When telco incumbents with extensive fixed and mobile data networks start touting rival technologies you know something’s wrong. This is especially the case when it’s a technology that has been on trial for a long time and the incumbents have not invested in it themselves.
I am, of course, talking about WiMAX, the wireless standard that’s been hyped for the last three years as a last-mile data delivery alternative by large vendors such as Intel and Alcatel. Telecom’s chief executive, Theresa Gattung, has also listed WiMAX as a competitive threat — just like she did with Woosh during earlier regulatory talk fests.
Woosh didn’t turn out to be a competitive threat for Telecom and it looks like WiMAX could meet with the same fate unless the government steps in fast to change the regulatory landscape.
The WiMAX standard by itself is far from technically deficient. On the contrary, if the NatCom WiMAX service I’ve trialled is anything to go by, providers could build fast and reliable broadband wireless access (BWA) networks to compete with fixed infrastructure from established players.
For this to happen however, providers need to have better access to the currently underused licensed radio frequency spectrums in New Zealand.
While the WiMAX standard lays out a variety of frequency bands that can be used — as high as 99GHz - the practical ranges are at far lower frequencies. Lower frequencies have advantages like greater reach, better penetration, non- or near line of sight deployment and requiring fewer access points for coverage.
The problem is that much of this spectrum is in the hands of telcos and operators who are “squatting” so to speak, without using the frequencies for anything. There is actually plenty of room in the New Zealand ether for data networks. A discussion paper released by the Ministry of Economic Development points to little usage of the frequency bands that work well with WiMAX, such 2.1-2.3 and 3.5GHz. This is a waste of limited resources, and the paper suggests that unused spectrum rights are rescinded and reallocated.
Allocating more spectrum isn’t going to be enough, however. The configuration of the 3.5GHz and lower frequency bands isn’t appropriate for WiMAX. Many bands are currently sliced up into 7MHz pairs, one for downstream provision and one for upstream. That’s a total of 14MHz which, without going into too much deep geek detail, just isn’t enough bandwidth to keep up with customers’ ever-increasing demands — not even with fancy modulation wringing out the last bit of performance from the allocation.
To make WiMAX succed and ensure scalability, the Government would need to reconfigure bands into, say, 21MHz pairs instead. Currently, providers can aggregate spectrum in the 3.5GHz band through commercial arrangements with one another but the likelihood of bitter competitors doing that is small.
These sorts of regulatory issues were pointed out by the OECD recently as a major hindrance to the success of WiMAX. Even if the Government here creates fatter frequency bands, it would need to happen in the larger overseas markets, too, where similar “spectrum squatting” is rife. Without large-scale deployments in big overseas markets like the US, OEMs won’t get the economies of scale needed to produce affordable customer premises equipment and access points. Without cheap gear, there is no future for WiMAX in New Zealand either.
As telcos are gearing up to provide the next round of high-speed cellular 3G technologies, you have to ask where this leaves providers betting on WiMAX.
Considering that the spectrum changes aren’t likely to take effect until 2010, it looks like they are heading into a commercial cul-de-sac because of slow regulation that has failed to keep up with technology.