In November and December last year I wrote some blogs on this site about WiMAX. Unfortunately no one was listening because the Government has awarded Optus over $900m of taxpayers’ money for a rural solution called “Broadband Connect” which involves WiMAX.
The Government’s “fact sheet” (www.minister.dcita.gov.au) on the topic of WiMAX makes the following extraordinary statement in relation to WiMAX: “This performance means that consumers will experience the same speed and quality of services on WiMAX as they would on wired services such as Cable and DSL.”
Anyone who thinks that WiMAX is a satisfactory replacement for a fixed wire in delivering broadband services to Australian homes is sadly deluded. WiMAX suffers a number of disadvantages that are inherent in radio-based services. For a start, the advertised peak speeds (such as 6Mbps) are subject to the random variations that are endemic in radio systems. The number of customers who will actually achieve these speeds in the coverage area can be relatively low. By contrast when a fixed line is advertised as offering 6Mbps, all customers within the nominated coverage area will achieve those speeds.
Furthermore, radio is a shared medium, so all users in the same area need to share that 6Mbps (or whatever happens to be available where you are). So if you all want to watch a TV program which runs at, say, 1.5Mbps, then no more than 4 homes out of the hundreds of possible homes in the area covered by the WiMAX cell will enjoy the service at the same time. WiMAX may deliver high speed internet services today but it will struggle to deliver the rich media (audio, video as well as web pages) that are literally coming down the pipe and will grow strongly over the next few years.
In addition, as radio networks go, WiMAX is not the best choice. There are 2 WiMAX standards which are incompatible with each other. You have a choice between ‘fixed WiMAX’ which has been around for a couple years with little uptake. It is effectively an orphan technology because the industry is moving to a newer standard for ‘mobile WiMAX’. Unfortunately this technology is completely unproven because no one has actually deployed a commercial service with this standard yet. By contrast, the technologies on which Telstra’s Next GTM network are based, 3G with HSPA (which we chose after detailed research), have more than 100 networks in service worldwide, some of which have been around for a couple of years. More importantly, most market forecasts show that globally there will be about 200m 3G users in 2010/20011 compared to about 10m WiMAX users. The scale economies are critical in supporting low cost handsets and home units.
There’s more. The WiMAX solution proposed by Optus is intended for rural services. That is a little unfortunate because they will need to build at least 4 times more base stations (and hence roughly 4 times the cost) for the same coverage you would get from the Next GTM network. I wonder if the taxpayers of Australia are happy to be spending their dollars on an inefficient, unproven technology.
Finally, just to emphasise, a radio network does not provide the same broadband capability as a fixed network. But, if you need to deploy radio technology, and there are some places for which this is necessary, you are far better off using the same radio infrastructure that you are already using for mobile services. That way you optimise the investment across all revenue sources. That is why Telstra will use its Next GTM network to provide fixed wireless services (with speeds that are just as good, or better than, WiMAX). In addition, unlike WiMAX, the Next GTM network comes with the voice and video telephony capability built in which again improves the economic efficiency.
In summary, a rational person would need to ask why you would deploy a wireless solution when a wired network is available and where you do need to deploy a radio network, why would you deploy an inefficient, unproven one?
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