Nokia and the WiMAX Forum: Good-Bye; Hello Again, We like the 'e' Version
>> Nokia Quits WiMAX Forum
Wireless Watch
10th May 2004
theregister.co.uk
In a shock move, Nokia has left the WiMAX Forum, indicating a U-turn on the technology it once promoted enthusiastically. Nokia was a founding member of the Forum, before Intel joined and raised 802.16's profile beyond recognition, and during 2003 was bullish about the technology, with development projects surrounding base stations for rural regions and 802.16e handsets.
Now, the company has decided not to renew its membership, claiming that its short term priorities are to concentrate on 3G and Wi-Fi. It says it will continue to monitor WiMAX closely and so is likely to take a role again if the technology goes main-stream, but does not see a short term business case.
The surprise lies not so much in taking a more cautious approach to WiMAX - Nokia's primary interest always seemed to lie in handsets, which are some years off - but in the drastic step of breaking ties with the Forum. Even if 802.16 no longer forms a central part of the short to medium term product strategy, companies of Nokia's size and R&D clout tend to remain involved in any industry bodies, even if they do not take a highly active role.
Therefore, it seems that the defection is meant to convey a statement to the market, although if the intention was to undermine confidence in WiMAX, the Finnish company needed to make rather more noise about its decision than simply removing its name from the membership list.
The most likely explanation seems to be that Nokia perceives a real threat from WiMAX equipment to its much-vaunted strategy of creating low cost cellular base stations for developing nations. Its efforts in this direction have progressed rapidly, so perhaps it no longer needs fixed WiMAX as a back-up option - it launched 'budget' cellular systems last year and, with its market share in developed regions slipping, is placing growth in China, India and Russia at the centre of its plans.
Although WiMAX could be the basis of such an expansion too, the rapid emergence of commodity silicon will depress prices and make the margins available to Nokia less attractive than on a proprietary cellular system, especially with rivals such as Alcatel and Siemens opting to build kit based on off the shelf Intel chips.
The decision of those two giants to deliver WiMAX base stations at an early stage - and in Siemens' case, handsets later on - will have destroyed any hopes Nokia had of gaining a significant head-start in the market. A year ago when Intel first joined the Forum that Nokia had founded, putting massive marketing weight behind the standard, there was very little indication that the big names would get involved, and Nokia could have expected to have the sector to itself for at least a year after the standard was ratified and to build on its closeness to Intel to create a product that was hard to leapfrog.
Now that picture has changed, and the attractiveness of the market must have fallen considerably with the looming prospect of a price battle with some major infrastructure competitors. Better to focus on an area where Nokia has taken a strong lead, in cut-price cellular networks and terminals for developing markets.
Depression in base station market
Nokia will certainly have come to have a certain fear of WiMAX as a technology that could deepen the already serious depression in infrastructure prices. Once it might have dreamed of charging premiums for the speed and spectral efficiency of 802.16 equipment - now it is more likely that WiMAX will increase the pressure on 3G prices, especially as software defined radio and blade technology allow for the simultaneous support of multiple networks within one base station.
Even without the WiMAX factor, and despite a cautious revival in telecoms investment, life remains hard for infrastructure suppliers - although Nokia is less exposed to this than other competitors since it derives less than 15 per cent of its revenues from equipment, unlike a highly dependent player like Ericsson. At a UK base station conference this week, vendors complained that they face a triple challenge - increasingly aggressive demands for price cuts from operators; higher R&D expenditure; and new levels of competition, especially with the emergence of low-cost Chinese players.
These factors are raising the prospect of the sector's average operating margin falling below 10 per cent for the first time, according to Eiii Aono, director of telecom equity research at Credit Suisse First Boston - and all three of them can be exacerbated by WiMAX. In 2000, the GSM base station market was at its peak and worth $30bn, but when W-CDMA peaks around 2007, it is likely to be worth only two-thirds of that, even though more units will have been shipped than in GSM.
The pressure is on for base station makers to use as many standardised modules as possible - as the auto industry does - in order to pool development and reap economies of scale in manufacturing. Currently, R&D spend stands at 17 per cent of sales for major vendors, compared to 13 per cent in 1999, which Nokia calls "unsustainable".
