Who has Enough Spectrum to Deploy WiMAX Profitably?

Author: Adlane Fellah, CEO and founder

It is often said that spectrum is a “must have” asset for wireless operators who want to scale their service offering. The lower the frequency band, the better the propagation characteristics, with sub-1GHz sometimes referred to as “beach-front property”.

Having beach-front property is great, but having a large property is even nicer. Regardless of the frequency band, the amount of spectrum does matter. In our Clearspectrum™ database, we have accounted for more than 1,000 spectrum owners in the 700MHz, 2.5, 3.5GHz bands. This is obviously a large number compared to the 300+ 3G operators in the market. But the question is how many have sufficient spectrum to provide profitable fixed/portable/mobile broadband services? And consequently how much spectrum is needed to build a profitable and scalable network?

Spectrum characteristics

Our first step is to breakdown the operators from our BWA/WiMAX spectrum database by the amount of spectrum they own/lease. Exhibit 1 below shows the results of a sample of the top 200 BWA/WiMAX licensees worldwide that own at least 20MHz of spectrum and less than 50 MHz. A big proportion owns more than 50MHz, which is surprisingly high.

Exhibit 1: Operators Split by Spectrum Owned

Source: www.Clearspectrum.net

Those are of course global numbers that do not show the regional differences and particularities. The following provides the regional particularities:



Exhibit 2: Operators Split by Spectrum Owned by Region

Source: www.Clearspectrum.net

CALA is the region with the highest percentage of operators who own “fat” amounts of spectrum, which should help these operators deploy BWA and WiMAX services with more leverage than their Asian counterparts, such as the Indian operators who have the lowest amount of spectrum.

How much spectrum is enough?

Thus we have broken down the spectrum ownership by region. But how much spectrum is enough? There is probably not a single answer. Five and 10MHz are the most popular channels in the mobile WiMAX profiles, while 3.5MHz channels are characteristic of 802.16-2004 radios.

According to Kevin Suitor, VP Business Development at Redline Communications, “All deployment scenarios we’ve analyzed in the past indicate that 30MHz is the minimum required to provide decent residential broadband service, assuming that we are talking about providing continuous (ubiquitous) coverage in urban areas. This is based on a reuse of 1/3/3. Obviously in low subscriber density scenarios, 3 x 5MHz may work as well from a quality of service perspective, but the business case may not look so good (depending on ARPU).”

Haig Sarkissian from WiMAX 2020, a provider of business and financial planning tools for WiMAX, concurs. “The amount of spectrum needed depends highly on the amount of traffic that needs to be supported on a given cell site. This is a factor of the geographic coverage area of a cell, the number of users, the oversubscription rate, the types of applications used and their throughput requirements. The ideal amount of bandwidth needed depends on the traffic model on a regional basis.”

For rural deployments with low population densities, 15MHz of spectrum would usually be sufficient. For urban and suburban deployments with high population densities, 30MHz would be necessary. Based on the traffic generated on the network, it would be desirable to have 60MHz or even 90MHz available in order to be able to expand the network as traffic demands dictate the need for additional bandwidth.

Further, the minimum amount of spectrum can also depend on whether a given operator is expanding its offering to include mobile services.

“Assuming that the target is to achieve the same quality of service (in terms of achievable peak data rate), SNR requirements for mobile application will be higher. For example, just the difference between pedestrian scenarios and full mobile (60km/h) is around 2 – 3dB in required SNR. Consequently, a higher reuse factor may be required. There are other not so obvious reasons why additional capacity may be required in a mobile scenarios (for example, a certain amount of resources may need to be reserved for handoff and load balancing). However, at this point I don’t have a quantitative view on how this will impact spectrum requirements,” said Redline’s Kevin Suitor.

Is a lack of spectrum causing quality of service issues?

According to Redline, the lack of spectrum will dictate a need for “tighter” frequency reuse and hence lower quality of service. Segmentation can be used to mitigate this problem, but then the achievable per sector capacity will be reduced and this will obviously impact the overall business case. Haig from WiMAX 2020 added, “The lack of spectrum will start causing network capacity issues as the traffic in a network increases over time. Unfortunately, for those operators who do not have enough spectrum, the only way to mitigate these issues is by adding more base stations, which is an expensive proposition.

So what is the situation globally?

Exhibit 3 clearly shows that the more spectrum owned, the more likely an operator is to deploy commercially. For instance, 66% of those who own more than 50 MHz have deployed a commercial network, while a large proportion of those who own 20 MHz or less of spectrum are either doing nothing with it or are in a trial phase to test the robustness of the network under tight spectrum conditions.

