Om Malik takes some sound shots at WiMax. He is noting that not all regions are selecting the same spectrum. — Iain — full post follows —
One of the big arguments made in the favor of WiMAX becoming a viable broadband option is the economies of scale. Many proponents of the technology believe that global standards at certain specific ranges of frequencies could allow chip makers access to a big market that justifies spending millions developing silicon.
Such standards could also bring scale economics to gear makers. In ideal conditions, that is. However, we have started to observe some disturbing trends that run counter to the scale-is-the-salvation argument, at least anytime soon. Concerns both about multiple frequency ranges as well as the question of fixed vs. mobile flavors may keep WiMAX from scaling up quickly, making it more vulnerable to Wi-Fi and 3G/4G cellular alternatives.
India and China are often showcased as the big WiMAX opportunities, and with a reason. Booming economies and a lack of legacy wired infrastructure makes WiMAX perfect for the local needs. However, as we noted last week, India is opting for WiMAX in the 3.3-to-3.4 GHz band, a spectrum slice not available in say, the U.S. market. So there are spectrum conflicts that need to be thrashed out.
Similarly in China, China Netcom is deploying WiMAX systems in the 3.5 GHz band. Yesterday, In-Stat analyst Kevin Li cautioned that WiMAX might run into headwinds in China, because of a variety of issues. Amongst reasons they give: immature 802.16e product, competition from the 3G industry, and uncertain spectrum allocation.
In-Stat forecasts that, in an aggressive scenario, the subscriber base in China will increase from 8,000 in 2005 to 3,525,070 by 2010. In a conservative scenario, the subscriber base will grow to 1,234,120 by 2010.
India and China are not alone in deviating from the 2.5-to-2.69 GHz bands. Germans recently auctioned off 3.5 GHz spectrum to three companies – DBD, Clearwire and Inquam. While the WiMAX Forum is building standards for the most-used spectrum ranges, equipment providers will have to decide which market to chase.
The spectrum allocation, and the bands in which WiMAX networks get deployed will be crucial to the success of WiMAX. Small deviations – such as chips for different frequencies – can take away the scale (and thus the cost) advantages.
Deciding whether to implement fixed WiMAX (the current standard) or mobile WiMAX (the next flavor, which will permit Wi-Fi like roaming) is another question in front of gear makers. Again, something that needs to be answered before scaling and economic benefits can begin.