Targeting Developing Nations
The pressure to cut costs will be even higher in the developing countries, on which Nokia has pinned a large chunk of its growth plan, picking out India, China, Russia and South America as its main areas of focus. Although major operators in all these countries have shown interest in WiMAX, Nokia has clearly decided to attack with a unique offering and try to mop up market share with its cellular systems, which are widely reported to be ground breaking in price/performance, before WiMAX is sufficiently mobile to be a real competitor.
It can live happily alongside fixed wireless WiMAX, which is an alternative mainly to DSL and cable, not to cellular, but it does seem to be leaving the market for mobile 802.16 infrastructure and terminals wide open for a competitor to snatch. Siemens has put itself in a good position with its early move into fixed WiMAX, and the other Nokia rival to watch will be Samsung, which virtually invented HPi, the South Korean mobile broadband wireless technology that is likely to be merged with 802.16e. That will give the Korean vendor a huge headstart when WiMAX itself goes mobile.
Even if Nokia believes the WiMAX opportunity will not justify the R&D spend required to be at its forefront, the decision to abandon the Forum still seems extreme - especially as it was not done with sufficient sound and fury to be an effective way deliberately to undermine confidence in 802.16 and turn the floodlight back on to 3G. The genie is out of the bottle now. After many years when OFDM-based broadband wireless specialists complained that the MEN triumvirate (Motorola, Ericsson and Nokia) used their influence over operators to pressurise them not to toy with non-cellular technologies, now the boot is on the other foot.
After years of slump in the equipment sector, and with the slow growth of 3G, vendors are in a less strong position to dictate, and operators are desperate for networks that will enable them to offer premium services at low cost and risk. Nokia may turn its back on WiMAX but it is no longer in a position significantly to impede its progress with that decision. © Copyright 2004 Wireless Watch <<
>> Nokia to Rejoin WiMAX Forum
Tony Smith
The Register
18th June 2004
theregister.co.uk
Nokia is once again a member of the WiMAX Forum, having quit the organisation just over a month ago.
It's reason for returning to the fold? Everyone else is getting involved, so Nokia feels it has to play too.
Nokia's move to leave the Forum, made in early May, was something of a U-turn in its own right. As one of the Forum's founding members, Nokia has long promoted WiMAX with much enthusiasm. Intel's arrival and high-profile promotion of the technology seems to have been accompanied by a toning down of Nokia's own support.
At last it said it would not renew its membership, preferring instead to focus on 802.11 and 3G rather than 802.16.
A unnamed Forum member cited by Techworld claimed that Nokia had effectively been a silent partner for some time, and only left when it did because its membership subscription had naturally run its course.
Nokia's second U-turn, revealed earlier this week at the company's Connections conference, comes without a comparable shift of strategy. It still believes its short-term goals are best served though Wi-Fi and 3G, but it now accepts it can't ignore WiMAX given the support the technology is getting from other major telecoms industry players.
"The decision [to quit the Forum] was perhaps made too much on a practical basis rather than with regard to what the rest of the world is doing," Nokia's networking group general manager Sari Baldauf told reporters this week.
The company also pointed to the momentum building behind the mobile version of the standard, 802.16e, but that remains a longer-term technology. ® <<
Nokia's Evolving 3GSM & WiMax "Multi-Radio" Concept ...
... is defined graphically in these slides presented by Simon Beresford-Wylie, EVP of Nokia Networks at Nokia Connection 2005 in mid-June:
Nokia's Multiradio Strategy
tinyurl.com
Simon's webcast presentation is accessible here:
tinyurl.com
Below is an article on the same subject by Nokia's Kai Konola ...
>> WiMAX Will only Prosper Alongside HSPA
Kai Konola
Director of Strategy and Business Development
Nokia Networks
Telecoms.com
11 July 2005
tinyurl.com
Halfway through 2005, and the two great motors behind modern telecommunications are racing ahead. Fixed broadband access is booming. For the first time, more Europeans than Americans have a broadband Internet connection, making Europe the world's No. 2 broadband continent after Asia.