Exhibit 3: Deployment Status by spectrum ownership

Source: www.wimaxcounts.com

It will be interesting to see how much additional spectrum is acquired by 3G operators to expand their services in the next two years.

I want to thank the WiMAXCounts™ team and in particular Cintia Garza for putting this unique hard data together.

 

By Adlane Fellah, CEO and founder

For more information you can contact the author. afellah@maravedis-bwa.com

Network Operator Consolidation – The Race is On!

Author: Jeff Orr, Senior Analyst - Consumer Electronics

Third generation (3G) mobile technologies are finally coming of age. Lead equipment vendors for both network infrastructure and 3G mobile devices are in place. The larger national and international carriers are circling regional 3G operators like hawks, assessing the field and identifying potential acquisition targets. New market entrants for the mobile broadband and fourth-generation (4G) services are establishing alliances to compete financially with veteran operators. A reduction in the total number of global network operators is underway. Does this optimization signal a general weakness in the service industry or a reflection of crossing into the next phase for mobile communications?

Aggregation is one method being used to thwart competitive pressures from regional operators infiltrating a local market or removing the possibility of takeover. Until recently, Brazil’s mobile operators have been dominated by regional leaders from Portugal and Spain (Telefonica’s Vivo), Italy (Telecom Italia’s TIM) and Mexico (America Movil’s Claro). Brazil's largest phone operator Tele Norte Leste Participacoes (“Oi”) announced a late April deal to buy control of smaller local rival Brasil Telecom Participacoes. The move is intended to keep mobile revenues inside Brazil by establishing a major local player. In another late April move, Freenet of Germany agreed to buy rival Debitel for EUR1.63 billion, forming the country's third-largest mobile-phone company and fending off a takeover from United Internet AG. The formation of a larger carrier entity limits the likelihood that a takeover will occur and keeps mobile service revenues in the local market.

Operators are using acquisitions and buyouts to grow their war chest in an effort to become national players in next-generation mobile networks. India’s Reliance Communications (RCom) acquired a 90% stake in UK-based eWave World, a provider of WiMAX services and spectrum license holder in several countries including China. The eWave World joint venture in China co-owns and operates 36,000 km of optic fiber across the top 30 cities in China. A nationwide Chinese broadband license has already been applied for by the JV. The telecom firm plans to invest about Rs 2,000 crore (USD500 million) over the next few years to build and acquire WiMAX networks in emerging markets. “4G WiMAX networks in 50 countries would enable us to offer services to over 75% of global population,” said Reliance Globalcom CEO Punit Garg, the global operations subsidiary of RCom. RCom’s venture capital arm also invested in French WiMAX silicon provider Sequans Communications late last year.

The trend towards fewer carriers in the emerging mobile Internet market is starting as well. After speculation about how mobile WiMAX services will emerge in the United States and capitulation on who will finance the endeavor, Sprint and Clearwire announced last week that they will merge efforts into a new iteration of the Clearwire brand. The new business accepted USD3.2 billion in investments from Google, Intel Capital, and a trio of cable operators – Bright House Networks, Comcast Corporation, and Time Warner Cable. The mega-merge occurs before the first mobile WiMAX revenues have ever been lifted from consumer pocketbooks.

Fewer operators mean fewer prospects for radio access network (RAN) equipment manufacturers. Motorola’s lengthy relationship and installed base with U.S. fixed wireless operator Clearwire could pay off in the long-term after sharing initial infrastructure deployment responsibility with Samsung for the Sprint XOHM mobile WiMAX service. Conversely, Nokia’s late entry into the Sprint build-out might relegate the vendor to device supplier in the new U.S. mobile operator. Nokia was named to provide infrastructure for multiple cities in the state of Texas with estimates of a 2008-2009 build. With Sprint’s change from network operator to lead JV partner, Nokia’s infrastructure partnership with Sprint is thrown into question.

The mobile communications industry is undergoing a transformation in preparation for next-generation mobile networks. Alliances, mergers and acquisitions shuffle the operator playing field; keeping the market guessing what hand will be dealt next. Our bet is that more of these exciting transactions will occur over the next 2-3 years.

 

By Jeff Orr, Senior Analyst - Consumer Electronics

For more information you can contact the author: jeff@maravedis-bwa.com

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tags: Maravedis|  WiMAX

When Free Isn’t Cheap Enough

EarthLink abandons its efforts to give its Philadelphia Municipal Wireless network back to the city.

