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Mobile WiMAXOpportunities, Strategies

, 2007-2012& Forecasts

. . . information you can do business with

MARKET ANALYSIS &

STRATEGIC ASSESSMENT

2007-2012

Mobile WiMAX: Opportunities, Strategies & Forecasts 2007-2012

Mobile WiMAX

Opportunities, Strategies & Forecasts 2007-2012


First Edition May 2006

© Juniper Research Limited All rights reserved.

Published by: Juniper Research Limited,

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ISBN (Book): 1-904405-82-7 ISBN (Electronic): 1-904405-83-5

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Printed in United Kingdom

Aditya Kaul has asserted his right under the Copyright, Designs and Patent Act 1988 to be identified as the

author of this Work

The views expressed in this report are not necessarily those of the publisher. Whilst information, advice or

comment is believed to be correct at time of publication, the publisher cannot accept any

responsibility for its completeness or accuracy. Accordingly, the publisher, author, or distributor shall

not be liable to any person or entity with respect to any loss or damage caused or alleged to be caused

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Foreword

Juniper Research Limited Juniper Research is a European based provider of business intelligence. We specialise in providing high quality data and fully-researched analysis to manufacturers, financiers, developers and service/content providers across the communications sector.

Juniper is fully independent and able to provide unbiased and reliable assessments of markets, technologies and industry players. Our team is drawn from experienced senior managers with proven track records in each of their specialist fields.

Author Aditya Kaul is a Senior Analyst with Juniper Research and has worked on various topics throughout his career including areas such as MVNOs, Mobile Content, WiMAX, Software Defined Radio, Content Streaming Technologies, Mobile Handsets, Multiplayer Mobile Gaming and Long Haul Fiber Optics. He has worked as an intern at Qualcomm CDMA Technologies, USA and Siemens, India before working with Evalueserve, India as a Team Leader where his group was responsible for providing telecom industry research to clients worldwide. Aditya has a bachelor's degree in Electrical Engineering from Regional Engineering College, Surat, India. He also has Masters Degrees in Electrical Engineering from Colorado State University, USA and Industrial Engineering from The Pennsylvania State University, USA.

Regional Definitions Developed World:

North America: Canada, USA

Western Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Switzerland, UK

Developed Asia: South Korea, Japan, Taiwan, Hong Kong and Singapore

Australia: Australia, New Zealand

Developing World:

South America: Continent of South America and Mexico

India India

China China (excluding Taiwan)


Eastern Europe: Bulgaria, Croatia, Czech Republic, Estonia, Hungary’ Latvia, Lithuania, Macedonia, Serbia/Montenegro, Poland, Romania, Russia, Slovakia, and Slovenia

Rest of World: Consists of Africa, Middle East & South East Asia


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Table of Contents Table of Contents........................................................................... 1

List of Forecasts............................................................................ 13

Glossary ......................................................................................... 17

Executive Summary .......................................................... 21

Who Should Read This Report?.................................................. 21

Mobile WiMAX (802.16e-2005) .................................................. 22 Figure ES-1: WiMAX Timeline.......................................................................................................22 Figure ES-2: Difference between OFDM and OFDMA .............................................................23

Comparison of Mobile WiMAX with Other Mobile Broadband Technologies......23 Table ES-1: WiMAX Comparisons ................................................................................................24

Mobile WiMAX Applications: Personal Broadband ................. 24 The Opportunity...................................................................................................................25

Figure ES-3: Costs per bit for Wireless Data Technologies.....................................................25 Demand Drivers....................................................................................................................26 Demand Suppressants..........................................................................................................26

Forecasts ....................................................................................... 26 Methodology ..........................................................................................................................26

Gompertz Curve ..............................................................................................................27 Fisher Pry Model...............................................................................................................27

Mobile WiMAX Market.......................................................................................................27 Figure ES-4: Mobile WiMAX Subscribers ('000) Fixed and Personal Broadband – Global Forecast 2007 – 2012 .......................................................................................................................28 Figure ES-5: Mobile WiMAX Subscribers ('000) by Developed & Developing World – Global Forecast 2007 – 2012 ..........................................................................................................29 Figure ES-6: Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World – Global Forecast 2007-2012.......................................................................29 Figure ES-7: Value of Mobile WiMAX Services Market ($m) – Global Forecast 2007 – 2012......................................................................................................................................................30 Figure ES-8: Fixed & Mobile WiMAX Subscribers Compared – Global Forecast 2006-2012...............................................................................................................................................................30

WiMAX Value Chain Analysis .................................................... 31 Silicon Vendors......................................................................................................................31 Equipment Manufacturers (OEMs/ODMs) ......................................................................31 Network Operators/Service Providers (NO/SP) ..........................................................31

1. Mobile WiMAX – The Technology.............................. 33

1.1 What is WiMAX? ................................................................... 33


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Figure 1-1: WiMAX timeline........................................................................................................... 34 1.1.1 OFDM........................................................................................................................... 34

Figure 1-2: OFDM Spectrum .......................................................................................................... 35

1.2 Mobile WiMAX (802.16e-2005)............................................ 35 Figure 1-3: Difference between OFDM and OFDMA............................................................... 36 Table 1-1: Scalable OFDM: Sub Carrier Permutations ............................................................. 37

1.3 Other Mobile Broadband Access Technologies ................. 37 1.3.1 Flash OFDM................................................................................................................. 37

Figure 1-4 Network Layer Architecture for Flash OFDM....................................................... 38 1.3.2 UMTS-TDD ................................................................................................................. 39 1.3.3 HSDPA.......................................................................................................................... 39 1.3.4 CDMA 1X EVDO ...................................................................................................... 40

1.4 Technology Comparisons...................................................... 40 Table 1-2: WiMAX Comparisons.................................................................................................. 41

1.4.1 Coverage vs Throughput.......................................................................................... 41 1.4.2 Frequency Reuse and Spectral Efficiency .............................................................. 41 1.4.3 Frequency Selective Fading....................................................................................... 42

Figure 1-5: Frequency Selective Fading: CDMA vs OFDM....................................................... 42 1.4.4 Power Control............................................................................................................ 42 1.4.5 Adaptive Modulation and Coding ........................................................................... 43 1.4.6 Soft Handoff................................................................................................................. 43 1.4.7 Cell Breathing.............................................................................................................. 43 1.4.8 Smart Antennas .......................................................................................................... 43

1.5 Mobile WiMAX Frequencies ................................................ 44 1.5.1 2.5 GHz ........................................................................................................................ 44

1.6 Duplexing Techniques ........................................................... 45 1.6.1 FDD............................................................................................................................... 45

Figure 1-6: Frequency Division Duplexing ................................................................................... 45 1.6.2 TDD .............................................................................................................................. 45

Figure 1-7: Time Division Duplexing............................................................................................. 46

1.7 WiMAX Forum ...................................................................... 46 1.7.1 Working Groups ........................................................................................................ 46

i. Marketing Working Group......................................................................................... 46 ii. Service Provider Working Group............................................................................ 46 iii. Regulatory Working Group ..................................................................................... 47 iv. Technical Working Group........................................................................................ 47 v. Networking Working Group.................................................................................... 47 vi. Applications Group .................................................................................................... 47 vii. Certification Group................................................................................................... 47

1.7.2 WiMAX Certification ................................................................................................ 47 i. Development of Test Scripts and Validation.......................................................... 48 ii. Lab Preparation............................................................................................................ 48 iii. Validation of Test Scripts.......................................................................................... 48 iv. Certification Testing .................................................................................................. 48

a. Conformance Testing............................................................................................. 48 b. Interoperability Testing ......................................................................................... 48

1.7.3 WiMAX Forum View ................................................................................................ 48 i. Fixed WiMAX ............................................................................................................... 48


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ii. Mobile WiMAX ............................................................................................................49

2. Personal Broadband and 3G......................................... 51

2.1 Personal Broadband............................................................... 51 Figure 2-1: The Future of Connectivity, Content, Consumption and Context....................52 Figure 2-2: Mobile WiMAX and Personal Broadband................................................................53

2.2 The Need for Mobility............................................................ 53 2.2.1 Shift from POTS to Cellular and Laptops Outselling Desktops.......................54

Figure 2-3: Worldwide Fixed vs. Mobile Lines per 100 Inhabitants........................................54 2.2.2 The Emergence of 3G and Mobile Content..........................................................54

Figure 2-4: The Evolution of Mobile Applications.......................................................................55 Figure 2-5: The 3G Family of Technologies and Their Evolution Map ...................................55 Figure 2-6: The Popular Mobile Content Applications ..............................................................56

2.2.3 Video iPod Ignites Portable Video Revolution .....................................................56 2.2.4 Mobile Access to Desktop PC Content ................................................................57

Figure 2-7: Orb Service on a PDA Accessing TV on the Desktop .........................................58

2.3 3G Issues.................................................................................. 58 2.3.1 Cost Issues with 3G ...................................................................................................58

i. High Costs of 3G Licenses..........................................................................................59 Figure 2-8: Cost of 3G Spectrum per Population.......................................................................59

ii. High Costs of 3G Intellectual Property Rights (IPR)............................................59 Figure 2-9: Companies Owning 3G IPR........................................................................................60

2.3.2 Costs per bit: 3G vs Mobile WiMAX.....................................................................60 Figure 2-10: 3G vs. WiFi costs for Data Access .........................................................................61 Figure 2-11: Costs per bit for Wireless Data Technologies ....................................................62

3. Market for Mobile WiMAX .......................................... 63

3.1 Demand Drivers ..................................................................... 63 3.1.1 Mobile WiMAX Standard Ratified: Certification Process Initiated..................63

Table 3-1: 802.16e-2005 Product Timelines ................................................................................64 3.1.2 CPE: Reduction in Costs and Size...........................................................................64

i. Intel: Moving from Fixed WiMAX towards Mobile WiMAX..............................64 Figure 3-1: Mobile WiMAX CPE Roadmap..................................................................................65

3.1.3 3G Vendors Treating Mobile WiMAX as Complimentary................................65 Figure 3-2: Nokia Strategy for WiMAX and HSPA ....................................................................66 Figure 3-3: Nokia Ultrasite BTS......................................................................................................66

3.1.4 WiBro Adoption Starting with Korea....................................................................67 Figure 3-4: Samsung M8000 WiBro Phone ..................................................................................67

3.1.5 Widening Gap Between Mobile Bandwidth Demand Usage and ARPU ........67 Figure 3-5: Mobile Bandwidth Demand and ARPU ....................................................................68

3.1.6 Low Cellular Penetration in Developing Countries............................................68

3.2 Demand Suppressants ........................................................... 68 3.2.1 Delays in the Mobile WiMAX Certification Process ..........................................68 3.2.2 Frequency Availability ................................................................................................69

3.3 Market Characteristics .......................................................... 69


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3.3.1 Demographics: Larger Urban Demand, Limited Rural Demand...................... 69 Figure 3-6: Forecasts for Mobile Data Traffic Demand ............................................................ 70

3.3.2 User Cases................................................................................................................... 71 i. Mobile Workers ........................................................................................................... 71

Figure 3-7: Survey of Mobile Executives in W. Europe on Mobile Phone Usage ................ 71 ii. Delivery Services and Fleet Management............................................................... 72

3.3.3 Regions: Both Developed and Developing ........................................................... 73 3.3.4 Services: Voice and Data .......................................................................................... 73

Figure 3-8: European Mobile vs Data ARPU ............................................................................... 74 Figure 3-9: UMA Network.............................................................................................................. 75

3.4 802.16e Silicon Startup Market View .................................. 75 3.4.1 Beceem Communications......................................................................................... 75

4. Mobile WiMAX: Equipment Vendors..........................77

4.1 Equipment Vendors ............................................................... 77 4.1.1 Navini Networks ........................................................................................................ 77

i. The Company................................................................................................................ 77 ii. Products......................................................................................................................... 78 iii. WiMAX Strategy ........................................................................................................ 78 iv. Customers.................................................................................................................... 78

4.1.2 Nortel Networks ....................................................................................................... 79 i. The Company................................................................................................................ 79 ii. Products......................................................................................................................... 79 iii. WiMAX Strategy ........................................................................................................ 79 iv. Customers.................................................................................................................... 79

4.1.3 Motorola ...................................................................................................................... 80 i. The Company................................................................................................................ 80 ii. WiMAX Products........................................................................................................ 80 iii. WiMAX Strategy ........................................................................................................ 80 iv. Customers.................................................................................................................... 80

4.1.4 Adaptix ......................................................................................................................... 81 i. The Company................................................................................................................ 81 ii. Products......................................................................................................................... 81 iii. WiMAX Strategy ........................................................................................................ 81 iv. Customers.................................................................................................................... 82

4.1.5 Alcatel ........................................................................................................................... 82 i. The Company................................................................................................................ 82 ii. Products......................................................................................................................... 82 iii. Strategy ......................................................................................................................... 82 iv. Customers.................................................................................................................... 82

5. Mobile WiMAX Subscriber Forecasts .........................83

5.1 Forecasting Technique .......................................................... 83 5.1.1 Statistical Analysis....................................................................................................... 83

i. Gompertz Curve .......................................................................................................... 83


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Figure 5-1: Typical Gompertz Curve.............................................................................................84 ii. Fisher Pry Model ..........................................................................................................84

Figure 5-2: Fisher Pry Modelling for Digital vs Analogue Subscribers ....................................85 5.1.2 Key Assumptions ........................................................................................................85 5.1.3 Methodology ................................................................................................................86

Figure 5-3: Forecast Model Methodology.....................................................................................87

5.2 Cellular Subscribers – Base Data.......................................... 88 5.2.1 Developed World Forecasts ....................................................................................88

Figure 5-4: Cellular Mobile Users ('000) – Developed World Forecast 2007 – 2012........88 Table 5-1: Cellular Mobile Users ('000) – Developed World Forecast 2007 – 2012.........89

5.2.2 Developing World ......................................................................................................89 Figure 5-5: Cellular Mobile Users ('000) – Developing World Forecast 2007 – 2012 .......89 Table 5-2: Cellular Mobile Users ('000) – Developing World Forecast 2007 – 2012 ........89

5.2.3 Global Forecasts..........................................................................................................90 Figure 5-6: Cellular Mobile Users (‘000) – Global Forecast 2007-2012 ................................90 Table 5-3: Cellular Mobile Users (‘000) – Global Forecast 2007-2012 .................................90