2005 is also seeing mobile becoming even more pervasive, with forecasts that western Europe will see 98% penetration by 2006, with service revenue growing 9% per year. And the commercialization of 3G service continues apace globally.
A combination of broadband and mobility looks like a natural development. Broadband wireless access (BWA) is very much today's buzzword. But how will it be achieved? There are some different technology paths.
Interest in broadband wireless access is being excited by new-entrant technologies, such as WiMAX, that appear to challenge how wide-area wireless communications have developed and how WCDMA 3G is building a way forward for mobile data and voice. Multiradio strategies that combine 3GPP, and BWA alternatives such as WiMAX, are going to be increasingly attractive to network operators. They want to find the right radio combinations for each business case.
Certainly, compared with a year ago, WiMAX has begun taking shape as a serious contender. Compared with WLAN, WiMAX e-version is planned to offer some mobility. On speed of access, which is critical to mobile data applications like e-mail and the web, we are going from the hundreds of kilobits cellular systems offer today to the proposed megabit bit rates of WiMAX. But if you're looking for a good fight, the contest between WCDMA and WiMAX isn't it. In fact, the relationship is likely to be much more complementary. There is a strong customer demand for Internet on the move. Mobile users already like accessing data.
Last summer, the data revenue of the 30 biggest operators was more than Eur7.5 billion (US$8.96 billion). Forecasts for how data revenues will grow are strong. In three years, data could be more than 25% of operator revenues and a global business worth more than Eur160 billion. Commercial WCDMA networks are coming onstream, with the inherent capabilities to handle current and future demand for both voice and data. As user numbers grow and demand increases, the WCDMA infrastructure offers an evolution path based on high-speed packet access (HSPA), which is a software upgrade to enable faster downlink (HSDPA) and uplink (HSUPA) speeds.
HSPA is very much a twin technology for WiMAX. It supports bit rates of 1-2 Mbps initially, and the standard defines speeds up to 14.4Mbps. It is optimized for the same mobile data applications, such as e-mail, that rely on faster access speeds. In the Internet-HSPA variant pioneered by Nokia, the network infrastructure is developed to a similar packet-optimized architecture as WiMAX is targeting.
Evolved 3G technologies, like I-HSPA, HSDPA and HSUPA, make tremendous commercial sense as core technologies considering there were already close to 26 million WCDMA subscribers worldwide at end-May. This evolution is already under way, with commercial trials in progress and the first commercial HSPA networks expected in early 2006.
So where does that leave WiMAX? The answer is: in a strong position, if it is alongside HSPA.
Noncellular WLAN wireless devices are hugely popular. WiMAX is a natural progression for what is shortrange technology, but it needs support. In fact, it needs to be part of the larger strategy for evolving high-speed data access from fixed to mobile. The viability of WiMAX depends on how it fits in rather than disrupts the infrastructure for mobility based on strategic investments in WCDMA and core-network technologies vital to how services are activated, provisioned and billed. Evolved versions of WiMAX present an opportunity for service providers to maximize broadband wireless access. WiMAX IEEE 802.16e will be standardized later this year, offering increased portability of broadband Internet access. The e-version of WiMAX complements 3G. It enables a number of applications, such as last-mile broadband connections, hot spots and highspeed enterprise connectivity, that do not directly compete with 3G at all.
A multiradio-access strategy addresses the next exciting phase for operators: the integration of multiple radio technologies in single devices for multiple applications from voice to e-mail to web to multimedia.
What customers will increasingly expect is fast access wherever they are, wherever they go. Service outages and interruptions are absolutely unacceptable. The goal has got to be invisible, yet omnipresent and reliable, connectivity. Local communications (Wi-Fi) and highcapacity wireless-broadband connectivity (WiMAX 'e' version) combined with cellular technology with wide-area full mobility is the way to realize this. No one should underestimate how challenging a multiradio strategy will be. Multiradio-access-network infrastructure and services combined with multiradio/ multiapplication devices will transform user experience. But success will lie in the ability to hide the vast complexity of its implementation entirely from the user. <<
- Eric - |
