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Will WiMAX Replace DSL?

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There has been a lot of hype about WiMAX as the next generation technology that will wipe out wired internet connectivity.

Will WiMAX Replace DSL?

     

Introduction

There has been a lot of hype about WiMAX as the next generation technology that will wipe out wired internet connectivity. The contention is that, it is far easier and more cost effective to set up transmission towers than continuously extend the cables for last mile connectivity. However there are a good number of people who are more conservative in their evaluation. The skeptics question the commercial viability of the new technology and cite earlier instances of wireless internet technologies failing to make it at the market.

The Facts about WiMAX

WiMAX is the acronym for Worldwide Interoperability for Microwave Access.It is a set ofstandards that enables high speed wireless internet access possible over relatively large areas (up to 50 km radius from the source). WiMAX can provide up to 1Mbps downstream capacity.

Attempts have been going on since 1999 to develop technologies that offer broadband services through wireless transmission. Most of these technologies failed to capture the mass market because of the high costs of equipment. This is where WiMAX can make a difference.

In the first place, technical advances have made non-line-of-sight propagation possible, thus increasing the range of transmission. The IEEE 802.16-2004 standards ensure low interference transmission over a relatively large area. This means that a single transmission tower can service up to 60 businesses at the speed of a T1 line, or hundreds of homes at DSL speeds.

Secondly, the WiMAX Forum has been formed to work out interoperability of IEEE802.16 implementations. The Forum will create implementation profiles and certification programs. This ensures that the technology is launched in an organized manner.

Last but not the least WiMAX has the full backing of Intel. Intel and Proxim are developing components that are WiMAX compatible.

What This Means

All of these have implications for the commercial viability of WiMAX. Currently providing last mile connectivity is the most expensive element to the service provider in terms of material, manpower and time. Setting up transmission powers can prove to be a more inexpensive, one-time investment. Providing connection to an entire high-rise or community can now be achieved in a matter of one or two business days. The service provider is subsequently able to reduce the bill to the end user.

The backing of Intel is another significant factor. Mass manufacture of WiMAX compatible chips will bring down the cost of receptor equipment, another advantage for the consumer.

Stumbling Blocks

So far is technology. WiMAX looks like an excellent option in countries and regions where wired broadband is not yet commonly available, or difficult to establish due to geographical challenges. However the IEEE 802.16 (fixed point-to-point) may not penetrate markets where wired connectivity is ubiquitous. It is the IEEE 802.16e (for mobile wireless access) that these regions are likely to embrace.

There has been a lot of excitement about the possibility of bringing diverse services as telephony, video and data under one umbrella with WiMAX. The possibility also has commercial challenges that need to be tackled. It calls for better streamlining of back office operations of the players involved. Service providers will have to work together to develop single-point billing solutions to the consumer as well as efficient mutual settlement systems.

The Overall Picture

Economies of scale is what will make all the difference. Cheap availability of WiMAX enabled equipment and low operating costs to the incumbent operators paint a very attractive picture. However the old commercial systems are not equipped to handle the billing and settlement challenges that WiMAX poses. This has to change. That achieved, WiMAX can grow as a powerful supplementary system to the existing DSL structure and eventually replace it.

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Posted on: February 12, 2008

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