WiMAX will likely never become a mainstream broadband platform, but it could have a bright future in rural areas.
WiMAX technology was once positioned as the Next Big Thing not just in wireless connectivity, but in broadband access overall. Theoretically, the technology was more efficient than other options, so the thinking was it would eventually usurp cable modems, DSL, and 4G cellular services. While that prediction has not come to pass, the wireless technology is nevertheless gaining traction in select niches and may help small and medium businesses with specific requirements.
Going Up The Country?
WiMAX's future may be foreshadowed in a recent href="http://www.alvarion.com/presscenter/pressreleases/185114/" target="new">announcement by Alvarion, a WiMAX equipment vendor, and Open Range Communications, a rural telco service provider. In the next five years, Open Range plans to spend $100 million on Alvarion's BreezeMAX WiMAX equipment. Once the project is complete, Open Range will offer 6 million rural American users wireless Internet access via its Simply Easier service.
WiMAX is an appealing technology for service providers such as Open Range for a couple of reasons. Because it is wireless, WiMAX does not require the cabling associated with other broadband technologies, such as cable modems and DSL networks. And unlike other wireless technologies such as Wi-Fi, WiMAX was designed from the ground up for use in Wide Area Network (WAN) applications. Consequently, it has a far greater transmission range (more than 30 miles in some cases) than alternatives, such as Wi-Fi, which typically has a maximum range of about 1,000 feet. Consequently, service providers should be able to deploy WiMAX networks at a lower cost than alternatives.
Sprint Stumbles
Because of these potential benefits, many observers expected WiMAX to become a mainstream broadband access option, yet to date, it has garnered only minuscule acceptance. Sprint has been the only major U.S. carrier to jump on the WiMAX bandwagon. At one time the carrier positioned WiMAX as the linchpin of its 4G service plans, but deployment has fallen woefully behind schedule. Initially, the company planned a commercial launch of WiMAX services in April of 2008, with plans to expand coverage to 100 million individuals by the end of 2008.
As it was on the road to widespread WiMAX deployments, Sprint ran into unexpected -- and largely unrelated -- financial and managerial problems. Eventually, the carrier handed over its WiMAX roll out to start up Clearwire Communications. Clearwire recently brought WiMAX services to Atlanta, which joined Baltimore and Portland, Ore. as WiMAX service beds. Las Vegas, Chicago, Philadelphia, and Dallas/Fort Worth are next on the WiMAX rollout list.
Late To The Party?
One reason why WiMAX has been slow to take hold is that other broadband options have had such significant head starts. Lured by relatively low prices and easy-to-deploy services, most businesses and consumers have already taken the broadband plunge. Estimates are that there are about 75 million broadband users in the United States.
One fallout is that the potential savings that carriers hoped to realize from using WiMAX may no longer be possible. While WiMAX equipment may be more efficient than other options in large-scale deployments, its rollout cost can be more than other services because you have to build the entire network no matter how many subscribers you have.
And because the volume of WiMAX devices being sold is still so low, vendors need to charge more for their WiMAX access points and switches than for other broadband devices. Wired networks, meanwhile, can grow in stages, which lowers capital requirements.
Also, carriers need to put a new network infrastructure in place -- complete with management and support systems. Cable companies and telcos have already deployed such products for the other options.
The bottom line? WiMAX is not going to replace other well-established broadband services.
Not Dead Yet
But that doesn't mean WiMAX will have no role to play. Rather than a widely deployed technology, WiMAX may find a home as a niche solution. Rural service providers, such as Open Range, have had difficulty putting the infrastructure in place to deliver broadband services to their customers. In many cases, the cost of cable modem, DSL, or 4G networks has been too high to warrant their use in sparsely populated locations. Consequently, satellite communications or dial up access have been the only options in these isolated areas. Now, WiMAX may be emerging as a third alternative, as evidenced by the Open Range announcement.
For small businesses, the market evolution provides needed clarity. While companies like Clearwire may attract select customers, WiMAX service providers will be hard pressed to take much business away from entrenched competitors in metropolitan areas.
Consequently, their long term future is shaky, and small and medium businesses may want to avoid committing to them until they can demonstrate long-term viability. However, if your company has offices, warehouses, manufacturing facilities -- or even customers -- in rural areas, WiMAX may be a good way to obtain needed broadband services in those locations.
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See more columns by Paul Korzeniowski.
Paul Korzeniowski is a Sudbury, Mass.-based freelance writer who has been writing about networking issues for two decades. His work has appeared in Business 2.0, Entrepreneur, Investor's Business Daily, Newsweek, and InformationWeek.
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