There have been several reports this week about EarthLink deciding to abandon its efforts to give its Philadelphia Wi-Fi network to a non-profit or to the city---all for free. In fact, EarthLink apparently offered to give either the city or the non-profit some cash and additional Wi-Fi gear as well. And it was a pretty big gift with EarthLink's wireless network in Philadelphia having cost around $17 million dollars.

EarthLink has notified its approximately 6,000 Philadelphia customers that it will cease service on June 12, 2008. So what happened here? The LA Times reported that despite EarthLink's offer to give the city $1 million in cash to exit, the city apparently balked at assuming an estimated $3.6 million per year cost to operate the network.

So EarthLink is in the process of suing the city to terminate its contract and remove its radio equipment from the city and to cap its liability. For its part EarthLink said that its customer base, which had been expected to reach as many as 100,000, fell far short of its needs and that it was losing $200,000 per month maintaining the network.

Some feel that EarthLink rushed the negotiations in its haste to exit this unprofitable venture and that the city had complex issues it needed to address in order to evaluate the deal EarthLink offered.

In either case, it seems clear that the network cost more than expected, that there were some technical difficulties and last but certainly not least that the business plan was unsound. EarthLink had agreed to pay for the entire network, sell service at $21.95 per month (half that to low-income residents), and to pay the city rent for vertical assets. A classic build it and they will come scenario in my opinion. I think municipal wireless could work if the city was a primary anchor tenant. Building a network without a clear and nearly certain revenue stream to break even on costs is always dicey.

In my old Broadband ISP days that was a central tenant for us---to not put up a relay with a recurring cost unless we had customers lined up to break even on that. We were a very small company granted, but maybe small company thinking is not such a bad idea sometimes.

Tim Sanders

The Final Mile

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tags: Tim Sanders|  WiMAX

Canadian manufacturers debut 802.16-2004 wireless network system

Tranzeo and Vecima partner on end-to-end 3.5 GHz WiMAX equipment and network management.

Tranzeo Wireless Technologies Inc. and Vecima Networks Inc. have completed collaboration on an end-to-end 3.5GHz WiMAX system, based on the 802.16-2004 standard, featuring Vecima's base station technology combined with Tranzeo's customer premise equipment (CPE). The solution is being marketed by Vecima under the VistaMAX brand and is currently in volume production.

The Vecima VistaMAX OBR3500 3.5GHz WiMAX base station and Tranzeo-made 3.5GHz WiMAX subscriber units are interoperable and can be managed by Vecima's WiMAX Network Management System.

The VistaMAX solution is envisioned to support such applications as tiered residential Internet access, voice over IP, cellular backhaul and enterprise data access in the licensed 3.5GHz frequency band. One unique capability of the VistaMAX base station is to configure it as a point-to-point backhaul solution, where it can be used to connect the cell with other cells or main backbone interconnection points as well as create multiple point-to-point links to high data rate subscribers.

In February, Vecima announced it received orders for OEM radio modules calling for approximately $6.6 million in deliveries by the end of March, and an additional $10.1 million by June 30. The deals required Vecima to expand its manufacturing capacity to meet the growing demand.

Tranzeo announced separately today that it will be the exclusive supplier of wireless mesh network equipment to Mexico's leading homebuilder, Desarrolladora Homex. Tranzeo's mesh radios will be installed on more than 40 of Homex's construction sites across Mexico.

Neither firm has obtained the WiMAX Forum Certified mark for its 802.16-2004 products.


By Jeff Orr,

ORR Technology, LLC

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tags: Canada|  Jeff Orr|  WiMAX

DSL subscribers expected to contribute to global WiMAX growth

Juniper Research forecasts 47m 802.16e-2005 subscribers in 2013.

Juniper Research forecasts that up to 12 percent of the global DSL installed base will be substituted by IEEE 802.16e-2005 (802.16e) subscribers by 2013. The Far East will lead with over one-fifth of the 47m subscribers in 2013. The region by region analysis found that there is a significant opportunity now for WiMAX as a DSL substitute technology.

The majority of 802.16e trials and network contracts being announced will commence with fixed wireless broadband services. Mobile usage will develop after the initial demand for fixed and portable services, creating an additional benefit for subscribers. As a result of this phased approach to implementation, a migration from existing wired subscribers is expected to accompany the introduction of wireless service.

"WiMAX will be an attractive offer in areas where there are no wired networks, and in areas where the existing DSL speed is suboptimal," says Howard Wilcox of Juniper Research. "WiMAX will solve the broadband access problem for users located at the fringes of DSL coverage. This is in fact the case in a number of developed nations such as UK, USA, Ireland and Scandinavia, and WiMAX network operators are deploying networks to address this market need."

