WiMax is the Future of Telecommunications
Today we live in a world where communications have evolved into a landscape a
person from 1990 would scarcely recognize. Just 16 years ago cell phones were
only owned by the wealthy and were large enough to act as an anchor for a small
boat. Pagers were what most people used for mobile communications and they were
even quite few in number comparatively speaking. Many people today think it was
the improvements in cell phone design that dropped rates and the cost of
cellular phones to the point where today even most suburban teenagers carry cell
phones when just 10 years ago many middle income adults considered them a
luxury. The fact is though those who think it was the phones themselves that
drove the market have it backwards. It was the wireless infrastructure that
drove the market to its' current state not the devices using it.
To understand this better we need to look to New York City about 100 years
ago before the modern subway was introduced there. At the time a few surface
trains serviced the NYC area and many people opposed the massive investment in a
subway system. You see in the early 1900s New York City was nothing like it is
today, while one of the biggest cities in the US at the time that was not an
enormous claim. Much of Manhattan was still vacant swampland along with many of
the surrounding areas on Long Island, Brooklyn, etc. The early proponents of the
system understood that if you built the infrastructure to allow people to travel
swiftly throughout the city that with the ports and current businesses in the
area the city would become a massive financial powerhouse. They were right, as
the infrastructure came into being the city grew to what we today know as New
York City with its massive impact on the global economy.
The cellular market took a similar path though it was less obvious
because you don't see the cellular signals traveling though the air. Yet in the
beginning cell coverage was spotty at best because there was not much of an
infrastructure so even many who could afford one saw little value in having a
cell phone. As the network improved because carriers started to erect cellular
towers all over the nation people began to buy and use more cellular products.
Then the economy of scale gained traction and as the volume of users increased
the cost per phone and for service began a drop that has continued all the way
up to our present day. Make no mistake though the infrastructure drove the
market and caused all the associated reactions. Just as the subway was the fuel
that grew NYC to 8 Million people who live and or work there, the cellular
towers drove the market to an current estimated 779 Million Cell Phones that are
sold each year.
Now there is a new technology emerging that will change the way we use
technologies like Internet access, voip,
local phone service and other communications methods that are not even in
existence today. This technology is called WiMax and it is going to have a far
bigger impact long term then we have seen from cellular phones in the past 15
years. Sound ambitious? It may indeed be but history has shown when the highway
is built the traffic will follow.
First let's answer a seemingly simple question, "what is WiMax"? The simplest
definition is that WiMax is a way to transmit very high bandwidth connections
across distances of over 30 miles. Think of it sort of like wireless DSL with a
30-mile range. That is a very simplified definition but it is sufficient to
begin to understand how WiMax will impact the entire world over the next ten
years. You see unlike that DSL connection that only goes to your house in time
devices will be able to access WiMax networks just like Cell Phones access
Cellular Networks today. This will mean a customer can have a high speed data
connection anywhere they go (at least in areas that have coverage) to do
anything from browse the web to making phone calls to downloading music and
looking up information.
Some would look at this and shrug noting that similar things can be
done today with existing cell phones but the issue is the speed and capacity of
the connection. In the future with mobile WiMax you will be able to download not
a video clip but full-length movies and television shows onto a device that will
be similar to today's cell phones. Unlike the phones of today though these
devices will have hard drive capacities that will make today's 60 Gig IPods
green with tech envy. They will be able to link with tomorrow's television sets
and become the communications choice for the majority of data, voice and video
applications. Imagine a phone that provides Internet access to your laptop,
beams movies to your TV and gives you unlimited calling all for about what you
pay for cellular service today.
A projected path way will appear something like the following
- Initial Rollouts (in progress) will begin fueled mostly by competitive
local phone service carriers and rural Internet service providers along with
larger carriers who will use fixed WiMax to deliver services to residential
customers many of whom are in underserved markets.
- Adoption in these markets will be high because it will be the first
viable option for high-speed data access for many customers in these markets.
- These deployments will generate capital to be reinvested for future
deployments, which will create the initial scale of product demand. This will
begin driving both the cost of carrier and customer equipment down.
- As the economy of scale makes deployment less expensive mobile
platforms will begin to appear. This development will be spread between high
population centers and the rural markets that already have fixed platforms
deployed which will act as a springboard for mobile deployment.
- Interconnections will begin to form between rural markets and
metropolitan markets as carriers form cooperative agreements to share network
resources. The economy of scale will increase exponentially at this point and we
will notice a marked negative impact on traditional cellular, Internet and voice
- Once the initial hot underserved rural markets and high-density metro
areas are complete springboard deployments will quickly take WiMax coverage to
the level of coverage offered by traditional wireless today.
My personal view is this process will move much faster then the deployment of
cellular networks and devices for a few very key reasons.
- The manufacturing process for WiMax Devices will be quite similar to
that of Wireless Devices mostly the changes will be in components and software.
In 1989 no facilities existed with the capacity to produce 1,000,000 cellular
handsets even if the demand was there. Today the capacity of production is
sufficient to produce about 800 million devices. For these facilities to begin
turning out WiMax devices will be much easier then the ramp up needed for
current cell phone production.
- The concept of mobile communications and Internet access were foreign in
1989 to most people. The wireless providers had to develop a platform, a product
set and the infrastructure to drive it. Then at the same time they also had to
develop the market to a point where people were aware of, wanted and saw a need
for their product. Today the market is in place and waiting on the technology
and that difference alone should not be underestimated.
- As carriers built out wireless networks they had to learn as they
built to a large degree. Think about building a network like this prior to any
existing and the questions that came with it. Where do we locate the towers and
how to we get permits to build them? What type of environmental interference
exists? Where do we accept "dead zones" and where do we prioritize compensating
for them? The list could be a mile long and today most of those questions have
been answered and can now be applied to the development of a mirror network that
provides WiMax access.
Look for both Fixed and Mobile WiMax deployments to become the next major
growth cycle in the technology industry. Most of the other hot technologies,
Video Over Internet, Voice Over Internet and others require high-speed access.
In the next ten years those who control the WiMax highways will become the next
giants of our industry.