Fixed broadband to the home (BTTH) is a well established market and wireless networks are increasingly providing a way to extend access to wider sections of the population more cost effectively. At the same time, Mobile WiMAX is positioned to take advantage of the pending convergence of broadband access and mobility, yet is just at the beginning of its growth curve.

 

As such, there will be a first wave of Mobile WiMAX (News - Alert) deployments that will be heavily focused on BTTH, where operators can scale up their roll outs in line with market demand, thus lowering costs and risks, and achieving rapid ROI. Based on consumer demand, they will also be able to extend the system to support wide area mobility, using the same basic infrastructure investment.

 

The growth of broadband access has been one of the most important telecoms phenomena in the past five years and the vast bulk of revenue and growth is concentrated in the residential sector. As a result, BTTH will likely remain the primary driver for the build-out of new or expanded services through 2010.

 

While BTTH clearly remains a major trend in most economies, a few factors are slowing growth — according to Rethink Research, growth in broadband penetration has slowed from 13 percent per quarter at the end of 2004 to approximately 7 percent now. The firm attributes this decline to the difficulty and cost of building out and maintaining wireline broadband in underserved areas at a time where there is increasing pressure on ARPU. Therefore service providers are looking for infrastructure and services that will be more flexible and will reduce capex and opex.

 

Many of these new approaches are enabled by delivering BTTH wirelessly (rather than over DSL, cable or fiber) to reduce costs and offer new advantages to the user, such as flexible tariffs, portability and convergence. Wireless supports better economics than wireline, especially in areas with little existing infrastructure, and the ability to deliver a wider range of services, including multimedia, at low cost per Mbps.

 

Wireless broadband has traditionally been deployed in emerging economies where wireline infrastructure is very limited and so business models were mainly focused on businesses, high income hotspots and community activity. The lower costs and better spectral efficiency of Mobile WiMAX, coming at a time when broadband is seen as a major contributor to economic growth, makes it more viable to expand home and personal access to a larger section of the population, even in the less developed areas in India, Pakistan, South-East Asia, Latin America and parts of Africa.

 

Other factors driving the growth of wireless broadband include limited expected competition from 3G before 2012, a global focus on developing low cost user devices, and pressure on regulators to open up cheap spectrum. For carriers, there is also the promise of targeting populations that will enjoy rapid income growth over the coming decade. In the rural areas of developed countries there is also demand for fixed wireless to fill in gaps in DSL and cable, as well as a rising interest in adding portability and mobility to fixed broadband models as carriers move to converged networks with fixed and mobile components.

 

The progressive evolution of end-users’ demand from fixed broadband to mobile broadband will require a technology that can meet today’s and tomorrow’s business requirements — and service providers cannot afford to invest in technologies that will not offer the flexibility to handle these changes. The emergence of the Mobile WiMAX standard (also known as 802.16e) offers such a technological path by delivering true broadband data rates (1+Mbps) to a fixed or portable device at a cost that ensures a good ROI.

 

In order to deliver powerful and cost effective BTTH, there are ten essential network criteria to keep in mind:

 

Mobile WiMAX covers more of these network criteria than other broadband options. In fact, there are several key reasons why Mobile WiMAX can address the shortcomings of all the previous wireless BTTH technologies. First, it is based on OFDMA, the key physical layer network technology for next generation wireless, which increases spectral efficiency. It therefore reduces cost per Mbps and is more viable in sparsely populated areas. OFDMA also promises superior multipath and interference immunity; predictable throughput throughout the non-line-of-sight cell, across the coverage area and with full cell loading (no cell breathing); high spectral efficiency and high revenue earning bits per radio channel; and high throughput in harsh channel conditions.

 

In addition, new antenna and signal processing technologies — such as AAS (Adaptive Antenna System) and MIMO (Multiple In Multiple Out) — improve range, reliability and data rate. Mobile WiMAX is also the first major platform to boast a flat and highly simplified network architecture, using data centric all-IP to deliver lower cost per Mbps. Furthermore, unlike earlier BWA platforms, Mobile WiMAX is standards-based, so the equipment will benefit from volume economics and market competition.

 

One of the most important characteristics of Mobile WiMAX is that it can be scaled up gradually, and can be adjusted to changing business models without major infrastructure overhaul. According to a July 2007 Rethink Research survey of more than 300 service providers trialing, deploying or evaluating WiMAX, the majority firms are implementing WiMAX initially for fixed or nomadic use. In addition, while very early WiMAX adopters were heavily enterprise-focused, the survey revealed there is now a rapid shift toward a model that addresses the residential base.

 

Interestingly, the Rethink survey also revealed that while many providers are interested in WiMAX’s mobile capabilities, this aspect of the technology is only seen as being critical to the second stage of roll-out. The 3G experience highlighted the key problems with the mobile-only business model — namely, massive upfront costs, expensive 3G devices and high customer acquisition costs.

 

Mobile WiMAX technology offers the competitive advantage of a new architecture that accommodates fixed and mobile designs and, as a consequence, offers a better path for fixed-to-mobile convergence. By implementing Mobile WiMAX, operators can adjust their business model by determining the fixed, nomadic and mobile services they want to offer, then adjusting the balance as market requirements change and the network grows.

 

Mobile WiMAX’s support for fixed and mobile operations is also a key advantage for service providers. Mobile WiMAX can be deployed to support multiple business model variations — fixed, nomadic, portable, simple mobile and full mobile — which can be adjusted relatively dynamically to the market’s needs. Once certification is under way, Mobile WiMAX promises to deliver low cost CPE in a very short time and that both business and residential service delivery will be very viable.

 

Given all these factors, it is perhaps no surprise to see the dominance of fixed BTTH in operators’ WiMAX plans through 2010. According to Rethink Research’s survey, networks that are designed to support mobility from day one will account for less than 10 percent of capex until 2009, despite the higher capex rate of a mobile system. In 2007 and 2008, the bulk of spending is likely to focus on networks that are designed to support primarily fixed residential users. Systems geared to mobility, or fixed/mobile convergence, are predicted to be the largest part of WiMAX capex beginning in 2011, when mobile CPEs will have been introduced to the market, achieved volume and after various other obstacles in the way of true mobile broadband — such as limited user interfaces — will have been overcome.

 

To this end, the first wave of investment is expected to focus on residential data as the driving application for service providers’ WiMAX networks, with VoIP becoming increasingly important; video and mobility will surface in the second stage. For early adopters, there will likely be a significant reliance on conventional fixed data services, but by 2011 these adopters are expected to have branched out into triple or quad play offerings in many cases, while later entrants will have joined the market, with a sharper focus on VoIP and portability/mobility.

 

The WiMAX industry is rising to meet service providers’ challenges as best it can. However, concerns remain among BTTH providers that many of the Tier 1 vendors are overly focused on the medium term rewards of full mobility, and are essentially sidelining others in their race to develop handsets and vehicular mobility. As such, BTTH-focused operators are looking for WiMAX vendors that understand their needs for a gradual WiMAX implementation starting from a BTTH model and migrating to a full mobility model in a few years. Vendors who can respond to this immediate need of the BTTH market will be best positioned to meet the requirements of service providers who are likely to be the Mobile WiMAX early adopters.