5.3 Mobile WiMAX Subscribers.................................................. 90 5.3.1 Optimistic Scenario (Personal Broadband) ...........................................................91

i. Mobile WiMAX Users as % of 2G/3G Subscribers ...............................................91 Table 5-4: Mobile WiMAX (Personal Broadband) Users as % of 2G/3G Subscribers – Developed World Forecast 2007 – 2012 (Optimistic Scenario).............................................91 Table 5-5: Mobile WiMAX Mobile Users as % of 2G/3G Subscribers – Developing World Forecast 2007 – 2012 (Optimistic Scenario) ...............................................................................92

ii. Developed World Forecasts .....................................................................................92 Figure 5-7: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developed World Forecast 2007 – 2012.....................................................................................92 Table 5-6: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developed World Forecast 2007 – 2012.....................................................................................92

iii. Developing World Forecasts....................................................................................93 Figure 5-8: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developing World Forecast 2007 – 2012....................................................................................93 Table 5-7: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developing World Forecast 2007 – 2012....................................................................................93

iv. Global Forecasts..........................................................................................................93 Table 5-8: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Global Forecast 2007 – 2012 ..........................................................................................................93 Figure 5-9 Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Global Forecast 2007 – 2012 ..........................................................................................................94

5.3.2 Conservative Scenario (Personal Broadband)......................................................94 i. Mobile WiMAX Users as % of 2G/3G Subscribers ...............................................94

Table 5-9: Mobile WiMAX Mobile Users as % of 2G/3G Subscribers – Developed World Forecast 2007 – 2012 (Conservative Scenario) ..........................................................................94 Table 5-10: Mobile WiMAX Mobile Users as % of 2G/3G Subscribers – Developing World Forecast 2007 – 2012 (Conservative Scenario).............................................................95

ii. Developed World Forecasts .....................................................................................95 Figure 5-10: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developed World Forecast 2007 – 2012 ..................................................................95 Table 5-11: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developed World Forecast 2007 – 2012 ..................................................................95

iii. Developing World Forecasts....................................................................................96 Table 5-12: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developing World Forecast 2007 – 2012..................................................................96 Figure 5-11: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developing World Forecast 2007 – 2012..................................................................96

iv. Global Forecasts..........................................................................................................96


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Table 5-13: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Global Forecast 2007 – 2012 ....................................................................................... 96 Figure 5-12: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Global Forecast 2007 – 2012 ....................................................................................... 97

5.3.3 Moderate Scenario (Personal Broadband)............................................................ 97 i. Mobile WiMAX Users as % of 2G/3G Subscribers .............................................. 97 ii. Developed World Forecasts..................................................................................... 97

Table 5-14: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developed World Forecast 2007 – 2012 .................................................................................... 97 Figure 5-13: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developed World Forecast 2007 – 2012 .................................................................................... 98

iii. Developing World Forecasts ................................................................................... 98 Figure 5-14: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developing World Forecast 2007 – 2012 ................................................................................... 98 Table 5-15: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developing World Forecast 2007 – 2012 ................................................................................... 99

iv. Global Forecasts ......................................................................................................... 99 Figure 5-15: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Global Forecast 2007 – 2012 ......................................................................................................... 99 Table 5-16: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Global Forecast 2007 – 2012 ......................................................................................................... 99

5.3.4 Mobile WiMAX Scenario Comparisons..............................................................100 i. Developed World Comparison ..............................................................................100

Figure 5-16 Mobile WiMAX Subscribers ('000) Personal Broadband - Developed World Forecast 2007 – 2012..................................................................................................................... 100 Table 5-17: Mobile WiMAX Subscribers ('000) Personal Broadband - Developed World Forecast 2007 – 2012..................................................................................................................... 100

ii. Developing World Comparison.............................................................................100 Table 5-18: Mobile WiMAX Subscribers ('000) Personal Broadband - Developing World Forecast 2007 – 2012..................................................................................................................... 100 Figure 5-17: Mobile WiMAX Subscribers ('000) Personal Broadband - Developing World Forecast 2007 – 2012..................................................................................................................... 101

iii. Global World Comparison ....................................................................................101 Figure 5-18: Mobile WiMAX Subscribers ('000) Personal Broadband - Developed and Developing World Forecast 2007 – 2012 ................................................................................. 101 Table 5-19: Mobile WiMAX Subscribers ('000) Personal Broadband - Developed and Developing World Forecast 2007 – 2012 ................................................................................. 101

5.3.5 Mobile WiMAX (Fixed WiMAX Switch) ............................................................102 i. Mobile WiMAX Subscribers as % of 2G/3G Subscribers ..................................102 ii. Developed World Forecasts...................................................................................102

Figure 5-19: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developed World Forecast 2007 – 2012 ....................................................................................................... 102 Table 5-20: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developed World Forecast 2007 – 2012 ....................................................................................................... 103

iii. Developing World Forecasts .................................................................................103 Figure 5-20: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developing World Forecast 2007 – 2012 ....................................................................................................... 103 Table 5-21: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developing World Forecast 2007 – 2012 ....................................................................................................... 104

iv. Global Forecasts .......................................................................................................104 Figure 5-21: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Global Forecast 2007 – 2012..................................................................................................................... 104 Table 5-22: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Global Forecast 2007 – 2012..................................................................................................................... 104

5.3.6 Mobile WiMAX (Personal Broadband + Fixed) ................................................105 i. Mobile WiMAX Subscribers ....................................................................................105 ii. Developed World Forecasts...................................................................................105


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Figure 5-22: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developed World Forecast 2007 – 2012.................................................................................. 105 Table 5-23: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developed World Forecast 2007 – 2012.................................................................................. 105

iii. Developing World Forecasts................................................................................. 106 Figure 5-23: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developing World Forecast 2007 – 2012................................................................................. 106 Table 5-24: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developing World Forecast 2007 – 2012................................................................................. 106

iv. Global Forecasts....................................................................................................... 106 Figure 5-24: All Mobile WiMAX (Personal Broadband + Fixed) Subscribers ('000) by Developed & Developing World – Global Forecast 2007 – 2012 ....................................... 107 Table 5-25: All Mobile WiMAX (Personal Broadband + Fixed) Subscribers ('000) by Developed & Developing World – Global Forecast 2007 – 2012 ....................................... 107

5.4 Fixed & Mobile WiMAX Subscribers ................................. 107 5.4.1 Developed World Forecasts ................................................................................. 108

Figure 5-25: Fixed & Mobile WiMAX Subscribers ('000) Developed World Forecast 2006 – 2012 ............................................................................................................................................... 108 Table 5-26: Fixed & Mobile WiMAX Subscribers ('000) Developed World Forecast 2006 – 2012 ............................................................................................................................................... 108

5.4.2 Developing World Forecasts ................................................................................ 108 Figure 5-26: Fixed & Mobile WiMAX Subscribers ('000) Developing World Forecast 2006 – 2012 ............................................................................................................................................... 109 Table 5-27: Fixed & Mobile WiMAX Subscribers ('000) Developing World Forecast 2006 – 2012 ............................................................................................................................................... 109

5.4.3 Global Forecasts....................................................................................................... 110 Figure 5-27: Fixed & Mobile WiMAX Subscribers ('000) Global Forecast 2006 – 2012. 110 Table 5-28: Fixed & Mobile WiMAX Subscribers ('000) Global Forecast 2006 – 2012.. 110

6. Mobile WiMAX Equipment Forecasts ......................111

6.1 Mobile WiMAX Base Stations ............................................ 111 6.1.1 Number of Base Stations ....................................................................................... 111

i. Developed World Forecasts ................................................................................... 112 Figure 6-1: Number of Mobile WiMAX Base Stations – Developed World Forecast 2007 – 2012 ............................................................................................................................................... 112 Table 6-1: Number of Mobile WiMAX Base Stations - Developed World Forecast 2007 – 2012................................................................................................................................................... 112

ii. Developing World Forecasts ................................................................................ 112 Table 6-2: Number of Mobile WiMAX Base Stations – Developing World Forecast 2007 – 2012 ............................................................................................................................................... 112 Figure 6-2: Number of Mobile WiMAX Base Stations – Developing World Forecast 2007 – 2012 ............................................................................................................................................... 113

iii. Global Forecasts....................................................................................................... 113 Table 6-3: Number of Mobile WiMAX Base Stations – Global Forecast 2007 – 2012... 113 Figure 6-3: Number of Mobile WiMAX Base Stations – Global Forecast 2007 – 2012.. 113

6.1.2 Value of Base Station Market ................................................................................ 114 Table 6-4: Average Cost of Mobile WiMAX Base Stations ($) Developed World Forecast 2007 – 2012 ..................................................................................................................................... 114

i. Developed World Forecasts ................................................................................... 114 Figure 6-4: Value of Mobile WiMAX Base Stations ($m) Market - Developed World Forecast 2007 – 2012 .................................................................................................................... 114 Table 6-5: Value of Mobile WiMAX Base Stations ($m) Market - Developed World Forecast 2007 – 2012 .................................................................................................................... 115


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ii. Developing World Forecasts ..................................................................................115 Table 6-6: Value of Mobile WiMAX Base Station ($m) Market - Developing World Forecast 2007 – 2012..................................................................................................................... 115 Figure 6-5: Value of Mobile WiMAX Base Stations ($m) Market - Developing World Forecast 2007 – 2012..................................................................................................................... 115

iii. Global Market Revenue Forecasts........................................................................116 Figure 6-6: Value of Mobile WiMAX Base Stations ($m) Market – Global Forecast 2007 – 2012 ................................................................................................................................................... 116 Table 6-7: Value of Mobile WiMAX Base Stations Equipment Market ($m) Global Forecast 2007 – 2012..................................................................................................................... 116

6.2 Customer Premise Equipment........................................... 116 6.2.1 Average Cost of Mobile WiMAX CPE................................................................116

Table 6-8: Average Cost of Mobile WiMAX CPE ($) 2007 – 2012 ..................................... 116 6.2.2 Developed World Revenue Forecasts ................................................................117

Figure 6-7: Value of Mobile WiMAX CPE Market ($m) Developed World Forecast 2007 – 2012................................................................................................................................................ 117 Table 6-9: Value of Mobile WiMAX CPE Market ($m) Developed World Forecast 2007 – 2012 ................................................................................................................................................... 117

6.2.3 Developing World Revenue Forecasts................................................................118 Figure 6-8: Value of Mobile WiMAX CPE Market ($m) Developing World Forecast 2007 – 2012................................................................................................................................................ 118 Table 6-10: Value of Mobile WiMAX CPE Market ($m) Developing World Forecast 2007 – 2012................................................................................................................................................ 118

6.2.4 Global Market Revenue Forecasts .......................................................................119 Figure 6-9: Value of Mobile WiMAX CPE Market ($m) Global Forecast 2007 – 2012 ...119 Table 6-11: Value of Mobile WiMAX CPE Market ($m) Global Forecast 2007 – 2012..119

6.3 Total Mobile WiMAX Equipment Market ........................ 119 6.3.1 Developed World Revenue Forecasts ................................................................120

Figure 6-10: Value of Mobile WiMAX CPE + Base Station Market ($m) Developed World Forecast 2007 – 2012..................................................................................................................... 120 Table 6-12: Value of Mobile WiMAX CPE + Base Station Market ($m) Developed World Forecast 2007 – 2012..................................................................................................................... 120

6.3.2 Developing World Revenue Forecasts................................................................121 Figure 6-11: Value of Mobile WiMAX CPE + Base Station Market ($m) Developing World Forecast 2007 – 2012..................................................................................................................... 121 Table 6-13: Value of Mobile WiMAX CPE + Base Station Market ($m) Developing World Forecast 2007 – 2012..................................................................................................................... 121

6.3.3 Global Forecasts.......................................................................................................121 Table 6-14: Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World – Global Forecast 2007-2012.................................................................... 121 Figure 6-12: Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World – Global Forecast 2007-2012.................................................................... 122

7. Mobile WiMAX : Data/Voice Services Forecasts.....123

7.1 Mobile WiMAX Data Services Subscribers....................... 123

Mobile WiMAX Data Services Revenue.................................. 123 Table 7-1: Average Revenue per month per Mobile WiMAX Data User ($) Forecast 2007 – 2012................................................................................................................................................ 124

7.1.1 Developed World Revenue Forecasts ................................................................124 Figure 7-1: Mobile WiMAX Data Services Revenue ($m) – Developed World Forecast 2007 – 2012...................................................................................................................................... 124


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Table 7-2: Mobile WiMAX Data Services Revenue ($m) – Developed World Forecast 2007 – 2012 ..................................................................................................................................... 125

7.1.2 Developing World Revenue Forecasts ............................................................... 125 Figure 7-2: Mobile WiMAX Data Services Revenue ($m) – Developing World Forecast 2007 – 2012 ..................................................................................................................................... 125 Table 7-3: Mobile WiMAX Data Services Revenue ($m) – Developing World Forecast 2007 – 2012 ..................................................................................................................................... 126

7.1.3 Global Mobile WiMAX Data Revenue Forecasts............................................. 126 Table 7-4: Mobile WiMAX Data Services Revenue ($m) – Global Forecast 2007 – 2012............................................................................................................................................................ 126 Figure 7-3: Mobile WiMAX Data Services Revenue ($m) – Global Forecast 2007 – 2012............................................................................................................................................................ 126

7.2 Mobile WiMAX Voice Services Subscribers ..................... 127 7.2.1 Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers............... 127

Table 7-5: Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers – Developed World Forecast 2007 – 2012....................................................................................................... 127 Table 7-6: Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers – Developing World Forecast 2007 – 2012....................................................................................................... 127

7.2.2 Developed World Forecasts ................................................................................. 128 Figure 7-4: Number of Mobile WiMAX Voice Services Subscribers (‘000) – Developed World Forecast 2007 – 2012....................................................................................................... 128 Table 7-7: Number of Mobile WiMAX Voice Services Subscribers (‘000) – Developed World Forecast 2007 – 2012....................................................................................................... 128

