

Voice Voice Data

5 Voice BW 8-12 Kbps 4-8 Kbps 60 Kbps (VoIP)

6 Data rate 9.6-64 Kbps > 400 Kbps <15 Mbps

7 Video NA Streaming Full Mobile, HD

8 QoS & Security

NA NA Built in MAC

9 Examples AT&T, Cingular, Nextel

Verizon, Sprint, Alltel

Sprint, Clearwire

Bold font = strength of the technology

Technology


NEW DEVICENEW DEVICE

NEW DEVICE

NEW DEVICE

Technology


Competition to WiMAX• WiFi Mesh

– Connect Wi-Fi islands with “backhauls”

– Muni WiFi

• 3G Cellular– Provide additional bandwidth for

data centric applications– 3G LTE and emerging 4G

• Fixed/Wireline– Cable, DSL, FTTP

WiMAX must be able to differentiate itself.

Competition


Competitive Access Technologies (Q1 2007)

WLAN Cellular 3G

xDSL Cable FTTP 802.16e/ WiMAX

1 Technology

OFDM/TDM

T/F/CDMA OFDM FDMA Digital OFDMA

2 Spectrum Unlicensed Licensed Dedicated

Shared Shared Licensed

3 BW Allocn Fixed Semi-fixed Semi-fixed

Fixed Fixed Flexible

4 Data rate* 15Mbps 1Mbps 8Mbps 15Mbps

15Mbps 15Mbps

5 Distance 50 M 2-5 KM 1 KM 1 KM 8 KM 2-5 KM

6 Voice VoIP TDM POTS VoIP VoIP VoIP

7 Video Streaming Streaming Streaming, HD

RF, HD

RF, HD Streaming, HD

8 Security MAC/IP IP IP IP IP MAC/IP

9 QoS MAC TDM/ATM

ATM MAC ATM, IP

MAC

10 Mobility Portable Mobile Fixed Fixed Fixed Mobile

11 Cost (incr)

Low Medium Low Low High Medium* Typical of the several possible Bold font = strength of the technology

Competition


Benefits of WiMAX Applications

– Fixed/portable wide area services • Residential/SOHO high speed Internet access• SME voice/Internet access• Public safety, private MAN networks

– Mobile access services• Cellular voice and high speed data

– Cellular and WLAN/Hot spot backhaul services

• T1 bypass

Considered a key differentiator

Benefits


High Data Rates Can Create New Business Opportunities

WiMAX

fits

here!

Benefits


WiMAX Deployment Cost Considerations

• Demographics/Topography– Urban/Suburban/Rural-Exurban, Mountainous,

Arid, Trees/other obstructions

• Regulatory, Spectrum, Licensing, Competition• Density/Coverage/Customer base/Capacity

Urban Suburban Rural

Cost


Capex Components

Source: The WiMAX Forum White Paper

Laptop cards, handsets, PDAs IMS Integration, handoff agreements

with voice nets, provisioning, configuring, Accounting/billing, Fault Isolation, Maintenance, Customer service

Cost


CPE Cost Curves– Likely to be at $500 when introduced– Need to be under $100 for mass adoption– Business model may be similar to cellular

(give-away with contract lock-in)


Cost


Base Stations – Urban


TDD

Cost


Urban Business Case


Cost


Emerging Markets’ Dynamics


Cost


Emerging Business Models

Fixed Telcos &Cable Companies

Mobile Operators

CLECs, WISPs &GreenfieldOperators

Non-telecomOrganizations

DSL/Cable replacement in suburban/rural areasEnterprise data/voice services Portable/Mobile broadband servicesAT&T, BT, KT

Separate network for data aloneNext gen “hot zones” (extension of hot spots) Cellular backhaulSprintNextel, SKTFacilities-based broadband serviceEnterprise voice/data servicesNext gen “hot zones” (extension of hot spots) Cellular backhaulClearWire, IrishBroadbandMunicipality/government initiatives (digital divide)Connectivity for remote locations (e.g., mining companies)M-Taiwan, N2015 (Singapore), City of Philadelphia

Cost


Issues• Universal Spectrum

– 2.5 in US, 3.5 in 77 countries– Unlicensed vs licensed– RF cost is 40% of total

• Technology Maturation– Large investment by large players– Technology evaluation is complex– IPR fees (“$0”)

• Technology Competition– Spectrum moratorium– Co-operation (“CLEC” status)

• Backhaul– Lack of suitable capacity & connectivity

• End to end Network– OSS/BSS integration timeline

• Data Applications– Ecosystem (OS, UI, eCommerce models)

Issues


Crystal Ball• Fixed WiMAX

– Questionable future• Mobile WiMAX

– Great future in high growth emerging markets

– 3G/4G will prevail in advanced markets• Candidates for Mobile WiMAX

– Operators lacking mobile service– Mobile operators lacking inexpensive

backhaul– Operators owning spectrum licenses

• Geographic favorites– US, South Korea for the near term (2006-9)

• DSL, 3G provide stiff competition– BRIC for the mid term (2008-12)

• Attractive price curves

Forecast


Critical Success Factors

• Spectrum issues resolved• Harmonization with 3G

LTE• Attractive price points• Application “pull” leading

to competition

Forecast


Who is Interested in WiMAX?

0%

5%

10%

15%

20%

25%

30%

35%

Fixed T

elcos

Mob

ile O

pear

tors

WIS

Ps

Altern

ate

Carrie

rs

Other

s

Su

rvey

ed O

per

ato

rs

Source: Pyramid Research


Who is Using WiMAX Today?

• US– SprintNextel:Q4 WDC,

Chicago– Clearwire– Vanu– Alltel– BellSouth (Fixed)– AT&T/SBC (Nevada – fixed)– 5GHz WISPs

• Asia– Korea: SKT– Japan: KDD/NTT– China: 3G allocations,

WiMAX allowance– India: Tech-neutral

spectrum allocation (Tata – Aperto)

• Europe– UK: BT– Germany: ClearWire,

NextWave Broadcom, Deutsche Breitband Dienste

– France– Spain– Italy

• Latin America– Brazil: TVA (Samsung),

Telephonica, Telmar, Brasil Telecom

– Mexico: TelMex– Argentina: Entrach

Tech-neutral spectrum allocation

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