Ofcom's decision to auction off a 192 MHz segment of the 2.6 GHz radio spectrum in the first quarter of 2008 may open the way for a controversial nationwide introduction of mobile WiMax into the UK.
The regulator expects to publish the terms of the auction in October or November this year, but is currently still evaluating whether to run it in one or more rounds, and how it should package up the spectrum.
But the move could prove a contentious one among existing operators, because mobile WiMax has variously been pitched as a potential usurper of 4G — the successor to curren-day 3G cellular networks — and as a rival to Wi-Fi wireless technology, into which operators have sunk a lot of money already.
So what is mobile WiMax, and where are potential conflicts likely to appear?
WiMax is a long-range, high-bandwidth wireless technology that is optimised for data traffic but, unlike Wi-Fi, it does not require line of sight — that is, no obstacles — to operate. The technology is based on the IEEE 802.16 family of standards for wireless metropolitan area networks and was given its name — Worldwide Interoperability for Microwave Access — by industry group the WiMax Forum, which was set up in June 2001 to promote it and certify accredited products as interoperable.
Mobile WiMax, meanwhile, is based on the 802.16e-2005 standard and can be used in a truly mobile fashion, by devices such as phones, and in a nomadic sense, by machines such as laptops.
Where mobile WiMax is expected to garner particular interest, however, is in developing countries that currently have only a limited wired infrastructure in place. This is because the costs involved in installing WiMax stations to complement existing cellular towers are likely to be lower than introducing fixed pipes from scratch, particularly in areas of low population density where the terrain is flat.
Some cellular operators in parts of the developed world are also touting mobile WiMax as a means of increasing bandwidth for data-intensive applications such as multimedia. For example, Sprint Nextel announced in 2006 that it would spend $3bn (£1.5bn) on building a US-based WiMax network operating at 2.5GHz, which would start roll out by the end of this year and provide services to at least 100 million people by the end of 2008.
Challenges facing the UK
But the situation may be somewhat different in the UK, where five cellular operators spent a vast £22.5bn on their 3G licences when they were auctioned in March 2000 to little immediate return. This means that they may be more reluctant to spend additional sums on a wireless equivalent unless the commercial gains are clear.
Rob Bamforth, a principal analyst at Quocirca, observes: "Incumbent mobile operators may look at mobile WiMax to extend their own footprint, but it could cause them problems in terms of positioning. If they simply regard the technology as another form of 4G, it could just become part of their natural evolution, but if they want to position it as something new and radical, it will present more of a challenge."
As a result, Bamforth thinks it more likely that telcos such as BT or Colt will look at mobile WiMax as a means of providing customers with mobile access "under their own steam without having to do deals with mobile operators", while new players such as Google may also try and get a slice of the action to obtain a fresh channel for providing content. "It will be intriguing to see who steps in. Mobile WiMax gives an opportunity for someone who's not a mobile operator now to move into this space, so it could prove interesting as we move to a more converged fixed and mobile world," he says.
If BT were to bite, Dean Bubley, principal analyst at Disruptive Analysis, believes that it would probably not make mobile WiMax a mass-market proposition. A more likely scenario for Bubley would be for the vendor to integrate the technology with IP PBXs to enable it to support voice, before packaging it up with other network and security technologies, and wrapping consultancy and support services around it to sell to enterprises.
However, Bubley is not convinced that there is a clear business case for mobile WiMax at present. "The obvious use case is to embed it in laptops, but this seems initially more appealing to consumers for things like games," he explains.
To make matters worse, Bubley does not expect a full UK roll-out of WiMax to happen overnight, not least because of the...
...high density of stations required to make the network operate effectively. As a result, any initial work would probably focus on provisioning suburban areas, airports and the like, although Bubley predicts that the chances of this taking place much before 2010 is "nearly zero".
Another challenge in terms of corporate adoption, meanwhile, is that WiMax tends not to work indoors as well as rival technologies such as Wi-Fi, because its radio waves are at higher frequency and so tend to be absorbed by walls, people and the like more easily.
"There may be a way of using pico and femtocells to reduce this, but this approach is probably more suitable for consumers. Enterprises would have to integrate the cells with their existing local area networks and network operators aren't likely to want an extra box at the end of their Lan," Bubley says.
Another issue that is likely to inhibit business uptake is that there is no uniform globally licensed spectrum for WiMax, whereas there is one for 3G networks. This means that roaming either now or in the future will be impossible, unless a workaround such as a (probably expensive) multi-mode device is found.
Such a scenario is already evidenced by the fact that, although UK operators may go for the 2.6GHz frequency band next year, the US has already opted for 2.5GHz today, and some countries in Asia such as Indian and Vietnam are expected to plump for 3.3GHz in the future.
Finding a market
Ian Fogg, a research director at Jupiter Research, is not convinced there is an obvious usage model for WiMax at the moment. Instead he believes that it is "essentially a technology looking for a market". WiMax, he says, has been pitched variously by vendors over the past few years as a rival to fixed broadband technologies such as cable and DSL, an alternative to Wi-Fi public hotspots, and a high-bandwidth backhaul for internet or cellular phone traffic from remote areas to an internet or T1/E1 data network backbone.
"Each of these markets has different rivals so it's quite hard to talk about a WiMax market as such. You can talk about markets for different types of applications and ways of meeting those needs — and one of those might be WiMax — but really it's just an alternative pipe," Fogg explains.
The worry for proponents, however, is that this alternative pipe is already several years behind rival offerings in terms of both maturity and adoption, which means that when and if it materialises, it will need to prove itself superior by various orders of magnitude in order to catch up.
Today, however, the technology is not yet available in any volume, most WiMax operators are currently niche and, while the technology is optimised for data rather than voice, much depends on how networks will eventually be built. In Fogg's view: "Until WiMax is offered in competition with 3G or 4G, you can't make performance comparisons because it's all very hypothetical. What you can say, however, is that it's coming to market late, it has poor economies of scale and it's available in some countries but not all. So it's going to be challenging for operators to compete with 3G or 4G and the best they can hope for is that they find a niche for it."
Into the medium-term, at least, WiMax may offer more potential usage cases for data-focused devices such as laptops and PDAs in the traditional Wi-Fi domain. Over time, Bubley perceives that the technology may increasingly be deployed in specialised terminals for outdoor workers, the emergency services or even in the vehicles of courier and parcel delivery companies such as DHL.
But Bamforth believes that it could be used even more widely. "I can see it emerging as a mechanism for connecting wireless laptops and other data devices at speeds that are higher than current Wi-Fi networks and over ranges that are more comparable with cellular," he says. "The advantages of WiMax are that it would mean less impact in terms of street furniture such as antennae and it could lead to the creation of not so much hotspots, as hot zones."
Nonetheless, unlike the claims being made three years ago, Bamforth thinks it unlikely that such services would be offered for free, as operators will need to make a return on their investment. He also believes that uptake will depend on the applications that are "running on the back of it", which will, in turn, dictate funding models.
"The average IT manager will use mobile WiMax alongside their 3G cards and it will creep in as a way to extend mobile networks for travelling users. Whether it will be used as a way to deliver wireless campuses is somewhat more unclear, but in the end this all boils down, not so much to the technology, but to commercial models, and it's still just too early to say how it will pan out," Bamforth concludes.