7.2.3 Developing World Forecasts ................................................................................ 129 Table 7-8: Number Mobile WiMAX Voice Services Subscribers (‘000) – Developing World Forecast 2007 – 2012....................................................................................................... 129 Figure 7-5: Number Mobile WiMAX Voice Services Subscribers (‘000) – Developing World Forecast 2007 – 2012....................................................................................................... 129

7.2.4 Global Forecasts....................................................................................................... 130 Figure 7-6: Mobile WiMAX Voice Services Subscribers (‘000) – Global Forecast 2007 – 2012................................................................................................................................................... 130 Table 7-9: Mobile WiMAX Voice Services Subscribers (‘000) – Global Forecast 2007 – 2012................................................................................................................................................... 130

7.3 Mobile WiMAX Voice Services Revenue........................... 130 Table 7-10: Average Revenue per Mobile WiMAX Voice Subscriber ($) Forecast 2007 – 2012................................................................................................................................................... 131

7.3.1 Developed World Revenue Forecasts................................................................ 131 Figure 7-7: Value of Mobile WiMAX Voice Services Market ($m) – Developed World Forecast 2007 – 2012 .................................................................................................................... 131 Table 7-11: Value of Mobile WiMAX Voice Services Market ($m) – Developed World Forecast 2007 – 2012 .................................................................................................................... 131

7.3.2 Developing World Revenue Forecasts ............................................................... 132 Figure 7-8: Value of Mobile WiMAX Voice Services Market ($m) – Developing World Forecast 2007 – 2012 .................................................................................................................... 132 Table 7-12: Value of Mobile WiMAX Voice Services Market ($m) – Developing World Forecast 2007 – 2012 .................................................................................................................... 132

7.3.3 Global Mobile WiMAX Voice Revenue Forecasts ........................................... 133 Figure 7-9: Mobile WiMAX Voice Services Revenue ($m) – Global Forecast 2007 – 2012............................................................................................................................................................ 133 Table 7-13: Mobile WiMAX Voice Services Revenue ($m) – Global Forecast 2007 – 2012............................................................................................................................................................ 133

7.4 Mobile WiMAX Data & Voice Subscribers Split............... 133 7.4.1 Developed World Forecasts ................................................................................. 134

Figure 7-10: Mobile WiMAX Subscribers Voice/Data Split (000’s) – Developed World Forecast 2007 – 2012 .................................................................................................................... 134


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Table 7-14: Mobile WiMAX Data & Voice Services Subscribers (000’s) ............................ 134 7.4.2 Developing World Forecasts.................................................................................134

Figure 7-15: Mobile WiMAX Subscribers Voice/Data Split (000’s) – Developing World Forecast 2007 – 2012..................................................................................................................... 134 Figure 7-11: Mobile WiMAX Subscribers Voice/Data Split ('000) – Developing World Forecast 2007 – 2012..................................................................................................................... 135

7.5 Global Mobile WiMAX Data & Voice Revenue Forecasts...................................................................................................... 135

Figure 7-12: Value of Mobile WiMAX Data & Voice Services Market ($m) – Global Forecast 2007 – 2012..................................................................................................................... 136 Table 7-16: Value of Mobile WiMAX Data & Voice Services Market ($m) – Global Forecast 2007 – 2012..................................................................................................................... 136

8. WiMAX : Security .......................................................137

8.1 Introduction.......................................................................... 137

8.2 Security Features in WiMAX ............................................. 137 8.2.1 Encryption: DES3 and AES .....................................................................................138

Figure 8-1: Block Cipher Encryption........................................................................................... 138 Figure 8-2: CBC Mode ................................................................................................................... 139

8.2.2 Authentication: X.509 Certificates and EAP ......................................................139 Figure 8-3: EAP (Extensible Authentication Protocol) Used in a WLAN........................... 140

8.3 Security Processors ............................................................. 140 Figure 8-4: Security Processor Configuration........................................................................... 141

8.3.1 WiMAX Security Processor: Vendors.................................................................141 i. Cavium Networks ......................................................................................................141

a. The Company ........................................................................................................141 b. Products..................................................................................................................142 c. OEM Client.............................................................................................................142

ii. Hifn ...............................................................................................................................142 a. The Company ........................................................................................................142 b. Products..................................................................................................................142 c. OEM Client.............................................................................................................143

iii. SafeNet........................................................................................................................143 a. The Company ........................................................................................................143 b. Products..................................................................................................................143 c. OEM Client.............................................................................................................143

iv. Elliptic Semiconductor.............................................................................................144 a. The Company ........................................................................................................144 b. Products..................................................................................................................144

Figure 8-5: Block Diagram of Elliptic Semiconductor LLP-01 Core ..................................... 144 c. OEM Client.............................................................................................................145

8.4 Security for WiMAX Applications ..................................... 145 8.4.1 Application Layer Security......................................................................................145

Figure 8-6: Application Layer Security Infrastructure ............................................................. 145 Figure 8-7: Securing the Perimeter in a WiMAX Network ................................................... 146

8.4.2 Network Layer Security .........................................................................................147


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9. WiMAX : Value-Chain Analysis .................................149

9.1 The WiMAX Value-Chain ................................................... 149 Figure 9-1: WiMAX Value Chain................................................................................................. 149

9.1.1 Silicon Vendors......................................................................................................... 150 9.1.2 Original Equipment Manufacturer (OEM)/Original Device Manufacturer (ODM).................................................................................................................................. 150 9.1.3 Wholesale Service Provider/Network Operator ............................................. 150 9.1.4 Retail Service Provider ........................................................................................... 151

9.2 Analysis.................................................................................. 151 9.2.1 Silicon Vendors......................................................................................................... 151

i. Intel’s Focus: Fixed or Mobile WiMAX? ............................................................... 151 ii. What are the Focus Areas for WiMAX Silicon Start-ups? .............................. 151 iii. Do Mobile WiMAX Silicon Vendors See An Awareness In The Market?... 152 iv. What Are The Opportunity Areas Within WiMAX Silicon?......................... 152

9.2.2 OEM/ODMs .............................................................................................................. 152 i. What Form Factors Can We Expect For WiMAX CPEs ................................. 152 ii. Is There A Mobile WiMAX Strategy For Fixed WiMAX OEMs?................... 153 iii. How Will IPR Costs Compare To Rival Technologies? .................................. 153 iii. Are OEMs Religious About WiMAX? ................................................................. 153 iv. Where Does the ‘Dual Mode’ Opportunity Lie For WiMAX? ..................... 153

9.2.3 Network Operator/Service Provider (NO/SP)................................................. 154 i. Which Business Models Can WiMAX Enable?.................................................... 154 ii. What Are Operators Looking For Initially In WiMAX?................................... 154 iii. How Does Software Defined Radio Help A WiMAX Operator?................. 154 iv. Do WiMAX Strategies Differ With Size Of Operator? .................................. 155 v. What Cost Metrics Do Operators Use In Evaluating WiMAX? .................... 155 vi. What Are The Strategies Of Fixed Line Operators With Regards To Mobile WiMAX?.......................................................................................................................... 155

Appendix 1 – Web Addresses for Companies Included......... 157


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List of Forecasts All forecasts are for 2007-2012 (unless noted below). Developed World includes North America; Western Europe; Developed Asia & Australia Developing World includes South America; India; China; Eastern Europe & Rest of World Regional forecasts cover: North America; South America; Western Europe; Asia Pacific; Rest of World.

Cellular Mobile Users

Cellular Mobile Users ('000) – Developed World Forecast Cellular Mobile Users ('000) – Developing World Forecast Cellular Mobile Users (‘000) – Global Forecast

Mobile WiMAX Subscribers

Developed World

Mobile WiMAX (Personal Broadband) Users as % of 2G/3G Subscribers (Optimistic Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Mobile WiMAX Mobile Users as % of 2G/3G Subscribers (Conservative Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) Fixed & Mobile WiMAX Subscribers ('000) 2006 – 2012

Developing World

Mobile WiMAX (Personal Broadband) Users as % of 2G/3G Subscribers (Optimistic Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Mobile WiMAX Mobile Users as % of 2G/3G Subscribers (Conservative Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) Fixed & Mobile WiMAX Subscribers ('000) 2006 – 2012

Global

Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Mobile WiMAX Subscribers ('000) Personal Broadband - Developed and Developing World


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Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) All Mobile WiMAX (Personal Broadband + Fixed) Subscribers ('000) by Developed & Developing World Fixed & Mobile WiMAX Subscribers ('000) 2006 – 2012

Mobile WiMAX Base Stations

Developed World

Number of Mobile WiMAX Base Stations Average Cost of Mobile WiMAX Base Stations ($) Value of Mobile WiMAX Base Stations ($m) Market

Developing World

Number of Mobile WiMAX Base Stations Value of Mobile WiMAX Base Stations ($m) Market

Global

Number of Mobile WiMAX Base Stations Value of Mobile WiMAX Base Station ($m) Market Value of Mobile WiMAX Base Stations Equipment Market ($m)

Customer Premise Equipment

Average Cost of Mobile WiMAX CPE ($)

Developed World

Value of Mobile WiMAX CPE Market ($m) Value of Mobile WiMAX CPE + Base Station Market ($m)

Developing World

Value of Mobile WiMAX CPE Market ($m) Value of Mobile WiMAX CPE + Base Station Market ($m)

Global

Value of Mobile WiMAX CPE Market ($m) Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World

Mobile WiMAX Data & Voice Services

Average Revenue per Mobile WiMAX Data User ($)


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Average Revenue per Mobile WiMAX Voice Subscriber ($)

Developed World

Mobile WiMAX Data Services Revenue ($m) Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers Number of Mobile WiMAX Voice Services Subscribers (‘000) Value of Mobile WiMAX Voice Services Market ($m)

Developing World

Mobile WiMAX Data Services Revenue ($m) Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers Number of Mobile WiMAX Voice Services Subscribers (‘000) Value of Mobile WiMAX Voice Services Market ($m)

Global

Mobile WiMAX Data Services Revenue ($m) Number of Mobile WiMAX Voice Services Subscribers (‘000) Mobile WiMAX Voice Services Revenue ($m) Mobile WiMAX Data & Voice Services Subscribers (000’s) Value of Mobile WiMAX Data & Voice Services Market ($m)


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Glossary Abbreviation Description

2.5G A generic name for the transitional technologies form second generation cellular (2G) to third generation cellular (3G).

3G Third generation cellular telephone systems that are expected to provide data communication speeds up to two megabits per second

AAS Adaptive Antenna System

AES Advanced Encryption Standard

AMC Adaptive Modulation and Coding

ARPU Average Revenue per User

ASIC Application Specific Integrated Circuit

BB Broadband

BDC Business Development Bank of Canada

BER Bit Error Rate

CA Certificate Authority

CAGR Compound Annual Growth Rate

CAPEX Capital Expenditure

CBC Cipher Block Chaining

CCM Counter with CBC Media Access Control

CCMP Cipher block chaining Message authentication code Protocol

CDMA Code Division Multiple Access

CES Consumer Electronics Show

CMT Centrino Mobile Technology (Intel)

CPE Customer Premise Equipment

CTR Counter (AES)

DES Data Encryption Standard

DOCSIS Data Over Cable Service Interface Specification

DoS Denial of Service

EAP Extensible Authentication Protocol

ECB Electronic Code Book (AES)

EDGE Enhanced Data for Global Evolution

EVDO Evolution Data-Only

FDD Frequency Division Duplexing


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FFT Fast Fourier Transform

GHz Giga Hertz

GPRS General Packet Radio Service

GSM Global System for Mobile Communication

HARQ Hybrid Automatic Repeat Request

HDTV High Definition Television

HSDPA High Speed Downlink Packet Access

IDS Intrusion Detection Systems

IEEE The Institute of Electrical & Electronic Engineers

IMS IP Multimedia System

IP Internet Protocol

ITU International Telecommunications Union

IxEVDO Evolution data Only Standard that has evolved from cdma2000 IX

LOS Line of Sight

MAC Media Access Control (layer)

MIMO Multiple Input Multiple Output

NLOS Non Line of Sight

NO/SP Network Operator/Service Provider

ODM Original Device Manufacturer

OEM Original Equipment Manufacturer

OFDM Orthogonal Frequency Division Multiplexing

OFDMA Orthogonal Frequency Division Multiple Access

OPEX Operating Expenditure

OSI Open Systems Interconnection

PCMCIA Personal Computer Memory Card International Association

PDA Personal Digital Assistant

PHY Physical (layer)

PKI Public-Key Infrastructure

POTS Plain Old Telephone System

PSK Phase Shift Key

QAM Quadrature Amplitude Modulation

QoS Quality of Service

ROW Rest of World

RSA Rivest Shamir Adleman (security encryption algorithm)

SAB Special Areas Board

SBC Session Border Control


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S-COFDMA Scalable Orthogonal Frequency Division Multiple Access

SCP Secure Communications Processor

SDP Session Definition Protocols

SDR Software Defined Radio

SIP Session Initiation Protocol (signalling protocol for Voice over IP)

SIP Silicon IP (Elliptic Semiconductors)

SMS Short Messaging Service

SoC System on Chip

sOFDMA Scalable Orthogonal Frequency Division Multiple Access

SQL Sequel Language (Database)

TBD To be Decided

TCP/IP Transmission Control Protocol/ Internet Protocol

TDD Time Division Duplexing

TDES Triple Data Encryption Standard

TDMA Time Division Multiple Access

UMA Unlicensed Mobile Access

UMTS-TDD Universal Mobile Telecommunications System – Time Division Duplexing

VoD Video on Demand

VoIP Voice over IP (Internet Protocol)

VoWiFi Voice over WiFi

VPN Virtual Private Network

VPNs Virtual Private Networks

WiBro Wireless Broadband

WiFi IEEE Wireless 802.11b Wireless Network Technology – Wireless Fidelity

WiMAX IEEE 802.16 Wireless Network Technology – Worldwide Interoperability for Microwave Access

WLAN Wireless Local Area Network

XCBC eXtended Cipher Block Text Chaining


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Executive Summary

This report is focused on Mobile WiMAX and the application of Personal Broadband, which allows for anytime, anywhere access of high-bandwidth applications, content and communication. The report explains the technology and the technical differences between Mobile WiMAX and similar broadband mobile technologies like Flash OFDM (Orthogonal Frequency Division Multiplexing), UMTS-TDD (Universal Mobile Telecommunications System – Time Division Duplexing), CDMA (Code Division Multiple Access), 1x-EVDO Evolution data Only Standard that has evolved from cdma2000 1X) and HSDPA (High Speed Downlink Packet Access). It also covers Mobile WiMAX spectrum, market characteristics and profiles of leading equipment vendors, an overview on WiMAX security and an analysis of Mobile WiMAX for each member of the value chain. The qualitative research is coupled with quantitative forecasts that cover subscriber numbers, base station and CPE (Customer Premise Equipment) equipment, as well as voice and data services for Mobile WiMAX. The forecasts are split by developing and developed regions to give a clearer and much more granular view of the Mobile WiMAX market.

