Wi-Fi's big brother
Mar 11th 2004
From The Economist print edition
economist.com
Is WiMax a promising new wireless technology, or just a load of hot air?
IF YOU find it difficult to get excited by the details of a new wireless-data protocol, you are not alone. So what explains the current buzz in the telecoms and computer industries surrounding WiMax, a high-speed, long-range wireless standard? This week investors pumped $20m into Aperto Networks of Milpitas, California, one of several firms planning to launch WiMax products this year. Heavyweights such as Intel, Nokia and AT&T are lining up behind the standard. Sean Maloney, the head of Intel's telecoms division, says it will put “the next 5 billion users” on the internet. But whereas WiMax has promise, says John Yunker, an analyst at Pyramid Research, it is currently surrounded by much confusion and “a ton of hype”.
Indeed, all this is strongly reminiscent of the fuss over Wi-Fi, a popular technology that uses a small base-station plugged into a high-speed (broadband) connection to link laptops within 50 metres or so to the internet. Wi-Fi is undoubtedly useful—in 9% of American households, for example—but it is used mainly to provide wireless internet coverage inside homes, offices and schools. Few people seem to be prepared to pay for fee-based Wi-Fi access in “hotspots” in airports and railway stations, and schemes to cover whole cities with Wi-Fi and make expensive third-generation (3G) mobile-phone networks redundant have got nowhere. But whereas Wi-Fi provides coverage within a small hotspot, WiMax, which has a maximum range of 30 miles, could provide blanket coverage. It could, as a result, prove to be a far more useful, and disruptive, technology.
The internet
Mobile telecommunications
The initial aim of WiMax is modest: it will ensure compatibility between different vendors' fixed-wireless broadband equipment, which provides fast wireless-data connections between fixed points over long distances. This ought to help to expand the market for fixed-wireless access, since operators will no longer have to worry about being locked into vendors' proprietary technologies, and economies of scale will bring prices down. That is good news for people in rural areas, for whom broadband access—via cable networks or supercharged telephone lines—is often unavailable. Subscribers simply fix a WiMax receiver to the outside of their homes and plug it into a Wi-Fi base-station, or directly into a PC. In Britain, BT is already testing WiMax in four rural areas.
Another promising area for WiMax is for use as a wireless “last mile” in the developing world, since it can carry voice calls using voice-over-internet protocol. Instead of laying copper cables, network operators would set up far less expensive WiMax towers, and then install WiMax telephones in subscribers' homes. Internet access could also be provided. Mr Maloney says 20 or 30 operators in developing countries have expressed interest.
So far, this all sounds sensible. The cause of the excitement is what might happen next. At the moment, WiMax is a fixed technology. But if the technology can be scaled down to fit inside mobile devices, says Mr Yunker, “that changes everything”. Intel, the world's leading chip-maker, plans to make WiMax support a standard feature of most laptop computers starting in 2006 or 2007. By then, a mobile version of the WiMax standard is expected to have been approved.
It would then be possible to provide fee-based Wi-Fi-like coverage to mobile users over wide areas. This might have far more appeal than a service limited to a few hotspots; it would, for example, work in a taxi. Mobile WiMax could also be used in mobile phones, allowing fixed operators that have built WiMax networks to transform themselves into mobile operators. (No wonder BT, which sold its mobile-phone arm, is interested.)
Not everyone is convinced, however. According to Brian Modoff, an analyst at Deutsche Bank, Intel “has been drinking too much of the WiMax Kool-Aid”. For one thing, equipment vendors may be reluctant to push WiMax gear, since it could cannibalise sales of more lucrative 3G equipment. And operators are playing wait and see; they are reluctant to commit themselves until the technology is proven. Furthermore, few of them have the spectrum needed to deploy WiMax.
There is also opposition from some people in the mobile-telecoms industry. Turning WiMax from a fixed into a mobile standard is a crafty trick, they argue, since a separate mobile broadband standard, known as 802.20, is already in development. But the momentum of WiMax means 802.20 could be a dead duck, says Zvi Slonimsky of Alvarion, the leading maker of fixed-wireless gear and a strong backer of WiMax. Proponents of 802.20 retort that it will require less spectrum than WiMax, and will work in fast-moving cars and trains, which WiMax will not. Besides, mobile WiMax is still science fiction, notes Ronny Haraldsvik of Flarion, an equipment maker that is the leading advocate of 802.20. “The industry doesn't serve itself well by hyping something it can't deliver,” he says. Amid the hype and the confusion, WiMax is evidently worth keeping an eye on. Watch this airspace. |
