India promises to be WiMAX' Taiwan, but China closing doors on standards
Published: Monday 22 January, 2007
Of the two great hopes for near term wireless industry growth, India's promise is starting to be fulfilled, particularly for the nascent WiMAX community, while China is throwing up increasingly large obstacles, with its rising interest in developing its own alternatives to western-originated technology. While no vendor can afford to ignore China, even the largest WiMAX supporters are now seeing this market as a longer term prospect, at least where large scale mobile roll-outs are concerned, but by contrast, companies like Aperto are refocusing their business models heavily around the accelerating progress of India.
The potential of the Chinese market for 802.16 systems is muddied by many factors, including the repeated delays on decisions about 3G spectrum and technology - which will themselves impact the willingness to invest in mobile WiMAX; complex bureaucracy; uncertainty over the future structure and financing of some major operators; and the growing number of projects geared to developing homegrown technologies, notably in the areas of mobile television and broadband wireless. Although local operators have carried out many trials of fixed WiMAX for last mile applications, and the potential of that market remains vast as the huge country slowly extends access to its more rural communities, the prospect of the Beijing Olympics next year is diverting many initiatives towards short term fixes geared to infrastructure for those games. Indeed, China is now testing a potential rival to WiMAX with a view to using it in the Olympics and then extending it for fixed and nomadic systems in large cities from 2008.
According to EETimes, this technology is based on SCDMA and is called by its developers McWiLL (Multicarrier Wireless Internet Local Loop). The system has been trialled for voice, data and video in a few cities, such as Guangzhou and Qingdao, and reports high efficiency because it is used in the 400MHz spectrum, which supports very large cell sizes.
The most recent trial in Qingdao, where the Olympic sailing events will be held, was run by one of the key suppliers, Xinwei Telecom Technology, and was used to test the transmission of race information back to shore.
McWiLL combines SCDMA's traditional use in narrowband voice with a broadband data service tied into an IP-based core, using CS-OFDMA adaptive modulation, dynamic channel allocation and smart antennas to enhance its throughput. This hybrid approach is mirrored in the mobile television system that China has been developing, also with an eye to first commercial roll-out for the Olympics.
With McWiLL, a base station delivers 15Mbps per sector over 1-3 kilometers in an urban environment, using 5MHz of spectrum; while in 400MHz, the range extends from 20 to 60 kilometers in rural areas. Client devices using a 1MHz subcarrier were tested delivering download speeds of up to 100Mbps and 500Kbps upload, while traveling at 120 kilometers per hour. Xinwei has several devices in production, including access points, PCMCIA cards and modules for PDAs and it is prototyping a combination 3G/McWiLL handset.
The new technology gains much of its advantage - particularly its rural reach - from the spectrum rather than inherent technical superiority, but with sufficient support from the authorities, local vendors will certainly be encouraged to plough R&D resources into it, defocusing on WiMAX and making life more difficult for the 802.16 vendors. In the end, the operators will decide, and as they become more international in scope, they are likely to want to make a free choice of networks and take advantage of global economies of scale. In the short to medium term, however, this will be a tough market for WiMAX - subsidies and other incentives will make McWiLL and other homegrown systems financially attractive in the days before WiMAX itself has achieved scale, and the pressures of the Olympics are likely, at least temporarily, to divert attention from other projects and technologies.
By contrast, India is coming out of a period of bureaucratic hesitation - which had threatened to dilute its government's ambitious vision for a universal, regenerated broadband infrastructure - and making energetic efforts to use wireless to help turn the country into a leading global economic powerhouse. With extremely low levels of wireline build-out, even at basic telephone line level, (50m telephone lines and 10m broadband lines in the whole country), India has seen rapid growth in mobile phone usage and so wireless is the natural medium for broadband expansion too, with a threefold focus encouraged by its visionary administration - digital cities for immediate economic impact and to appeal to international businesses; true broadband for the cities and suburbs, to extend the boom conditions of hi-tech cities like Bangalore further afield; and finally, rural access to promote social inclusion, e-government and wide scale regeneration.
Every WiMAX vendor is interested in India, of course, but those that stand to gain most immediately are the traditional suppliers, with products to offer right now, and those with expertise in GSM integration and multimode handsets. India will be a strong testing ground for what should be the most important WiMAX model in the medium term - in countries where 3G has not been built out or fails to find an economic model, there will be a strong logic to using WiMAX as a nomadic, high bandwidth overlay to the GSM network, which is retained for low cost voice and full mobility. This takes the pressure off the area where 802.16 currently struggles - full mobility at low cost - and allows operators to take a more gradual, scaled approach to WiMAX roll-out than mobile voice would allow. A common pattern will be to start with fixed last mile access for underserved but relatively wealthy areas, to kickstart organic growth; then extend this to nomadic business services and urban metrozones, with users falling back to GSM when out of range; and finally, as the economics shift and new CPE appears, spreading broadband wireless even to poorer communities, leveraging the existing customer systems of the GSM network.