Who Should Read This Report? Mobile/Cellular Operators who would like to evaluate Mobile WiMAX in terms of the technology, make comparisons with 3G technologies and understand the market segments that Mobile WiMAX would cater to. The profiles of leading Mobile WiMAX vendors will offer a look at their strategies and outlook of the market. The report hopes to be a reference guide for operators who are at the forefront of adoption for Mobile WiMAX and would like to know the benefits and industry activity around the technology.

Telecom Equipment Vendors will be able to use this report to extract valuable information from unbiased technical comparisons and consult equipment and market forecasts based on realistic timelines of adoption. The report also has a section on WiMAX security and covers vendor strategies and products that are in the WiMAX security processor space.


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Silicon Vendors are important to the Mobile WiMAX value chain from the supply side. They will find this report useful because apart from laying out equipment vendor strategies the report points out the essential areas of opportunity within the Mobile WiMAX space.

Regulators are the key to Mobile WiMAX adoption worldwide as they control the spectrum in which Mobile WiMAX would operate. This report gives regulators a good overview of Mobile WiMAX and provides granular forecasts by region.

Investment Funds/Venture Capitalists will be able to use this report to identify key areas and regions of opportunity within Mobile WiMAX and analyse the business models and strategies being adopted. The report provides a broad overview of the market and provides an indication of the activity levels within the market that is in the early adopters stage.

Wireline/Wireless ISPs are expected to adopt Mobile WiMAX in the future similar to Mobile/Cellular operators. The report identifies the areas within the Mobile WiMAX market that operators should focus upon. The report also provides analysis on the security features of WiMAX, which is important from the enterprise customer point of view.

Mobile WiMAX (802.16e-2005) WiMAX is defined as Worldwide Interoperability for Microwave Access, which allows for broadband wireless access of information in the form of packet data. It was introduced in October 2001 and is also known as the IEEE 802.16 standard. The standard defines the air interface, also known as the PHY (Physical) layer as well as the MAC (Media Access Control) layer. WiMAX plans to provide fixed as well as mobile access in large metropolitan areas. The WiMAX Forum has defined a timeline in which different standards will be released. Figure ES-1 shows how the WiMAX standards will evolve from a fixed solution to a full mobility solution.

Figure ES-1: WiMAX Timeline

Source: Intel

The concept of portability or nomadicity would allow user movement within a specified area like an enterprise piconet. The goal of WiMAX is for untethered, unrestricted mobility that would allow access of mobile data at high speeds.


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Mobile WiMAX will be based on the Orthogonal Frequency Division Multiple Access (OFDMA) protocol. OFDMA allows for multiple users to be placed on various sub carriers on the same channel at the same time. The effect of sub-channelisation is enhanced in OFDMA to enable flexible mobile and nomadic operation. This allows for the various sub-carriers to be assigned to different users.

Figure ES-2: Difference between OFDM and OFDMA

Source: WiMAX Forum

There is another enhancement planned in the Mobile WiMAX standard by incorporating Scalable OFDMA (sOFDMA). This enhances the coverage by adjusting the size of the FFT responsible for converting the signal into zeroes and ones. Thus the signal can be scaled to different bandwidths depending on the conditions.

Comparison of Mobile WiMAX with Other Mobile Broadband Technologies

Both Mobile WiMAX and Flash OFDM are based on the basic OFDM modulation technique, but both have enhancements that give them an edge over each other. The difference though is that Mobile WiMAX is a standard based technology while Flash OFDM is a proprietary technology. To understand the difference between Mobile WiMAX and UMTS-TDD and HSDPA, one has to understand the difference between OFDM and CDMA. There are differences in terms of coverage and throughput, frequency reuse and spectral efficiency, frequency selective fading, power control, modulation and handoffs.


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Table ES-1: WiMAX Comparisons

CDMA 1X EVDO Rev 0

802.16d – Fixed WiMAX

Flash OFDM CDMA 1X EVDO Rev A

802.16e – Mobile WiMAX

Spectrum Licensed Unlicensed & Licensed 2-11 GHz

Licensed 450 and 700 MHz

Licensed TBD

Peak Data Rate

2.4 Mbps (DL)

153.6 kbps (UL)

18.75 Mbps (5 MHz)

3 Mbps (DL)

1.8 Mbps (UL)

3.1 Mbps (DL)

1.8 Mbps (UL)

18.75 Mbps (5 MHz)

Channel size 1.25 MHz 1.25 MHz 1.25 MHz

Range Max: 59 km

Typical: 3-5 km

Max: 50 km

Typical 8-10 km

Max:

Typical: 3-5 km

Max: 100 km

Typical: 3-5 km

Max: 50 km

Typical: 3-5 km

Mobility Full None Full Full Full

Voice CS Voice on 1X

TDM or VoIP VoIP VoIP or CS Voice on 1X

TDM or VoIP

Commercial Availability

Now Now Now 2006-2007 2007-2008

Source: Nortel: Juniper Research

Mobile WiMAX Applications: Personal Broadband The key points to note about Mobile WiMAX and personal broadband are the following:

• It is different from the market of fixed wireless broadband and residential/office broadband access. The scenario of personal broadband fits in well with the fixed broadband scenario because they both complement each other. Fixed WiMAX is a last mile access technology as well as a compelling backhaul solution, while Mobile WiMAX is an anywhere, always accessible technology that the user can user can use while he is on the move. However, apart from being on the move, personal broadband would also allow the user to access the technology from his home/office where he is a fixed wireless user. Thus there is a case for Mobile WiMAX competing with Fixed WiMAX. Therefore, Juniper Research believes that although Mobile WiMAX and Fixed WiMAX are meant to serve different markets, they will exist as complementary as well as competing solutions.

• The market for Mobile WiMAX is larger than the market for Fixed WiMAX because Mobile WiMAX is based on the individual and Fixed WiMAX is based on the


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household or office premises. Thus there is obviously larger number of people than households, which makes the market rather compelling.

The Opportunity

There has been a marked shift from the Plain Old Telephone System (POTS) to cellular technology coupled with the fact that laptops are now outselling desktops. These are trends that point to the fact that the average user wants mobility in voice as well as data. The emergence of 3G includes applications like mobile Internet, mobile gaming, mobile commerce, music download and mobile video applications like mobile TV, video calling over mobile that point to a similar trend. Various applications that were mainly accessible from the home through a PC, TV or gaming console have now become portable and mobile due to 3G. There is also the trend to have mobile access to your PC and the video iPod revolution has enabled the new definition of mobile TV. There is a large opportunity for Mobile WiMAX with this trend towards mobility and personal broadband. The user is now open to the market for personal broadband applications, which was not the case a few years back when 3G was launched.

Figure ES-3: Costs per bit for Wireless Data Technologies

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

GPRS EDGE & CDMA1X

WCDMA WiMAX Wires

Source: Motorola

However 3G, which is leading this mobile broadband revolution at the moment, is plagued with high costs of licenses and Intellectual property. The cost per bit for 3G is also an issue when looking at the economics for the mobile operator and margins with 3G applications. Although it has improved with regards to earlier 2.5G technologies it still has higher costs per bit in comparison to WiMAX. The increasing need of data intensive applications and personalised mobile broadband will see this cost being a very important metric to measure the economic feasibility of a wireless technology in terms of data transfer.


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Demand Drivers

• Mobile WiMAX standard was ratified in January 2006 and the certification process was initiated. The certifications are planned to begin in end-2006.

• The planned reductions in cost and size will be beneficial to the operators as well as the vendors and is an indicator of the potential volumes and demand in the market. The CPE is key to driving demand for Mobile WiMAX.

• The leading 3G equipment vendors like Nokia, Ericsson, Nortel, Siemens are treating Mobile WiMAX as complementary to 3G. This will be a significant driver for the market taking into account the installed base of 3G.

• WiBro, which is a profile of Mobile WiMAX will see a rollout in Korea during 2006 and will increase interest in the technology.

• The widening gap between mobile bandwidth demand usage and Average Revenue per User (ARPU) will drive cellular operators to look for efficient technologies like WiMAX that have a reduced cost per bit.

• The low levels of penetration for cellular phones in developing regions would drive operators to take advantage of technologies like Mobile WiMAX that would allow developing regions to leapfrog developed regions.

Demand Suppressants

• Although the Mobile WiMAX certification process certification process has been initiated, any delays in the process will allow for other mobile broadband technologies like 3G, Flash OFDM and UMTS-TDD to take advantage and establish presence.

• There is a larger issue of spectrum availability in the two big markets of US and Europe with respect to the availability of 2.5 GHz spectrum on which Mobile WiMAX is supposed to operate.

Forecasts

Methodology

Juniper Research has built an extensive model for the Mobile WiMAX forecasts based on historic data, realistic assumptions and data collected from extensive primary and secondary research. The forecasts are based on scientific analysis using statistical techniques. There are primarily two statistical methods that have been used for the forecasts. This includes Gompertz Curve Analysis and Fisher Pry Modelling.


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Gompertz Curve

Gompertz curve is a growth curve that is used to calculate the growth rate of systems. The Gompertz curve is typically used in applications where the growth is slowest at the start like population, HDTV, digital cameras, cellular phone uptake, Internet uptake etc., It is a typical ‘S-curve’ that has slow growth initially, followed by a steep growth and slowing down towards the later stages. The formula for Gompertz curve is given by

where

Y = variable that needs to be estimated

A = Lower Limit

B = Upper Limit

M = Time of maximum growth

B = Growth rate

X = Time

Fisher Pry Model

The Fisher Pry Model is another S-curve model that is used in technology forecasting especially in areas where one technology replaces the other. It is used in technology replacement forecasting in the case of a technically superior technology replacing an old technology. It is used quite frequently in forecasts where the installed base of communications will change over time to a new one.

Y(T) = 1/( 1 + e(-B(T-A)))

where

Y(T) = Fraction of potential market served by the new technology at time T

B = Adoption rate

A = Time the technology reaches 50% of the total market

Mobile WiMAX Market

Juniper Research has used the base of cellular subscribers to estimate the number of Mobile WiMAX that will use it as personal broadband service. However, the fixed wireless capability of Mobile WiMAX apart from being a mobile and nomadic access service would allow it to attract Fixed WiMAX users that are purely fixed wireless based. This is expected to start around the 2007 timeframe because that is when Mobile WiMAX is expected to become available in its certified form. Juniper Research estimates in its forecasts for Mobile WiMAX


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subscribers that there will be a definite shift of Fixed WiMAX subscribers to Mobile WiMAX. The number of Fixed WiMAX subscribers is thus a sum of the personal broadband subscribers and the fixed broadband subscribers that will transition from the base of potential Fixed WiMAX subscribers. The forecasts for Fixed WiMAX subscribers have been taken from the Juniper Research report on Fixed WiMAX. The total number of Fixed WiMAX worldwide subscribers that are expected to transition will grow from 117m in 2007 to 7.2m in 2012. The total base of Mobile WiMAX worldwide subscribers including personal broadband and fixed broadband subscribers will thus grow from 1.7m in 2007 to 21.4m in 2012.

Figure ES-4: Mobile WiMAX Subscribers ('000) Fixed and Personal Broadband – Global Forecast 2007 – 2012

0

5,000

10,000

15,000

20,000

25,000

2007 2008 2009 2010 2011 2012

Fixed BB

Personal BB

Source: Juniper Research

The addition of Fixed WiMAX subscribers to the base of personal broadband Mobile WiMAX subscribers will raise the subscriber numbers for Mobile WiMAX. In the developed world we will see an increase from 729,000 to 8.7m from 2007-12 and the developing world will see an increase from 977,000 in 2007 to 12.6m in 2012.

The total value of the Mobile WiMAX equipment market consists of Mobile WiMAX base stations and CPEs. The CPE prices for Mobile WiMAX are expected to reduce during the 2007-2012 time period due to the high volumes. The total value of Mobile WiMAX equipment for the developed world will reach $1.06bn in 2012. On the other hand, the developing world market will reach $1.53bn. Thus the global market for Mobile WiMAX equipment is estimated to be 2.53bn in 2012. Juniper Research estimates a dip in the developed world market around the 2009-2010 timeframe. The region of developed Asia will see a decline in the CPE market from 2010 onwards because the reduction in CPE prices will not be proportional to the growth of subscribers, which will reach saturation levels. This will in effect reduce the overall Mobile WiMAX equipment market.


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Figure ES-5: Mobile WiMAX Subscribers ('000) by Developed & Developing World – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Total Developed World

Total Developing WorldAll0

5,000

10,000

15,000

20,000

25,000

.


The forecasts for Mobile WiMAX services are based upon the voice and data services market. Juniper Research analysis predicts that the market for voice services will be less than 10% of the total market in 2012. The Mobile WiMAX services market will grow from $604m in 2007 to $8.1bn in 2012.

Figure ES-6: Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World – Global Forecast 2007-2012

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2007 2008 2009 2010 2011 2012

Total Developing WorldTotal Developed World



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Figure ES-7: Value of Mobile WiMAX Services Market ($m) – Global Forecast 2007 – 2012

$0.0

$2,000.0

$4,000.0

$6,000.0

$8,000.0

$10,000.0

2007 2008 2009 2010 2011 2012

Voice ServicesData Services


The number of Mobile WiMAX subscribers is expected to be larger than Fixed WiMAX subscribers. The Mobile WiMAX market will be initiated in 2007 and is expected to equal the Fixed WiMAX market by 2008 after which it is estimated to outgrow it. In 2012 there are expected to be 21.4m Mobile WiMAX subscribers, while there will be 10.1m Fixed WiMAX subscribers. In total the WiMAX subscribers are expected to be 1.3m in 2006 and will reach close to 15m subscribers by 2010, further growing to 31m subscribers in 2012.

