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WiMax is the Future of Telecommunications

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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 services.

- 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.

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Jack Spirko has 15 years of experience in the technology and telecommunications industry. He runs multiple websites including Broadband Phone Services which provides consumer advice and tracks changes and trends in the telecommunications and ip telephone industry.

WiMax is the Future of Telecommunications
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