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WiMAX Business Case

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  • Mobile Cellular Networks 1-8
  • Wireless LAN 1-6
  • Broadband Wireless Access (BWA) 1-10
  • Why hasn’t BWA taken off? 1-22
  • Enter 802.16/WiMAX 1-24

Transcript

  • 1. GLG Institute Wednesday, January 10, 2007 The Penn Club, New York WiMAX – Making a Business Case _______________________________________ Pradeep Samudrai, Former Vice President, Samsung Telecommunications                                 
  • 2. Pradeep Samudra, now an independent consultant was most recently (10/06) a Vice President at Samsung Telecommunications. He has over 25 years of experience in the telecommunications industry. He is a holder of 4 recent patents and 6 pending applications in the area of IP/MPLS/ATM routing and is knowledgeable about the   business and technologies of CDMA/GSM/OFDMA/xDSL/VoIP/IPTV and FTTx technologies. He is also experienced in developing and marketing broadband and wireless network systems and products. Mr. Samudra has spoken at internationally recognized conferences on topics ranging from market and technology forecasts, planning and deployment and is a member of the Board of Directors for the prestigious industry standards alliance ATIS. Recently he managed nationwide VoIP deployment and an IPTV trial in the US. He is knowledgeable in the telecom vertical segment, key players, their strategies, and prospects for future agents of and in next-gen wireless technologies such as 3G/3G LTE/Super 3G and 4G, broadband access and core networks.                                 
  • 3.
    • Table of Contents
    • What is WiMAX?
    • Who can Benefit?
    • What are the Costs, Threats, and Issues?
  • 4. WiMAX – Making A Business Case Pradeep Samudra January 10, 2007
  • 5. Contents
    • WiMAX 1 Technology
    • Competition to WiMAX
    • Benefits of WiMAX
    • Costs Associated with WiMAX
    • Issues Unresolved
    • Crystal Ball
    1 W orldwide I nteroperability for M icrowave AX (ccess) (A trademark of the WiMAX Forum)
  • 6. Wireless Access Technologies 2. Wireless LANs (802.11) 1. Cellular (CDMA, GSM) 3. Broadband Wireless Access A Key to Success: Standards
    • Outdoor
    • Mobile
    • Medium data rates
    • Voice & Data
    • Successful Deployment
    • Enterprise/Hotspots
    • Fixed
    • High data rates
    • Data only
    • Successful Deployment
    • Outdoor
    • Fixed
    • High data rates
    • Mostly Data
    • Disappointing Deployment
    Technology
  • 7. Tech 1. Mobile Cellular Networks
    • Analog cellular technology such as AMPS
    • Service: Voice
    • Digital technologies; TDMA, CDMA
    • Services: Voice, Low-rate data, SMS
    • 2.5G: GPRS/EDGE, 3G: UMTS, CDMA2000
    • Services: Voice, High-speed data, MMS
    3.5 Generation (2005)
    • HSDPA & HSUPA & 1xEV-DO (Rev A)
    • Service: High-speed data
    1 st Generation (1980s) 2 nd Generation (1995) 2.5G/3G (2000) Data rates under 10 Mbps, not truly IP/packet based, inefficient due to backward compatibility requirements. Technology
  • 8. Tech 2. Wireless LANs
    • First version
    • Data rates of 2 Mbps
    • Widely deployed
    • Data rates up to 11 Mbps
    • Current Deployment
    • Data rates up to 54 Mbps
    • Next Gen Wireless LANs
    • Data rates over 100 Mbps
    802.11 (1997-98) 802.11a 802.11b (“Wi-Fi”) (2000) 802.11b/g (2004) 802.11n (2007) No support for mobility, limited coverage area & interference issues in unlicensed bands. Technology
  • 9. Tech 3. Broadband Wireless Access (BWA)
    • Typically deployed for fixed wireless access applications
      • An alternative to DSL
      • Emerging markets and rural areas
      • Suitable for cellular backhaul
    • Relatively new technologies
      • In existence since 2000
    • Commonly use non-cellular spectrum over 2 GHz
    • Plethora of technologies
      • Incompatible & proprietary technologies
    No support for mobility, mostly proprietary systems with lack of support from major vendors and service providers. Technology
  • 10. Why hasn’t BWA taken off? BWA Issues Economic Conditions Lack of support from major players Competing & Successful 2.5G/3G Deployment Lack of Mobility & Compelling Services Lack of business case Incompatible and proprietary technologies At least 40 different incompatible solutions on the market. Technology
  • 11. 802.16/WiMAX – Best of BWA 802.16/WiMAX Support for high data rates Open standards based network Support for Mobility & Next Generation services Support from major industry players
    • IEEE 802 Committee
    • Physical Layer
    • RF, Power, Modulation, Coding
    • Fixed and Mobile
    • MAC Layer
    • Framing, Security, Scheduling
    • Handover/Mobility
    • Standards
    • - 802.16 d and e (Ref interface R1)
    • WiMAX Forum
    • End-end Networking
    • - Reference architecture
    • Signaling, Network Mobility
    • Messaging
    • Standards
    • Ref interfaces R2-R8
    • Equipment Certification
    • Europe and Asia
    WiMAX is a Data Service Technology
  • 12. WiMAX Defined
    • Differentiated Wireless Access Technology which provides
      • high Data Rates , that are
      • allotted flexibly , with
      • built in QoS and Security , supported through
      • complex scheduling algorithms, at a
      • relatively lower cost .