Figure ES-8: Fixed & Mobile WiMAX Subscribers Compared – Global Forecast 2006-2012

0

5000

10000

15000

20000

25000

2006 2007 2008 2009 2010 2011 2012

Mobile WiMaxFixed WiMax



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WiMAX Value Chain Analysis This analysis consists of highlights, observations, benefits and issues that the value chain would find useful while it is evaluating WiMAX as a technology and a business opportunity.

Silicon Vendors

• Intel is backing Fixed WiMAX but has a larger focus on Mobile WiMAX and laptop integrated chips

• WiMAX silicon start-ups are focusing on CPE equipment and micro base stations.

• Mobile WiMAX silicon vendors will need to play the role of educating operators during the initial stages of the market.

• Smart Antenna and RF chips are big opportunity areas in WiMAX silicon

Equipment Manufacturers (OEMs/ODMs)

• Multiple form factors being worked on for WiMAX CPE including PDAs (Personal Digital Assistants), iPods, USB cards, gaming consoles, palm handhelds, cell phones and smartphones

• Fixed WiMAX OEMs are working on a Mobile WiMAX migration path

• IPR costs for WiMAX will be lower than rival technologies like Flash OFDM and UMTS-TDD

• OEM vendors are bullish on OFDM/OFDMA rather than WiMAX

• OEMs see a larger opportunity for WiFi and Mobile WiMAX dual mode CPEs rather than for WiMAX and 3G dual mode products

Network Operators/Service Providers (NO/SP)

• WiMAX enables multiple business models apart from 3G operators offering complimentary WiMAX coverage

• Operators are interested in performance of WiMAX in the real world.

• SDR (Software Defined Radio) solutions for WiMAX increase CAPEX (Capital Expenditure) but reduce OPEX (Operating Expenditure) for Network Operators

• Larger operators are opting for Mobile WiMAX, while smaller are operators jumping onto Fixed WiMAX


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• Operators see advantages with lower cost per bit but interested in alternative cost metrics when comparing WiMAX to DSL/Cable or 3G

• Fixed Internet providers that plan of using Mobile WiMAX are wary of competing with incumbent mobile carriers


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1 Mobile WiMAX – The Technology The chapter aims to provide an understanding of the technology behind Mobile WIMAX, namely the technology of OFDMA (Orthogonal Frequency Division Multiple Access) and SOFDMA (Scalable Orthogonal Frequency Division Multiple Access). There is an analysis of other mobile broadband technologies like CDMA (Code Division Multiple Access) 1x EVDO (Evolution data Only Standard that has evolved from cdma2000 IX), HSDPA (High Speed Downlink Packet Access), Flash OFDM (Orthogonal Frequency Division Multiplexing) and UMTS TDD (Universal Mobile Telecommunications System – Time Division Duplexing). The chapter compares the various technologies to Mobile WiMAX and points out the strengths and weaknesses. It also covers the spectrum under which Mobile WiMAX will operate along with a description of the WiMAX Forum, the certification process and the Forum’s view on WiMAX.

1.1 What is WiMAX? WiMAX is defined as Worldwide Interoperability for Microwave Access, which allows for broadband wireless access of information in the form of packet data. It was introduced in October 2001 and is also known as the IEEE 802.16 standard. The standard defines the air interface, also known as the PHY (Physical) layer as well as the MAC (Media Access Control) layer. These are the bottom two layers, which define the OSI 7 layer model that define a network technology. The protocols defined in these two layers allow it to control how packet data is handled at the air interface and at the first point of entry and exit of a system. The MAC layer is designed in such a way that it controls various PHY specifications. The original specification allowed it to operate in the 10 to 66 GHz range. There were subsequent changes made to the standard, which curtailed it to the 2-11 GHz range. This was primarily done to improve its range. The standard is meant to operate in both licensed and unlicensed frequencies.

WiMAX plans to provide fixed as well as mobile access in large metropolitan areas. It was developed as a successor to the WiFi standard, which provides wireless access in local area networks. The aim of the WiMAX standard is to ensure that interoperability is maintained among devices. The WiMAX Forum is leading the way by ensuring that the standards, which


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are covered under WiMAX, are released according to their scheduled timelines and that guidelines are maintained by the vendors. The WiMAX forum is made up of prominent industry vendors like Intel, Fujitsu, Samsung, AT&T, Nokia, Cisco, Motorola, Nortel and operators like Sprint, British Telecom, ZTE, Korea Telecom.

Figure 1-1: WiMAX timeline

Source: Intel

The WiMAX Forum has defined a timeline in which different standards will be released. Figure 1-1 shows how the WiMAX standards will evolve from a fixed solution to a full mobility solution. WiMAX is proposed to provide fixed access to the home or a hotspot, in its first release. The concept of portability or nomadicity would be the next step, which would allow user movement within a specified area like an enterprise piconet. The goal of WiMAX is for untethered, unrestricted mobility that would allow access of mobile data at high speeds.

1.1.1 OFDM

WiMAX is based on the OFDM (Orthogonal Frequency Division Multiplexing) protocol where the information packet is broken down into closely spaced carriers, which are sent on individual frequencies. The data on each individual or orthogonal carrier is independently modulated using Quadrature Amplitude Modulation (QAM) or Phase Shift Keying (PSK) techniques. The orthogonality allows for signals to be perpendicular to each other in mathematical terms, which means that they are able to overlap without interfering with each other. The OFDM signal is the sum of the individual orthogonal carriers.

The following figure shows the conceptual diagram of the OFDM spectrum on a power and frequency scale.

The advantages of OFDM include high resistance to noise and high spectral efficiency. This means that operators achieve higher utilisation of their costly spectrum. OFDM is normally combined with error correcting codes leading to coded OFDM or COFDM. This gives it the property of coping with multipath fading which is the phenomenon due to which multiple copies of the signal are received at various time intervals. Subchannelisation is another method that is used in conjunction with OFDM to where a sub-set of carriers in COFDM are used to carry upstream traffic. This is advantageous to the end client as it increases his power and range. This is being used in the Fixed WiMAX standard.


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Figure 1-2: OFDM Spectrum

Source: Leader Electronics

1.2 Mobile WiMAX (802.16e-2005) The Mobile WiMAX standard has been established to provide specifications for mobile broadband wireless access systems. The IEEE Working group ratified the standard in December 2005. Though the fixed version of WiMAX focuses on the point to multipoint broadband access and the last mile solution, the mobile version of WiMAX will focus on mobility for broadband. The strength lies in the fact that apart from mobility it will also support fixed and nomadic access. The peak throughput rates are expected to be 75 Mbps, but the typical throughput will be lesser than that. The throughput depends on the bandwidth in which the system operates. 802.16e is supposed to operate in the bandwidth of 10 MHz, which gives the ‘best possible’ throughput at 37 Mbps1. Mobile WiMAX will be based on the Orthogonal Frequency Division Multiple Access (OFDMA) protocol. OFDMA allows for multiple users to be placed on various sub carriers on the same channel at the same time. The effect of sub-channelisation is enhanced in OFDMA to enable flexible mobile and nomadic operation. This allows for the various sub-carriers to be assigned to different users. These groups of sub-carriers are also termed as sub-channels. There is also support for features such as Hybrid Automatic Repeat Request (HARQ), which reduces delays and Multiple Input Multiple Output (MIMO) antenna support, which increases throughput, reduces error rates and multipath fading.

1 The Promise of WiMAX, Motorola


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Figure 1-3: Difference between OFDM and OFDMA

Source: WiMAX Forum

There is another enhancement in the Mobile WiMAX standard by incorporating Scalable OFDMA (sOFDMA). This enhances the coverage by adjusting the size of the FFT (Fast Fourier Transform) responsible for converting the signal into zeroes and ones. Thus the signal can be scaled to different bandwidths depending on the conditions. This scalability feature is only available with the Mobile WiMAX standard at the moment and is not compatible with the fixed standard. With S-COFDMA the client side needs to have powerful hardware due to the enhanced processing needs. One of the reasons for supporting scalability is because as a typical mobile user moves in a cell he experiences Doppler shift or a shift in his frequency, which degrades the quality of the signal. Research has found that by keeping the sub-channel spacing fixed while changing the FFT size or bandwidth, the level of degradation decreases. The draft of the 802.16e standard states that it supports the 2048, 1024, 512 and 128 FFT sizes based on different bandwidths. Table 1-1 shows the FFT sizes according to channel bandwidth. The Mobile WiMAX standard does not have support for 256 FFT, which the Fixed WiMAX standard operates upon. This makes the Mobile and Fixed WiMAX standards unable to operate together. The other main difference is in the MAC layers supported in both the standards. The Mobile WiMAX standard has extra header incorporated in the MAC layer to support mobility handoffs. Thus the incorporation of 256 FFT support would still prevent the two standards to be able to interoperate because of the way their MAC layers are built.


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Table 1-1: Scalable OFDM: Sub Carrier Permutations

Parameters Values

System bandwidth (MHz)

1.25 2.5 5 10 20

FFT size (N FFT) 128 N/A 512 1024 2048

Number of guard subcarriers

22 N/A 86 173 345

Number of used subcarriers

106 N/A 426 851 1703

Number of data subcarriers

96 N/A 384 768 1536

Number of pilot subcarriers (uses both variable and constant sets)

9 N/A 42 83 166

Number of subchannels

2 N/A 8 16 32

Source: Daily Wireless

Although 802.16e is incompatible with 802.16-2004, by supporting the 1024 FFT mode the Mobile WiMAX standard will be compatible with the WiBro (Wireless Broadband) standard in Korea. The WiBro standard is the Korean profile of Mobile WiMAX, which has already been released and it operates in the 2.3 GHz band. It is scheduled to start operation in April 2006.

1.3 Other Mobile Broadband Access Technologies

1.3.1 Flash OFDM

Juniper Research spoke with Joe Barrett, Marketing Director, EMEA at Flarion Technologies

Flash OFDM is backed by Flarion Technologies, which recently got acquired by Qualcomm. Flash stands for Fast Low Latency Access with Seamless Handoff. It is a flavour of OFDM that incorporates the advantages of various wireless technologies, making it suitable for mobile high-speed data communication. Most wireless technologies have been defined at the PHY and MAC layer, and ignore the higher layers in the protocol stack. With the advent of high-speed wireless data communication, delays in the higher layers become more prominent. On the other hand, data has different requirements from the traditional wireless voice applications. Data is bursty in nature, the message sizes are different and is sensitive to latency especially for applications like Video on Demand. This creates large overheads that are in turn responsible


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for delays at the higher layers. There is granularity incorporated in Flash OFDM, which allows one to send very small pieces of information, without large overheads attached to it. The other advantage of higher layers being defined is that it is able to support QoS.

Traditional fixed line data networks have used the TCP/IP (Transmission Control Protocol/Internet Protocol) protocol, which has been able to provide decent performance and has been the chosen medium to transmit data over wires. However, there have been issues with using TCP/IP in wireless technologies because of the high error rates associated with the air interface. Flash OFDM is able to provide decent performance using TCP/IP due to the enhancements in the MAC and the link layers. The wireless channel is also plagued by various performance hindrances like multipath fading, delay spread and Doppler shifts. Flash OFDM tries to minimise these impairments by employing a fast hopping pseudorandom sequence to spread the signal over a much larger bandwidth, which reduces the error rates in the signal. With fast hopping the group of tones in which the user is divided, are switched between multiple frequencies to minimise frequency selective fading caused by Doppler shifts.

Figure 1-4 Network Layer Architecture for Flash OFDM

Source: Flarion Technologies

Flash OFDM is designed in such a way that it can interoperate with existing networking protocols and standards that use IP. This is because the technology allows it to be horizontally layered at the PHY and MAC/link layers while it is vertically layered for the above layers. Thus it can leverage off-the-shelf IP products for backhaul connections to any IP domain, just like a WLAN network is built. This gives it the flexibility of being a high-speed mobile data technology with the advantages of quick installation and high scalability similar to WLAN (Wireless Local Area Network) technologies.

One of the main advantages that Flash OFDM has is that it operates in the sub 1 GHz frequency range. This allows it to be able to have a larger range than WiMAX, which will most probably operate in the 2.5 GHz range and above. Flash OFDM operates in the 450 MHz and 700 MHz range. At the 450 MHz range, Flash OFDM is able to operate with 75% fewer cell sites than an equivalent CDMA or WiMAX equivalent operating at 2.1-2.5 GHz. There is a large subscriber base for Flash OFDM at 450 MHz, with around 34 operators around the world using this frequency with 900 million subscribers. In terms of voice applications on Flash OFDM, it can support 31 simultaneous calls on 450 MHz because Flash has good uplink


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support. It also supports high QoS because of the end-to-end IP network. Flash has also shown in trials that it can support high-speed mobile backhaul for 160 kmph trains.

Flash OFDM has low latency levels (50 ms) and can handle network congestion, supports a symmetrical application like voice, bursty data applications and is power efficient. Flash OFDM has good performance both in the downlink (1-1.5 Mbps average; 32 Mbps peak) and the reverse link (300-500 Kbps average; 900 kbps peak).

The 450 MHz spectrum was traditionally used by NMT (Nordic Mobile Telephony) analog cellular operators. The demise of the technology has opened up spectrum and apart from Flash OFDM; CDMA450 is the other technology that is using the spectrum. Flash OFDM is although superior in terms of performance to CDMA450 and provides support for the IP core. On the other hand, CDMA450 provides IP support depending on the vendor that supplies it.

1.3.2 UMTS-TDD

UMTS TDD uses Time Division Duplexing (TDD) and is a packet data based technology of the 3G backed UMTS standard. It is being supported by the 3GPP alliance and is also known as TD-CDMA. The technology has the advantage of having a large user base, which includes the numerous operators across Europe and Asia who use the IMT-2000 TDD frequencies of 1900-1920 MHz and 2010-2025 MHz. There is also the provision of operating in the 3.6 GHz licensed band. The operators have the advantage of controlling the downlink capacities allowing for spectral efficiency. It supports high-speed mobile handoffs at speeds of 120 kmph and frequency reuse for N=1 (single frequency network). Operators in the IMT 2000 3G band are only allowed to use one dedicated TDD channel. N= 1 frequency reuse allows for a base station to have a single frequency band and not divide it into smaller frequency bands. All the cells operate on a single frequency by maintaining a low signal to noise ratio in the overlap regions where interference takes place. In general, higher frequency reuse allows for lesser interference but also reduces the throughput in the cell by the number of times that the frequency is divided into. Thus UMTS is able to provide high throughput by using single frequency reuse.