This will make the GSM/WiMAX dual-mode device one of the most critical success factors for WiMAX outside the 3G world, and we can expect Motorola and Nokia, in particular, to thrive here, as well as companies like Alcatel - with its joint venture with Indian research center C-DOT - working on very low cost subscriber units.
Because the focus will be on fixed and nomadic systems, and in some urban and suburban areas the need for broadband is urgent, India will be an important market for traditional WiMAX vendors in 2008, giving them the chance to steal a march on larger competitors in the period before those giants bring products to market. Intel's Rosedale 2 chipset, which allows for software upgradeability from 802.16d to 802.16e, reduces the risk of implementing WiMAX before 'e' products are available, although for India - with a low penetration of laptops outside the major business centers - it will be vital to incorporate such functionality in other CPE types too.
The suppliers making the most progress in India currently are Aperto and Alvarion, both of which followed years of trials of pre-WiMAX and 802.16d equipment with tier one customer wins. Aperto is refocusing much of its business around the subcontinent, as it looks for an early WiMAX revenue stream and a differentiating factor to ward off the threat of being swamped by the major vendors' launches later in the year. According to marketing chief Manish Gupta, 50% of the company's R&D is now in India, partly to support the needs of local customers, and partly to leverage the country's famously highly trained and inexpensive hi-tech skills base. Aperto is also investing in a joint venture for board development and will be manufacturing CPE in India this year, followed later by base stations.
This highlights another aspect of India's multifaceted and ambitious broadband wireless policy - not only to attract well priced technology to support its own operators, but to create a homegrown ecosystem to ensure that much of the revenue from the wireless expansion benefits the Indian economy. In pursuit of this goal, the country is looking to create a wireless and electronics manufacturing base to rival Taiwan's and geared to meeting the most exacting pricing demands in the world - those of Indian operators themselves. This is a trend that will have the effect - just as the Taiwanese entry into WiMAX is having - of accelerating the downward pressure on prices for the whole world, especially in CPE.
Gupta says: "In the Middle East we can sell CPE at $300-$350, in the rest of the world it's coming down to $280, in Spain $250 - but India wants $150, yet the cost from a Taiwanese ODM is still $200. The Indian ecosystem is not as robust as Taiwan's but in India we can get the costs under $150, even down to $120." Many believe that Taiwan's role as the ultra-low cost supplier that it has been in cellular and Wi-Fi will be different in WiMAX, as the manufacturers increasingly focus on earlier market entry, promoting their own brands, and creating higher value devices. There is also less competition in Taiwanese WiMAX than other technologies, partly because of Intel's early decision to give all its business to GemTek alone, leaving the other manufacturers to focus on more niche activities, at least until other giants like the handset makers come fully into play.
Aperto has deals with two major Indian carriers - BSNL for an initial 10 cities, and VSNL for an expansion from an existing proprietary Aperto PacketWave last mile system to 802.16d-based PacketMAX. It is also working with smaller operators, state-level initiatives and digital city projects. These projects are enabling it to prove its technology in large scale roll-outs with carrier-class quality of service, having got to market first with equipment for the 3.3GHz band, which India uses rather than the more international 3.5GHz (though it is opening up 3.5GHz later this year too). This has given Aperto an entry to tier one contracts that would have been hard to achieve with a top carrier in a mature wireless economy, and a chance to build a foothold before the giant manufacturers enter the space. In particular, the local joint venture makes it easier for Aperto to act as an indigeneous provider, with the political clout that brings, and this, combined with an installed base for PacketMAX, should position it to make good partnerships with large competitors as the market scales up (Aperto already sells through Alcatel Lucent and others in some territories).
Alvarion is also seeking to boost its profile, attractiveness to partners and first stage WiMAX revenue streams by being highly active in India, where it has considerable experience through its proprietary networks. Its biggest win so far has been with Aircell, via its OEM deal with Siemens - the mobile giant being an early example of the model outlined above, adding broadband capabilities as required by the user base, to overlay its cellular voice-oriented network. Although it has not put as many eggs in the Indian basket as Aperto, Alvarion is hopeful that its recent CPE developments - a Taiwanese joint venture with Accton for low cost subscriber units, and a Wi-Fi/WiMAX strategy - should improve its economics for the demanding Indian carriers. "India is the new Korea," said head of marketing Carlton O'Neal.
But a Korea with the second largest population on earth, a well developed democratic and economic system, ambitions to move rapidly into the world's top 10, and - critically for the WiMAX players - no tier one vendor of its own in an incumbent position. India has finally realized what China has not - that by holding out the carrot of its vast buying power to the world's suppliers and R&D houses, it can influence the direction of a whole industry, gaining cutting edge technology and low costs for its operators and luring experienced companies into a new ecosystem that could usurp the role of Taiwan. This will represent a more surefire route to twenty first century infrastructure and a global role in next generation wireless than China's decision to create its own technologies from scratch, denying itself the decades of R&D and manufacturing experience that have gone into the international standards.
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