    WiMAX uses O rthogonal F requency D ivision M ultiple A ccess (OFDMA) Technology
  • 13. Mobile Wireless Multiple Access Technologies Bold font = strength of the technology Technology Built in MAC NA NA 8 QoS & Security <15 Mbps > 400 Kbps 9.6-64 Kbps 6 Data rate Full Mobile, HD Streaming NA 7 Video Sprint, Clearwire Verizon, Sprint, Alltel AT&T, Cingular, Nextel 9 Examples Data Voice Voice 4 Optimized for 60 Kbps (VoIP) 4-8 Kbps 8-12 Kbps 5 Voice BW Varying in time and freq. Not applicable Fixed 3 BW Allocation 2.5-3.5-5 GHz; may also use Cellular and PCS Cellular and PCS (700/800, 1800/1900) Cellular and PCS (700/800, 1800/1900) 2 Spectrum (MHz except where noted) Varying frequency assignment per service OFDMA (802.16e/WiMAX) Dedicated Code per user Dedicated time slots per user 1 Technique (W)CDMA CDMA2000 TDMA GSM/GPRS
  • 14. NEW DEVICE NEW DEVICE NEW DEVICE NEW DEVICE Technology
  • 15. Competition to WiMAX
    • WiFi Mesh
      • Connect Wi-Fi islands with “backhauls”
      • Muni WiFi
    • 3G Cellular
      • Provide additional bandwidth for data centric applications
      • 3G LTE and emerging 4G
    • Fixed/Wireline
      • Cable, DSL, FTTP
    WiMAX must be able to differentiate itself. Competition
  • 16. Competitive Access Technologies (Q1 2007) * Typical of the several possible Bold font = strength of the technology Competition 15Mbps 15Mbps 15Mbps 8Mbps 1Mbps 15Mbps 4 Data rate* 2-5 KM 8 KM 1 KM 1 KM 2-5 KM 50 M 5 Distance VoIP VoIP VoIP POTS TDM VoIP 6 Voice Streaming, HD RF, HD RF, HD Streaming, HD Streaming Streaming 7 Video MAC/IP IP IP IP IP MAC/IP 8 Security MAC ATM, IP MAC ATM TDM/ ATM MAC 9 QoS Mobile Fixed Fixed Fixed Mobile Portable 10 Mobility Medium High Low Low Medium Low 11 Cost (incr) Flexible Fixed Fixed Semi-fixed Semi-fixed Fixed 3 BW Allocn Licensed Shared Shared Dedicated Licensed Unlicensed 2 Spectrum FDMA Cable OFDM xDSL Digital FTTP OFDMA T/F/CDMA OFDM/TDM 1 Technology 802.16e/ WiMAX Cellular 3G WLAN
  • 17. Benefits of WiMAX
    • Applications
      • Fixed/ portable wide area services
        • Residential/SOHO high speed Internet access
        • SME voice/Internet access
        • Public safety, private MAN networks
      • Mobile access services
        • Cellular voice and high speed data
      • Cellular and WLAN/Hot spot backhaul services
        • T1 bypass
    Considered a key differentiator Benefits
  • 18. High Data Rates Can Create New Business Opportunities WiMAX fits here! Benefits
  • 19. WiMAX Deployment Cost Considerations
    • Demographics/Topography
      • Urban/Suburban/Rural-Exurban, Mountainous, Arid, Trees/other obstructions
    • Regulatory, Spectrum, Licensing, Competition
    • Density/Coverage/Customer base/Capacity
    Cost Urban Suburban Rural
  • 20. Capex Components Source: The WiMAX Forum White Paper Laptop cards, handsets, PDAs
      • IMS Integration, handoff agreements
      • with voice nets, provisioning, configuring, Accounting/billing, Fault Isolation, Maintenance, Customer service
    Cost
  • 21. CPE Cost Curves
      • Likely to be at $500 when introduced
      • Need to be under $100 for mass adoption
      • Business model may be similar to cellular (give-away with contract lock-in)
    Source: The WiMAX Forum White Paper Cost
  • 22. Base Stations – Urban Source: The WiMAX Forum White Paper Cost TDD