The peak downlink speeds are around 12 Mbps. UMTS TDD is one of three standards supported by UMTS which share the same higher layer protocol stacks. UMTS TDD is defined for the physical layer and is compatible with the other standards of FDD W-CDMA and TD-SCDMA.

1.3.3 HSDPA

High Speed Downlink Packet Access (HSDPA) is the packet data service for the Wideband CDMA (WCDMA) standard. It is also being supported by the 3GPP alliance. Similar to UMTS-TDD it allows for operators to increase throughput of the downlink. There are many improvements from WCDMA, which have been incorporated in HSDPA. In WCDMA users who are close to the base station see their signal power being reduced as they come close to the base station. This limits their data rate. In HSDPA there are multiple codes that can be used and their coding rates can change. This means that users who are close to the base station can change to a higher coding rate while the users that are further away from the base station can switch to a lower coding rate. Thus all the users are optimally adjusted to maintain their performance. HSDPA has moved the scheduling operations to the base station from the radio link controller. This has improved the response time especially to short term variations. It also uses the Hybrid Automatic repeat request, which minimises the delay in transmissions


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that have errors. These retransmissions take place at the base station level rather than at the radio link controller level.

1.3.4 CDMA 1X EVDO

Juniper Research spoke with Ryan Gorostiza, Director of Strategic Marketing at Qualcomm

The CDMA EVDO (Evolution Data-Only) standard is a part of the family of 3G CDMA standards. It officially belongs to the cdma2000 family and is being backed by Qualcomm. As the name suggests, it supports only data and no voice. In case it is deployed with a voice network it needs to support an extra 1.25 MHz channel. There are three versions of 1x EVDO, which include 1x EVDO Rev 0, Rev A and Rev B. The initial revision of the standard, Rev 0 is an improvement over the 1xRTT data standard. Rev 0 was approved by the ITU (International Communications Union) in 2000 and has been in use all over the world. The Rev A standard offers improvements in latencies and data rates over Rev 0. Rev A can now support low latency applications like VoIP along with Internet services. The data rates for Rev A are around 3 Mbps for the downlink and around 1.8 Mbps for the uplink. Rev A is planned for deployment sometime in 2006-2007. The next revision of the standard, Rev B will be published in early 2006. The data rates are around 73.5 Mbps in the forward link and 27 Mbps in the reverse link. Rev B plans to support OFDM. The deployments in early 2006 will start with Rev A and then will move to Rev B in 2008.

Although EVDO is mainly a mobile wireless technology, the operator Vesper is using it as a fixed broadband solution in Brazil. Qualcomm is also using its CDMA450 solution as a fixed wireless solution in India and is selling 50,000 units a month in India. This is a voice only solution. EVDO will exist in conjunction with FLO technology in the near future according to Qualcomm. In a 6 MHz bandwidth FLO can deliver 20 live streaming channels and 10 audio stereo channels. It can also support clipcasting or small video clips.

1.4 Technology Comparisons Both Mobile WiMAX and Flash OFDM are based on the basic OFDM modulation technique, but both have enhancements that give them an edge over each other. The difference though is that Mobile WiMAX is a standard based technology while Flash OFDM is a proprietary technology. Mobile WiMAX is a standard driven technology supported by almost 250 companies and Flash OFDM is Intellectual property driven and is supported by a single company. The development costs for Mobile WiMAX will be lesser than Flash OFDM because it is standard driven and not IPR (Intellectual Property Rights) driven.

Mobile WiMAX will most probably operate in the 2.3 or 2.5 GHz band, while Flash OFDM operates in the 450 MHz and 700 MHz bands. Thus Flash OFDM will be able to provide equivalent coverage with fewer base stations. On the other hand, a lower frequency means that the propagation through walls and buildings is tougher. This gives Mobile WiMAX an edge over Flash OFDM.


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Table 1-2: WiMAX Comparisons

CDMA 1X EVDO Rev 0

802.16d – Fixed WiMAX

Flash OFDM

CDMA 1X EVDO Rev A

802.16e – Mobile WiMAX

Spectrum Licensed Unlicensed & Licensed 2-11

GHz

Licensed 450 and 700 MHz

Licensed TBD

Peak Data Rate

2.4 Mbps (DL) 153.6 kbps (UL)

18.75 Mbps (5 MHz)

3 Mbps (DL) 1.8 Mbps

(UL)

3.1 Mbps (DL) 1.8 Mbps (UL)

18.75 Mbps (5 MHz)

Channel size 1.25 MHz 1.25 MHz 1.25 MHz

Range Max: 59 km Typical: 3-5 km

Max: 50 km Typical 8-10

km

Max: Typical: 3-5

km

Max: 100 km Typical: 3-5 km

Max: 50 km Typical: 3-5

km

Mobility Full None Full Full Full

Voice CS Voice on 1X TDM or VoIP VoIP VoIP or CS Voice on 1X

TDM or VoIP

Commercial Availability

Now Now Now 2006-2007 2007-2008

Source: Nortel: Juniper Research

Both UMTS-TDD and HSDPA are based on CDMA modulation technique. Mobile WiMAX is based on the OFDM modulation technique. To understand the difference between Mobile WiMAX and UMTS-TDD and HSDPA, one has to understand the difference between OFDM and CDMA.

1.4.1 Coverage vs Throughput

CDMA and OFDM cater for different services and thus provide different features. CDMA was built primarily as a voice technology and thus concentrates on coverage. OFDM on the other hand trades coverage for throughput.

1.4.2 Frequency Reuse and Spectral Efficiency

The technologies of HSDPA and UMTS-TDD can support a frequency reuse of N=1. This means that they can reuse the same channel within each cell and in the adjacent cell. This frequency reuse allows for efficient use of spectrum but degrades throughput and coverage. The characteristic of CDMA, which puts each user on a different code allows for users to not interfere with each other although they are on the same frequency. This interference is not actually zero and exists at the boundaries of each sector. This causes a cloverleaf style coverage area around the base station rather than a circular coverage area. 802.16e on the other hand can operate on frequency reuse of 1 to 3. The higher the reuse factor, the lower the interference in a cell, but it also creates performance degradation of the throughput. It should be able to overcome the performance degradation by using adaptive antennas.


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1.4.3 Frequency Selective Fading

Frequency Selective fading is a phenomenon that is caused due to multipath where different frequencies reflect over a surface into multiple paths. It happens when multiple reflections of the same signal ultimately cancel out at the receiver and thus degrade performance. OFDM performs better than CDMA in terms of multipath fading. OFDM is able to handle frequency selective fading without the use of complex equalisation techniques or noise processing.

CDMA is a wideband modulation technique and wideband technologies usually suffer from fading at a specific frequency. On the other hand, OFDM uses multiple narrowband signals, which causes for fading to occur on a single carrier.

Figure 1-5: Frequency Selective Fading: CDMA vs OFDM

Source: Intel Corporation

In CDMA systems because the signal is spread out over a wider bandwidth the Bit Error Rate (BER) increases, which causes performance degradation. In OFDM systems the BER is smaller and localised to a specific carrier. Thus OFDM is able to handle frequency selective fading much better than CDMA.

1.4.4 Power Control

CDMA networks suffer from the near far problem, which means that if there are two users in a cell transmitting at the same power, then the user who is nearer to the base station will actually cause interference and create noise for the user who is transmitting from further off. This is solved by reducing the power of the user who is nearer and increasing the power of the user who is further away. In 802.16e, which is based on OFDM, the orthogonal sub carrier allocation reduces the power control and the near-far problem.


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1.4.5 Adaptive Modulation and Coding

Due to the power control problem in CDMA networks, HSDPA uses a technique called Adaptive modulation and coding (AMC) to ensure that every user enjoys a high data rate in the cell and is not constrained because he is further off from the base station. HSDPA utilises AMC to improve its data rates based on the channel quality feedback. The peak data rate achieved by HSDPA is around 10.8 Mbps using 15 multicodes and 16QAM modulation. OFDM also uses AMC techniques and is able to achieve the 10 Mbps for the same configuration. Thus OFDM and HSDPA perform similarly using the AMC technique. On the other hand, UMTS-TDD is not known to employ AMC techniques.

1.4.6 Soft Handoff

Handoff happens when a mobile phone user moves from one cell to another cell and the call is not disrupted. In other words the call is transferred from one cell to the other cell without the user realising. This can be done by instantly changing the frequency of the user. This is known as hard handoff. It can also be done by gradually shifting the user from a set of frequencies in one cell to frequencies in the other cell. This is known as soft handoff. Soft handoff is a characteristic of CDMA based technologies. HSDPA and UMTS-TDD being CDMA based technologies support soft handoff.. Soft handoffs usually are more suitable for voice applications which the mobile standards like CDMA and 3G support. The Fixed WiMAX (802.16-2004) standard supports optional handoff capabilities and the Mobile WiMAX standard (802.16e-2005) supports both hard and soft handoff depending on the need of the operator.

1.4.7 Cell Breathing

When systems like HSDPA use the N=1 frequency reuse in a scenario where there are multiple users in a particular cell, the users which are in the periphery of the cell can face interference from the adjoining cell because all the cells are operating under the same frequency. This in turn can be seen as shrinkage in the coverage of the cell, which is also known as ‘cell breathing’. Both 802.16e and UMTS-TDD adopt methods to curtail intra-cell interference, which reduces cell breathing. Thus 802.16e and UMTS-TDD are able to handle cell breathing much more effectively than HSDPA.

1.4.8 Smart Antennas

Smart Antenna technology is being used in OFDM systems as well as CDMA systems. The advantage with the Mobile WiMAX standard is that smart antenna support has been integrated with the protocol. Adaptive Antenna System (AAS) is the smart antenna implementation in Mobile WiMAX. This also known as beamforming. Smart Antennas allow for optimisation of reception signals and radiation in response to the operating environment. This is done by advanced algorithm techniques. This is done with combining multiple standard antenna elements and signal processing capabilities. This helps in increasing the capacity of a wireless system. Beamforming is a part of Smart Antenna technology that increases the gain in the direction of the wanted signal and reduces the gain in the direction of the unwanted interference and noise.


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1.5 Mobile WiMAX Frequencies The WiMAX standard is set to operate in the frequencies that range from 2-11 GHz. This was decided in early 2003 and was a change from the earlier adopted frequencies of 10-66 GHz. The earlier version of the frequencies only supported LOS (Line of Sight) connections. The sub 11 GHz frequencies now support NLOS (Non Line of Sight) connections. This was a significant addition to the standard and has been responsible for increased interest in the technology over the past few years.

There is a debate amongst regulators and operators on how spectrum would be distributed between 3G and Broadband Wireless Access mobility technologies like WiMAX. There are efforts going on that are trying to make the various broadband access technologies interoperable. The ITU WP8F body is trying to encourage interoperability between UMTS and OFDM services. The Mobile WiMAX standard does not have a spectrum allocated to it as of now. The WiMAX Forum is trying to initiate regulators worldwide, to open frequency bands for the mobility standard. The most likely band in which the Mobile WiMAX standard will operate is the 2.5 GHz band.

1.5.1 2.5 GHz

The 2.5 GHz spectrum is used to refer to the frequencies of 2.3 GHz and 2.5-2.7 GHz. It is widely available across the US, Latin America and a few Asian countries. In the US, the spectrum is owned mainly by the operator Sprint, which acquired additional 2.5 GHz spectrum when it bought Nextel in 2005. In Europe the spectrum was allocated for future use by 3G technologies and is in high demand. When European operators bought the 2.1 GHz spectrum for 3G they had also factored in the use of the 2.5-2.69 GHz spectrum for 3G expansion. The European Commission’s radio Spectrum Committee did not come to any decision in the October 2005 meeting, which was supposed to decide whether to open up the spectrum to other technologies like WiMAX. There is a lot of opposition to this from the EU member countries because of the strong support for the IMT-2000 technologies like WCDMA. In case the restriction is not lifted by December then the case goes to the European Parliament and will most likely become a law. This means that the spectrum will be closed for WiMAX operators. The WiMAX Forum is trying to tackle this issue trying to integrate WiMAX in the group of IMT 2000 technologies. The WiMAX Forum is arguing that regulators should not restrict a spectrum to a particular technology and should let the market decide which technology will operate on it. The UK regulator Ofcom has a more liberal view on the use of the 2.5 GHz spectrum for the IMT 2000 technologies as well as WiMAX and future 3G systems. Although, there has not been any decision made so far with regards to auctioning the spectrum in the UK. The 2.5 GHz spectrum is being used by Ultravision in Mexico on a pre-WiMAX solution network by Aperto Networks. It is also being used by Cedarcom in Lebanon to provide a pre-WiMAX service.

WiMAX is supposed to penetrate buildings and walls fairly well and allow the use of indoor CPEs. Thus the 2.5 GHz spectrum appeals to WiMAX broadband service providers who are trying to lobby with their respective regulators to provide access to the frequency so that they could take advantage of the performance and cost gains when compared to 3G technologies. The 2.5 GHz spectrum is said to provide much improved performance for the mobile version of WiMAX. Thus it is expected that when 802.16e becomes a standard, the European and other world markets will open up to the use of the spectrum for WiMAX.


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1.6 Duplexing Techniques Fixed WiMAX operates on two types of duplexing techniques, Frequency Division Duplexing (FDD) and Time Division Duplexing (TDD). Unlicensed WiMAX spectrum will use TDD as its duplexing technique. Licensed WiMAX spectrums will use both TDD and FDD.

1.6.1 FDD

The duplexing technique allows sending and receiving information between the base station and the client device using the same channel or different channels. FDD sends information by dividing it amongst different frequencies. It uses two different channels, which includes one for sending and the other for receiving. Voice has been the traditional application for FDD, and is designed for symmetrical traffic. Voice is considered as symmetrical traffic unlike packet based data traffic. This means that the traffic flows at the same speed in both directions including the uplink and downlink. Voice is sensitive to delays and this takes advantage of paired channels, which can be used for both the uplink and the downlink. The disadvantage with FDD is that it needs to operate in environments where there are paired channels.