The opportunity for WiMAX in developing countries is quite different. A lack of basic telecommunications infrastructure is the motivation for alternative technologies, such as WiMAX, to provide first connectivity. Markets like India have low cell phone and PC penetration. Significant change in business model and perceived value by consumers is necessary to make an impact.

Juniper's report concludes that the top 3 geographic regions (Far East, North America and Western Europe) will represent over 60 percent of the USD20 billion global WiMAX service revenues by 2013.


By Jeff Orr

ORR Technology, LLC
 

Clearwire-Sprint Deal: Why the Who’s of Who’s are Investing in WiMAX

While the business world has been buzzing about the Microsoft-Yahoo talks, the big news for WiMAX fans is the Sprint and Clearwire deal. More details on the financial and commercial agreements are provided in this article.

Sprint and Intel both already had much invested in the success of WiMAX technology but the reasoning behind the cable companies and Google’s involvement is being questioned by some.

So why are these companies investing in WiMAX technology?

Comcast and Time Warner have been feeling the pressure from Verizon and AT&T who have been forcing their way into the television industry by providing video through your phone line. Verizon is attempting to lay fiber all the way to the home, or close to it. AT&T is laying fiber to the ‘node’ and relying on current wires to carry video signals to consumers’ homes. By helping the growth of WiMAX, Comcast and Time Warner would be funding an alternative wireless offering. Having a hand in mobile broadband technology could also help the cable companies compete in the ongoing battle for our living rooms. The triple play (phone, internet, and television) offering is no longer enough. CE, PC, console game, networking equipment, phone, and cable companies are trying to take over home media not only because of the huge potential to sell a complete ecosystem of products, services, and content but also for fear of being shut out.

Google is rumored to have been reluctant to enter the deal particularly because the WiMAX offered by Clearwire is currently just fixed wireless broadband. The company had to promise a future in building a mobile wireless solution for Time Warner, Comcast, and Google to put up the money. Obviously bringing broadband internet to mobile devices would mean more time spent on the internet and possibly more time spent on Google, Gmail, or YouTube. But mobile broadband also means more mobile devices which would, hopefully for Google, operate on the Android operating system that was launched by Google back in November 2007.

It will be interesting to see where this deal takes us.

Ari Zoldan

Launch 3 Communications

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tags: Ari Zoldan|  Clearwire|  Sprint|  WiMAX

Libya Telecom and Technology Awards Mobile WiMAX Contract to Alcatel-Lucent

Libya’s national ISP to launch commercial 802.16e-2005 network services this September.

Alcatel-Lucent announced that it has been awarded a contract by Libya Telecom and Technology (LTT), the national Internet Service Provider in Libya, to deploy the first commercial WIMAX network based on the 802.16e-2005 WiMAX standard in the Great Socialist People's Libyan Arab Jamahiriya. LTT plans to launch commercial network services this September.

The new network will support voice over IP (VoIP) and high-speed internet access, enabling the delivery of advanced broadband multimedia services, such as video streaming, through a variety of end-user devices including modems and WiMAX terminals. It will also accommodate stationary, nomadic and mobile applications and complement LTT's existing fixed-based broadband services.

"We want to provide our residential and business customers a wide range of beneficial, easy-to-use wireless broadband services," said Abdul Majeed Husain, Planning and Projects department Manager of LTT. "Alcatel-Lucent's WiMAX solution will enable us to better serve customers in major urban centers such as Tripoli."

Alcatel-Lucent will provide an end-to-end WiMAX infrastructure solution, including the radio access network, microwave backhaul and IP routers and will deploy around 120 sites during the first phase. Device and terminal vendor selections are at the discretion of LTT. Alcatel-Lucent has identified several partners in its Open WiMAX CPE (customer premise equipment) initiative capable of interoperating with the provider's infrastructure.

WiMAX is seen as a valuable tool for rapidly and cost-effectively increasing penetration of high-speed Internet access in economies such as Libya's. The North African country is home to an estimated 6.17 million citizens and covers a land mass of about 1.76 million km2. Libya has approximately 232,000 Internet users, according to a September 2007 ITU report.


By Jeff Orr

ORR Technology, LLC

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tags: Jeff Orr|  Libya|  WiMAX

It’s Official! Sprint and Clearwire Complete Major WiMAX Deal

With the help of several blue chip investors Sprint and Clearwire announce a planned nationwide WiMAX company.