  • 23. Urban Business Case Source: The WiMAX Forum White Paper Cost
  • 24. Emerging Markets’ Dynamics Source: The WiMAX Forum White Paper Cost
  • 25. Emerging Business Models Fixed Telcos & Cable Companies Mobile Operators CLECs, WISPs & Greenfield Operators Non-telecom Organizations DSL/Cable replacement in suburban/rural areas Enterprise data/voice services Portable/Mobile broadband services AT&T, BT, KT Separate network for data alone Next gen “hot zones” (extension of hot spots) Cellular backhaul SprintNextel, SKT Facilities-based broadband service Enterprise voice/data services Next gen “hot zones” (extension of hot spots) Cellular backhaul ClearWire, IrishBroadband Municipality/government initiatives (digital divide) Connectivity for remote locations (e.g., mining companies) M-Taiwan, N2015 (Singapore), City of Philadelphia Cost
  • 26. Issues
    • Universal Spectrum
      • 2.5 in US, 3.5 in 77 countries
      • Unlicensed vs licensed
      • RF cost is 40% of total
    • Technology Maturation
      • Large investment by large players
      • Technology evaluation is complex
      • IPR fees (“$0”)
    • Technology Competition
      • Spectrum moratorium
      • Co-operation (“CLEC” status)
    • Backhaul
      • Lack of suitable capacity & connectivity
    • End to end Network
      • OSS/BSS integration timeline
    • Data Applications
      • Ecosystem (OS, UI, eCommerce models)
    Issues
  • 27. Crystal Ball
    • Fixed WiMAX
      • Questionable future
    • Mobile WiMAX
      • Great future in high growth emerging markets
      • 3G/4G will prevail in advanced markets
    • Candidates for Mobile WiMAX
      • Operators lacking mobile service
      • Mobile operators lacking inexpensive backhaul
      • Operators owning spectrum licenses
    • Geographic favorites
      • US, South Korea for the near term (2006-9)
        • DSL, 3G provide stiff competition
      • BRIC for the mid term (2008-12)
        • Attractive price curves
    Forecast
  • 28. Critical Success Factors
    • Spectrum issues resolved
    • Harmonization with 3G LTE
    • Attractive price points
    • Application “pull” leading to competition
    Forecast
  • 29. Who is Interested in WiMAX? Source: Pyramid Research
  • 30. Who is Using WiMAX Today?
    • US
      • SprintNextel:Q4 WDC, Chicago
      • Clearwire
      • Vanu
      • Alltel
      • BellSouth (Fixed)
      • AT&T/SBC (Nevada – fixed)
      • 5GHz WISPs
    • Asia
      • Korea: SKT
      • Japan: KDD/NTT
      • China: 3G allocations, WiMAX allowance
      • India: Tech-neutral spectrum allocation (Tata – Aperto)
    • Europe
      • UK: BT
      • Germany: ClearWire, NextWave Broadcom, Deutsche Breitband Dienste
      • France
      • Spain
      • Italy
    • Latin America
      • Brazil: TVA (Samsung), Telephonica, Telmar, Brasil Telecom
      • Mexico: TelMex
      • Argentina: Entrach
      • Tech-neutral spectrum allocation
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  • 32. Gerson Lehrman Group Contacts Nick Goodman Vice President Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-750-1878 [email_address] Christine Ruane Senior Product Manager Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-984-8505 [email_address]
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