Figure 1-6: Frequency Division Duplexing

Source: Samsung

1.6.2 TDD

The TDD technique uses one channel to perform the uplink and downlink operations, unlike the FDD, which uses two separate channels. There is a guard band (guard time) that is maintained to keep the two transmissions separate within the same channel. TDD uses two different time slots when it has to send data in the uplink and downlink. The advantages of TDD are that paired spectrum is not required and it works with asymmetrical applications like packet data. In asymmetrical applications the downlink and uplink operate at different speeds. It also has the capability of pairing with smart antenna technologies and also integrate with WiFi mesh technologies. Due to the requirement of paired frequencies being absent in TDD, it is very suitable for operating in unlicensed environments, which have ‘bursty traffic’.


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Figure 1-7: Time Division Duplexing

Source: Samsung

The disadvantages of using TDD are that because of a single channel being used it is difficult to control the quality of the signal and the user needs to wait for guard times before sending his packet of data. Thus QoS (Quality of Service) capabilities are limited with TDD, which again makes it suitable to operate in unlicensed environments, which do not guarantee a QoS.

1.7 WiMAX Forum The WiMAX Forum is a consortium of more than 250 industry members including equipment vendors, chipset manufacturers and operators. The aim of the forum is to promote the IEEE 802.16 standards, certify equipment and promote interoperability between equipment.

1.7.1 Working Groups

The forum has various working groups that help in promoting the standard and driving adoption worldwide. The working groups are:

i. Marketing Working Group

This group is responsible for marketing the WiMAX standard and creating awareness. The aim is also to promote the advantages of WiMAX over alternative last mile solutions.

ii. Service Provider Working Group

This is a platform for service providers to voice their concerns with regards to broadband Wireless Access and make sure that other working groups are updated on a regular basis with the feedback. It works actively with Service Providers on developing business models for BWA. Apart from that it helps in defining the networking layers built on top of the 802.16 standard and suggest additional functionalities in future versions of the WiMAX standard.


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iii. Regulatory Working Group

This group drives regulators to make frequencies available for the adoption of WiMAX. It is mainly a coordinating group with individual administrations for each region. It also is an interface with Global or Pan-Geo bodies.

iv. Technical Working Group

This working group is one of the main bodies within the forum that helps in identifying the procedures for certification. It also develops specifications for interoperability based on Global Standards. It is responsible for establishing a testing and certification infrastructure for the vendors that need to certify their equipment. This provides profiles and other documents necessary for certification process like PICS (device features), TSS&TP (test specifications).

v. Networking Working Group

This group creates the specifications for the higher-level layers of the WiMAX standard. The Networking group needs to work in coordination with the Service Providers Group in order to deliver a reference architecture model for the networking layers.

vi. Applications Group

There is a need to identify applications that can utilize the potential of WiMAX and create solutions that are unique and user friendly. The applications group works towards creating best practices for such applications.

vii. Certification Group

This group identifies labs that can be used for the purpose of certification, manages the relationship between the lab and the forum and most importantly manages the WiMAX Forum Certified Program.

1.7.2 WiMAX Certification

There is a certain procedure that is followed in order for vendors to certify equipment. Cetecom labs in Malaga, Spain, are the certifying partners of the WiMAX Forum and are being used for Fixed WiMAX certifications. The testing of equipment began at the Cetecom labs in July 2005. The procedure of certification consists of many stages after which the forum finally ratifies the equipment and is ‘WiMAX certified’. The equipment that is certified consists of both base stations and CPEs. The WiMAX forum supports multiple profiles or different frequencies in different bands. The certification procedure for Mobile WiMAX is scheduled to start in late 2006. The various steps that need to be undertaken for certification of a vendor product are as follows:


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i. Development of Test Scripts and Validation

The first step in the procedure is the development of test scripts that describe the tests that need to be performed on the vendor’s product. This is the simplest way of ensuring that the product meets mandatory requirements of the standard.

ii. Lab Preparation

This includes acquiring and checking the test scripts and the test hardware. The scripts are then checked on the hardware to see if they work.

iii. Validation of Test Scripts

The scripts need to be validated over a minimum of 3 vendor products for a particular profile. Once the script passes over the 3 products, the script is termed as being validated.

iv. Certification Testing

This involves two sub tests, which the vendor’s product needs to pass before being certified:

a. Conformance Testing

This is to check is the product conforms to the specifications as specified in the IEEE 802.16 standard.

b. Interoperability Testing

The vendor’s product needs to communicate with two other vendor products

These are then supplemented by what are known as ‘Plugfests’. Plugfests allow a vendor to check interoperability with other vendors. This would include base stations working with CPEs from different vendors and vice versa. There are different versions of WiMAX equipment in the market. In order to accommodate these different versions, different releases will be tested at different times. Also within the same release, there will be different waves of testing to accommodate different vendors. The important thing to note is that products certified in subsequent releases will be backward compatible with earlier release products.

1.7.3 WiMAX Forum View

Juniper Research spoke with Mo Shakouri, VP Marketing and Chief Spokesman of the WiMAX Forum

i. Fixed WiMAX

The Fixed/Nomadic market and the Mobile broadband market are two distinct markets. Fixed WiMAX will compete with DSL in developing markets, while Mobile WiMAX will see a larger market in developed countries. There will be an increase in the number of players in the WiMAX chipset market and we can expect announcements on that in the later part of the year. These are early stages for WiMAX chipsets. In 2006, WiMAX Forum is committed on


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making Fixed WiMAX successful commercially now that the first wave of certified products has been released.

ii. Mobile WiMAX

The release of the Mobile WiMAX standard is a major milestone in the adoption of WiMAX worldwide. The certification of products will begin in the second half of 2006. The Mobile WiMAX standard will operate in the 2.3-2.5 GHz spectrum. WiBro (802.16e profile) products on the other hand will be the first profiles to be released. The first step in the certification process is the identification of a testing lab. In Feb 2006, the WiMAX Forum announced that is had identified TTA (Telecommunications Technology Associations) IT Testing and certification lab in Seoul, South Korea as the first lab for Mobile WiMAX certifications. TTA labs is expected to become operational in Q4 2006 and the first certifications are expected in Q1 2007.

The 3GPP has adopted WiMAX Forum’s roadmap and now has OFDM incorporated in the roadmap. The data rates in 3G need to improve and there is a need to bring OFDM quickly into the marketplace through WiMAX. WiMAX will fulfil the gaps in 3G using an open network model. It will complement different technologies including 3G. The 3G operators are now looking at adding value added services like broadband to their portfolio. There is also a move by cell phone manufacturers for large screen devices, which support enhanced content. 3G operators are specifically looking at enhancing their coverage, leveraging voice and data, provide flexibility with WiFi connectivity and have mobile broadband services. WiMAX will enable 3G operators to do all of this.

In the matter of 2.5 GHz spectrum being opened up for WiMAX in Europe, the WiMAX Forum has got positive signals from the EU and the spectrum should open up sometime in 2006.


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2 Personal Broadband and 3G The market for Mobile WiMAX is based on the concept of personal broadband. Personal broadband and mobile broadband are concepts that are not new and 3G (third generation cellular telephone systems) mobile technology has been trying to market the concept for a few years but has not achieved its desired success yet. This chapter first covers the concept of Personal broadband and then looks at the need for mobility and our increasing digital lifestyles. Then we delve into the issues of 3G and how WiMAX could actually complement the technology and how 3G operators could benefit from WiMAX.

2.1 Personal Broadband The increase in connectivity is seen to be driving applications, user preferences and broadband demand, which in turn drives the demand for access. The demand for increased access is actually leading to bigger investments in the area of mobile and broadband networks, in turn making it cheaper and support higher bandwidths and ubiquitous connectivity. This completes a cycle of demand. This is the nature of broadband, and the way that broadband services will need to be differentiated in the future will be based on the concept of personal broadband. The Broadband Futures Wireless Group at MIT, which is a consortium of industry and academia, is focused on defining personal broadband2.

2 http://cfp.mit.edu


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Figure 2-1: The Future of Connectivity, Content, Consumption and Context

Source: BBWG, Communication Futures Program, MIT

Broadband is shifting from becoming a technology to becoming the base infrastructure on which services can be delivered. Thus the user can access applications and content from any location that he is located in. Thus connectivity will be defined in terms of a user accessing a specific type of content through a specific channel in a specific context. The content will not be limited to entertainment and information but will also contain communication. The above diagram shows that there are multiple technologies and connectivity mechanisms that will enable this scenario and each has an important part to play, including WiMAX.

Personal broadband in turn allows for service providers to focus on personalised services that the user can access at anytime and anyplace. Personalised broadband will allow the user to connect to a specific type of content within his context, with a device through a series of complimentary networks. This is the ideal scenario that would need to exist for personalised broadband.

The first step towards creating an ideal scenario of complimentary networks is to have the networks in place, which would support personalised broadband. Mobile WiMAX is a key to personal broadband and one of the most important characteristics is that it is compatible with the core network IP (Internet Protocol) standards of IMS (IP Multimedia System) and UMA (Unlicensed Mobile Access). This integrated IP network would be the backbone of a personal broadband network. This IP network backbone will support data and voice services, which form the context of personal broadband.


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Figure 2-2: Mobile WiMAX and Personal Broadband

Source: Motorola

There are a few characteristics that need to be highlighted about the market for personal broadband.

• It is different from the market of fixed wireless broadband and residential/office broadband access. The scenario of personal broadband fits in well with the fixed broadband scenario because they both complement each other. Fixed WiMAX is a last mile access technology as well as a compelling backhaul solution, while Mobile WiMAX is an anywhere, always accessible technology that the user can use while he is on the move. However, apart from being on the move, personal broadband also would allow the user to access the technology from his home/office where he is a fixed wireless user. Thus there is also a case for Mobile WiMAX competing with Fixed WiMAX. Therefore, Juniper Research believes that although Mobile WiMAX and Fixed WiMAX are meant to serve different markets, they will exist as complementary as well as competing solutions.

• The market for Mobile WiMAX is larger than the market for Fixed WiMAX because Mobile WiMAX is based on the individual and Fixed WiMAX is based on the household or office premises. Thus there is obviously larger number of people than households, which makes the market rather compelling.

2.2 The Need for Mobility The behaviour and user trends in relation to technology point to the fact that there is a growing need for having access to or the need for carrying around information, content and communication mediums wherever one goes. These trends are outlined below and describe how the end user is demanding mobility not just in the way he communicates but also in the way that he lives. This is an important trend to follow because Mobile WiMAX is one of the building blocks in allowing for personal broadband and empowering the user to have mobility.


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2.2.1 Shift from POTS to Cellular and Laptops Outselling Desktops

The two devices that are being increasingly used today include cellular phones and the laptop. The cell phone is becoming the primary medium for voice and data communication in our lives and is also taking the form of being an information portal through WAP enabled phones and mobile TV. The laptop is the primary medium for accessing data in today’s world and actually overtook the sales of desktops in 2005. Current Analysis reported that in May 2005, the sale of laptops was 53% of the total number of PCs sold and had surpassed desktop PCs. In terms of Cellular phones we have seen tremendous growth of the mobile subscriber base

Figure 2-3: Worldwide Fixed vs. Mobile Lines per 100 Inhabitants

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The above figure shows that worldwide mobile line density surpassed the worldwide fixed line density in 2001-2002. And mobile line density has been showing strong growth ever since while fixed line density is experiencing low growth. This is a strong indicator that in a sample population there are more mobile subscribers than fixed line subscribers. This is again due to the fact that in a household, each member could have a mobile phone, but there would only be the need for one or maximum two telephone lines in a house on average. Thus there is an increasing need for personalised services, which the mobile phone provides.

2.2.2 The Emergence of 3G and Mobile Content

Third generation mobile technology or 3G is the next generation to 2-2.5G technologies. It is the natural next step in mobile communications. 1G technology that was released in the 80’s supported analog telephony. Then in the 90’s we saw the emergence of 2G technologies, which moved from analog 1G to digital 2G. Both these technologies were focused on voice services. 2G improved the quality of voice services from 1G. However, 2G was not suitable for data although it could multiplex voice services and transfer multiple calls at the same time. 2G is able to support the most simplistic kind of data, which is SMS (Short message service).


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Figure 2-4: The Evolution of Mobile Applications

Source: ITU; UMTS Forum

The next step from 2G was 2.5G, which was introduced as a data compatible technology. These systems are able to support packet switching apart from the circuit switching in the core. Some of the technologies that are used in the 2,5G family include EDGE (Enhanced Data for Global Evolution) and CDMA2000 1x-RTT. The data rates provided in 2.5G are around 144 kbps. Thus we see a gradual shift from analog technology supporting voice, to digital technology for voice and then digital technology supporting data. Now 2.5G was meant to be a stepping-stone for 3G and improved data services. The reason for the emergence of 3G includes applications like mobile Internet, mobile gaming, mobile commerce, music download and mobile video applications like mobile TV, video calling over mobile. These applications can only be supported on a high bandwidth technology. The market for 3G did not take off due to a variety of reasons including high licensing costs and lack of killer applications.

Figure 2-5: The 3G Family of Technologies and Their Evolution Map

Source: UMTS Forum


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The key question here is how does 3G play a role in understanding the need for mobility. 3G has allowed for the ability of the user to be mobile and have his usual voice services and communication, but more importantly has given the user the opportunity to have access to a variety of services, which were mainly accessible from the home through a PC, TV or gaming console. 3G has allowed for all of these various applications to become portable and mobile. The results of a survey conducted in the UK in 2004 with regards to the popularity of mobile content applications are shown below.

Figure 2-6: The Popular Mobile Content Applications

46%

36%

23%20%

16%12% 11% 9%

Shar

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pict

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Source: Enpocket, UK

UK is a large 3G market and shows some of the most popular applications being used on 3G mobiles. Some of the applications that one can see the demand for in 3G are picture sharing, video calls, music downloads, video clips etc. The largest demand is for picture sharing because most mobile phones today come equipped with cameras, which allow for users to share pictures. Video calls and clips are next in terms of popularity, because the user is getting used to viewing clips and webcam chats on the Internet at home. The attractiveness of having the same applications ‘on the go’ makes them popular. Thus we see that 3G has in fact enabled the demand for broadband content ‘on the go’.