Today we gain confirmation that blue chip investors Intel, Comcast Corporation, Time Warner Cable, Google and Bright House Networks have pledged $3.2 billion in the formation of the new company to be known as Clearwire. The combined company will be helmed by Ben Wolff as CEO with Barry West serving as President. Wireless industry veteran and Clearwire Chairman Craig McCaw will continue in that capacity. And this time ladies and gentlemen the deals are signed and there is real money on the table. This is big news for the industry without a doubt.

Trilogy Equity Partners has agreed to invest $ 10 million in Clearwire common stock. Sprint will control a 51 percent stake in the combined venture with existing Clearwire shareholders to receive somewhere around 27 percent ownership of the new firm. The new investors will control a 22 percent share of Clearwire. The company also announced a number of wholesale re-sale MVNO agreements amongst themselves. Sprint will be able to sell its 3G products across the platform and the other partners will be able to leverage it as well.

The deal will have to pass regulatory approval but it is based upon a $20 price for Clearwire stock.

Sprint on a conference call today announced that it alone had 28 billion MHz/POPs of position in the 2.5 GHz spectrum range and the combined company will have over 40 billion MHz/POPs, which it believes is the largest single spectrum position of any carrier in the industry.

The company's deployment target is to cover 120 to 140 million people by 2010.

One thing I find very interesting in this deal is the potential for further alliances amongst these players. It is important to remember that Comcast Corporation for example already owns a significant spectrum footprint in the AWS spectrum range at 1.7/2.1 GHz range. This range currently has no WiMAX profile or appreciable traction in the band. One wonders if there is a potential for Comcast to leverage this spectrum into the deal at a later date. Also Google and AOL have been in talks to collaborate and certainly this could potentially leverage the AOL brand to resurgence on a new leading edge broadband network.


Tim Sanders

The Final Mile

 

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tags: Clearwire|  Sprint|  Tim Sanders|  WiMAX

A Sprint Clearwire Deal is Rumored to be Very Close

Early reports indicate that Sprint and Clearwire could announce a WiMAX deal as early as Wednesday of this week.

I had read reports that the deal was struggling over who would control the company. And I assumed it was between Sprint and Clearwire in terms of control, but it appears from a report in Fortune's Techland section that Google may have been the holdup. It appears that, for whatever reason, Google has struggled to decide whether to lend its name to the deal backing out and then recently coming back in. For their part the carriers would certainly want to enjoy the coattails of Google's name attached to the project.

Is this a big deal? Heck yeah it is---if it gets done. So what are the details? Well, at this point we don't have much. But it appears the deal would include Comcast and Tim Warner Cable as well as Intel (for funding) and Google (also for funding and name recognition).

I think the Google component is really large even though for it choosing a platform and participation in a wireless venture could close some doors for them with other carriers as they would effectively become a de-factor competitor. Still, Google's market value is super strong even in this economy and I would look for that to not significantly affect their deal making abilities with other carriers. After all we are talking about (one supposes) only an investment position here.

Will this happen? Who knows at this point, but some answers might be forthcoming tomorrow.

Tim Sanders

The Final Mile

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tags: Clearwire|  Sprint|  Tim Sanders|  WiMAX

Northern Italy and Island of Fiji to Receive WiMAX Networks

US$12 million order for 802.16-2004 base stations propels Newport Digital Technologies and Gil Technologies into new markets.

Taiwan's Institute for Information Industry (III) and Newport Digital Technologies (NDT) announced that it is deploying a WiMAX network in Northern Italy and in Fiji. The first $1 million of the $12 million order of WiMAX IEEE 802.16-2004 base stations started shipping immediately with the balance to be delivered over the next 11 calendar months.

III is consulting on the transaction for the base station and will utilize its contributions to 802.16-2004/e-2005/j/m to assist in the capacity as System Integrator and technology contributor for NDT and Gil Technologies, the Taiwan Base Station hardware manufacturer.

The Republic of the Fiji Islands occupies about 18,274 square kilometers, or approximately the size of the State of New Jersey. The islands are home to a population of 918,675. Fiji had approximately 80,000 Internet users of which 7,000 were broadband subscribers, according to a September 2007 ITU report.

"The support we have and will continue to receive from III is instrumental in securing large deployment contracts as a result of III's expertise in 802.16d/e/j/m," said Vincent Chen, Vice President of Gil Technologies.

"We shipped out the first of three shipments that will go out this quarter which will represent close to $3 million in sales for us of WiMAX base stations this quarter," said Mr. Richard Damian of Newport Digital Technologies.


By Jeff Orr

ORR Technology, LLC
 
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tags: Fiji|  Italy|  Jeff Orr|  WiMAX