Is WiMAX the Future of the Wireless Industry?
With Wi-Fi hotspots on every corner and Internet-ready cell phones in every pocket, it’s hard to believe there’s room for a new type of wireless service on the market. Yet, the promise of worldwide interoperability for microwave access (WiMAX) for higher performance, lower costs and broader service has many experts wondering if it could be the next big thing.
WiMAX serves as an alternative to DSL and cable Internet services. It’s particularly popular in remote regions, where installation costs have kept telecom companies from laying lines. Many municipalities have adopted WiMAX, as well, offering it as a cheap Internet option for their residents, as the absence of cabling keeps maintenance costs low.
Despite its benefits, though, most consumers have chosen to stay with their traditional service provider.
The future of WiMAX, however, lies in its mobile capabilities, said Jim Geier, principal consultant for Wireless-Nets, a wireless network consulting firm.
At the end of 2007, Sprint plans to become the first company to offer mobile WiMAX to its customers, at which point consumers will get to put the new technology to the test.
Convenience and cost are expected to be the main benefits of mobile WiMAX, which will allow users to access the Internet using the same interface and service provider at home, work and wherever they travel.
This most likely will reduce the costs people pay for their cellular, Internet and Wi-Fi access and eliminate the hassle of having to find a hotspot and buy a coffee to get online.
All the convenience in the world, however, won’t pull WiMAX into the mainstream unless other large telecom companies get on board, Geier said.
“The problem for mobile WiMAX is that Sprint right now is the only telecom that’s likely to be offering that — AT&T and T-Mobile haven’t decided to do that,” Geier said. “So, it’s going to be pretty much a single carrier solution.”
One of the main obstacles blocking the widespread implementation of WiMAX is the cost of acquiring a decent-sized chunk of the frequency spectrum. Getting approval from the Federal Communications Commission (FCC) and buying available frequency space can cost millions, or even billions, of dollars, Geier said.
“Only companies like Sprint that have huge, deep pockets can invest in widespread WiMAX systems because they’re going to have to purchase the spectrum,” he said. “There are some public bands that are available for WiMAX, and anyone can build in those bands, but there’s a lot potential interference from different users, and that can limit growth in that band.”
Because of the high start-up costs for quality service, it’s risky for businesses to adopt a mobile WiMAX platform without a high level of consumer demand. Although the long-term costs are lower, and the potential performance is much higher (gigabit WiMAX is expected to blow the doors off of both cable and DSL when it is released in two years) it’s unclear whether that demand will grow.
The success of the Sprint experiment and the response of other telecoms most likely will determine WiMAX’s future, Geier said.
“Mobile WiMAX will give you a lot faster performance than what your current cellular system can provide,” he said. “As performance goes up, new applications can become much richer and more valuable to us. But, again, it all depends on whether other telecoms buy into it, and at this point, it’s hard to tell if they’re going to. If they did, I would say three to four years from now, mobile WiMAX is going to be it.”