2.2.3 Video iPod Ignites Portable Video Revolution

One application that is crucial to driving demand for mobile broadband is video. There are a variety of applications that can be offered in video, which include video calling, video clips streaming, live mobile TV and video clip downloads. The focus on video clip downloads is an application that is extremely popular. The demand to watch videos on the go, has been ignited by the emergence of the video iPod. Apple has been very successful with its iPod device that it has been selling since 2001. The iPod was released primarily as a portable music player, which could play digital mp3 music. The fifth generation iPod, which was released in October 2005, has the capability of playing videos, which a user can download onto the device. Apple sold over 42 million iPods by December 2005. The last quarter of 2005, which includes holiday sales, saw around 14 million alone. The 63% jump in revenues in the last quarter was largely due to its video iPod that supports videos. Apple offers its video iPod users the chance to


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download videos over its iTunes service. Apple reported that users downloaded 8 million videos since it launched the service in October 2005. The large demand for videos is again due to the portability of video and the ability to watch music videos and favourite TV shows on a portable device. The popularity of video content, which is portable, has sparked a variety of content producers and providers to specifically make content for the Video iPod. Some of them include TiVoToGo, which allows for a user to download TV shows that one records over his PVR TiVo recorder. There are other content providers like MTV, ESPN, which creates 15 minute specials for football games and TV channels like Disney and NBC that have joined in the portable video content revolution.

The reason that the Video iPod is so important as a trend is because it has sparked off a revolution in portable video content. Before the Video iPod users were not very comfortable with portable video and the idea of carrying video files and watching them ‘on-the-go’. This is primarily because of two reasons, the hardware provided by Apple and the content made available through Apple iTunes. Nevertheless it has sparked a revolution for portable video and the coming years will see many imitations of the device and multiple content sources, which will provide content specifically for portability. Mobile WiMAX will be able to take advantage of this increased demand by adding value to portable video content. Mobile WiMAX will actually provide the user the opportunity to download the content or stream content on the go. The increasing demand of portable video and large content choices linked with high-speed broadband connectivity on a WiMAX standard based, cost- effective device and service will be the ultimate solution for portable video.

2.2.4 Mobile Access to Desktop PC Content

Windows Media PC is a revolution in terms of bringing all of the content in your home, whether it is movies, music, DVDs, photos all into your PC. It allows you to access the content from anywhere in the home either from a TV or PC or a laptop. Windows Media Centre PC allows for mobile phones to access content that is stored at the PC in the home. This is a landmark move in terms of technology being able to allow for a user to access his personal content, which could include anything from his favourite music playlists, photos and even DVD movies to be accessed from his mobile phone. This was shown at the CES in 2005 using an AudioVox SMT5600 Smart Phone to remotely configure and display Home or Office PC using the wireless Internet. This means that a user has complete access to his information that is stored at his home. This is the ultimate mobility experience, because not only does the user have access to the Internet through wireless WiFi, but also can connect to his PC at home at check out his personal content. This is a significant step in personal broadband and gives a whole new meaning to broadband because the user is using the Internet for accessing personal information. Thus the user is not constrained anymore and is completely mobile. The user cannot only access his own content but due to the revolution of IPTV, he can also view clips and set recording schedules for programmes through his mobile phone.


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Figure 2-7: Orb Service on a PDA Accessing TV on the Desktop

Source: Orb Networks

Apart from Microsoft Media Center, there are services like Orb www.orb.com that allow you to connect to any PC that runs Windows XP or Windows Media Center through a mobile phone or portable device. Orb is a software that sits on the desktop and allows for access to photos, audio, video which is located on the desktop. Orb also allows a user with a mobile phone, laptop or a PDA to stream live content from his desktop as well as view and record programs over his PVR using his mobile phone. This is similar to the Microsoft demonstration that was made at CES. These services point to the fact that there is a definite demand for accessing the desktop PC from a mobile or portable device that has access to the Internet.

2.3 3G Issues Now that we have seen the demand for mobility, we will look at the reasons why 3G has been unable to take advantage of this demand. This is linked to the emergence of Mobile WiMAX. The issues have suppressed demand for mobile broadband and due to the multiple technologies that exist within 3G itself, there has been a divided instead of a concentrated effort to promote mobile broadband.

2.3.1 Cost Issues with 3G

The 3G family of technologies have been plagued with high costs. There are different reasons why 3G has been cost prohibitive while delivering high speed mobile broadband. Before exploring the cost per bit and comparing it with WiMAX, we need to understand the other aspects of 3G costs.


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i. High Costs of 3G Licenses

When 3G was introduced in 2001, there was a lot of hype in terms of the technology and there was a very high interest in operators to switch from their voice networks to high speed mobile networks. At that time, there were many countries that auctioned the spectrum and licenses for 3G and most of the operators ended up spending billions of dollars in acquiring those licenses. The demand for 3G did not pick up as expected and this caused a lot of operators especially in Europe having to see large losses due to their huge investments in 3G licenses.

Figure 2-8: Cost of 3G Spectrum per Population

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Source: UMTS World; Qualcomm; Strategy Consultants

The above figure shows that the maximum cost that was borne in terms of cost per subscriber was in the UK and Germany. These costs were prohibitive in terms of capex, which was one of the reasons why we have seen lower number of operators acquiring 3G licenses.

ii. High Costs of 3G Intellectual Property Rights (IPR)

The technologies that fall under the 3G family are controlled by patents that are owned by individual companies. This gives rise to high costs associated with the IPR on which the 3G technologies are based. The high IPR costs are related to the costs of equipment and costs of providing 3G service. Companies like Qualcomm are licensing their patents and earning royalties at a higher price than their counterparts, which leads to the fear that these prices might increase further in the future. This is more in relation to ‘essential IPRs’ that are held by vendors. There have been accusations by vendors like Nokia that Qualcomm does not hold enough ‘essential IPR’ patents than they claim and has led them to increase their royalty limits.


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Figure 2-9: Companies Owning 3G IPR

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In case Motorola, Nokia and Ericsson all increase their royalty limits to match Qualcomm’s this would lead to prohibitive costs for 3G mobile devices. This has led the GSM Association to gather support from the industry to limit these royalty limits to single digit numbers. There is a fear that increasing royalties will be disadvantageous to second tier vendors who do not own IPRs and need to license it from the big vendors. This could lead to the smaller OEMs withdrawing leading to the market not being able to have a healthy ecosystem.

2.3.2 Costs per bit: 3G vs Mobile WiMAX

The most important distinction between 3G and Mobile WiMAX is that of the costs per bit that are incurred in terms of capex for transmitting a certain amount of information. This includes the costs of transmitting data from the core of the network to the end user through the backhaul and access network. This is a good indicator for operators who are willing to install Mobile WiMAX equipment, of the difference between a loosely coupled, high IPR based, 3G family of standards and an open, low cost, standard body controlled WiMAX standard. The increasing need to access the Internet while being mobile and away from home has been already shown in the previous section. This demand when coupled with costs brings out the reason why WiMAX is a technology that needs to be taken seriously and how it could be a threat as well as a complimentary solution for 3G operators.


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Figure 2-10: 3G vs. WiFi costs for Data Access

$0.01

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Browse Webpage

Google Search

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Exchange synch

Source: i2 Partners; AT&T Wireless; T-Mobile; Business Communications Review

The above figure shows that the cost of delivering data in the case of streaming video is almost 10 times more in the case of 3G roaming and around 5 times more in the case of non-roam, when compared to a standards based WiFi Internet network. This gives a good idea as to the cost difference in transmitting a bit of data for 3G and WiMAX because WiFi and WiMAX are almost similar in terms of being open standard technologies and both back certified equipment. The other important point to be noticed is that a simple Google search, which is the lowest end of the services in terms of data, is significantly costlier for 3G technologies GPRS as compared to WiFi. The higher the costs of data transmission, the higher the stress on the operator margins. This is very important for operators that are looking at minimising the ROI and leveraging the most from their data services.

As the generations of 3G technologies improve, we see that the costs for transmitting data go down. This is evident from the later generations of the 3G family like EDGE and WCDMA. The figure below shows that these future enhancements have lower costs in terms of costs per bit.


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Figure 2-11: Costs per bit for Wireless Data Technologies

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WCDMA WiMAX Wires

Source: Motorola

The figure also shows that although the 3G technologies have improved in terms of costs per bit, they are still 3-10 times more expensive than WiMAX. This is one of the main strengths of WiMAX when compared to 3G and with the increasing need of data intensive applications and personalised mobile broadband we will see this cost being a very important metric to measure the economic feasibility of a wireless technology in terms of data transfer.


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3 Market for Mobile WiMAX The market for Mobile WiMAX is based on the fact that there is an increasing demand for personal mobile broadband and that 3G technologies have been unable to control the costs related with delivering high bandwidth applications. The earlier chapter establishes the need for Mobile WiMAX. This section will be dedicated to understanding the market forces that are driving the demand and are acting as suppressants for the same demand. The various aspects of market, including the demographics, regions and services will also be covered in order to gain some clarity in terms of which segments of the market are suitable to drive adoption of Mobile WiMAX. The chapter will also cover WiBro (Wireless Broadband), which is the Korean profile of WiMAX that will be launched in 2006. Finally, Mobile WiMAX vendors and forecasts will be laid out.

3.1 Demand Drivers

3.1.1 Mobile WiMAX Standard Ratified: Certification Process Initiated

The biggest driver for Mobile WiMAX is that the standard was approved in December 2005, which is a crucial breakthrough. The Mobile WiMAX standard was officially released as the IEEE 802.16e-2005 standard. This is the first step towards making sure that vendors get their equipment ready for certification and finally released into the market as ‘WiMAX certified’. The first step in the certification process is the identification of a testing lab. In Feb 2006, the WiMAX Forum announced that it had identified TTA Labs in South Korea, which will begin operation in Q4 2006 and is expected to release certified products in Q1 2007.


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Table 3-1: 802.16e-2005 Product Timelines

Standard Complete Done

Technology/Silicon samples Doing

Vendor Integration testing Q3 2006

Lab trials Q4 2006

Certification Lab Opens Q4 2006

Commercial trials/deployment Q1 2007

Source: Intel

The above table shows that 2006 will be an important year for Mobile WiMAX with regards to lab trials, certification lab opening and integration testing for vendors. This would lead into 2007, when commercial trials would start. Thus we see that the process has been initiated and that this will drive demand for Mobile WiMAX as the date draws near for the first certified Mobile WiMAX equipment.

3.1.2 CPE: Reduction in Costs and Size

i. Intel: Moving from Fixed WiMAX towards Mobile WiMAX

Juniper Research spoke with Gordon Graylish, Director, Communications Business Organisation, EMEA for Intel

In terms of the CPE (Customer Premise Equipment) costs and size we see that Mobile WiMAX will be driving the costs and size of the CPE down. This is evident from the strategy and roadmap from Intel that is backing WiMAX and is one of the primary vendors for WiMAX CPEs. The first generation of CPEs are already out and support the 802.16-2004 Fixed WiMAX standard. The next two generations of Intel will feature the 802.16e standard and a multiband radio. The devices that will be covered in the second generation will include laptop cards, CMTs and Standalone devices. The third generation will include phones that will have integrated support for Mobile WiMAX apart from WiFi support.


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Figure 3-1: Mobile WiMAX CPE Roadmap

Source: Intel

Thus we see that the costs as well as size is reducing while integration is increasing for Mobile WiMAX CPEs, which is an essential component of the business model for a WiMAX operator. This is key driver for Mobile WiMAX market.

3.1.3 3G Vendors Treating Mobile WiMAX as Complimentary

There is a realisation from some big 3G vendors that Mobile WiMAX will be able to compliment their networks. The three of the biggest 3G vendors that have announced a complimentary strategy for WiMAX are Nokia, Nortel and Motorola. Nokia is going to support HSPA and WiMAX in a complimentary manner. They believe that HSPA would provide wide area coverage at vehicular speeds and seamless handovers, I-HSPA would provide large cells with high data consumption, lower mobility and lower costs, while Mobile WiMAX will provide for hotzone coverage at high bit rates.


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Figure 3-2: Nokia Strategy for WiMAX and HSPA

Source: Nokia

Nokia believes in providing base stations that would be able to support WCDMA, HSPA, I-HSPA and WiMAX on a single site. This family of base stations is known as Ultrasite BTS.

Figure 3-3: Nokia Ultrasite BTS

Source: Nokia

Nortel owns patents in the area of MIMO (Multiple Input Multiple Output) and OFDM (Orthogonal Frequency Division Multiplexing) and has an extensive portfolio in HSDPA (High Speed Downlink Packet Access), UMTS (Universal Mobile Telecommunications System) and EVDO (Evolution Data-Only) solutions. It believes that WiMAX and 3G will be complimentary. Motorola also believes that when Mobile WiMAX is released in 2007, there could be complimentary plays of WiMAX. The support of the largest 3G vendors for the complimentary play of Mobile WiMAX is going to be a significant driver especially for the 3G operators to install WiMAX in their networks.


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3.1.4 WiBro Adoption Starting with Korea

WiBro is a profile of Mobile WiMAX and is scheduled to be rolled out in 2006. The minimum download speeds for WiBro include 512 kbps minimum download and 128 kbps minimum upload. Samsung, which is one of the main vendors supporting WiBro, has shown 4 Mbps in the download and 2 Mbps in the upload during trials. Korean operators SK Telecom and KT are amongst the first operators planning on launching WiBro in South Korea. Samsung launched the first WiBro handset at the Consumer Electronics Show (CES) in January 2006. This mobile handset, known as the M8000 supports a variety of applications like broadcasting, home networking, video conferencing, video-on-demand, mobile navigation and push to talk. It also has a QWERTY keyboard.

Figure 3-4: Samsung M8000 WiBro Phone

Source: Samsung

The WiBro service has also been trialled outside Korea. It is planned on being used at the Winter Olympics in Italy in 2006 in coordination with Telecom Italia. Sprint in the US is also trialling WiBro in the US in the 2.5 Ghz spectrum that it owns. WiBro is going to be a significant technology with respect to Mobile WiMAX and would help in educating not only consumers but also vendors and operators about the advantages of Mobile WiMAX. Thus the early adoption of WiBro is a significant driver for the later to come 802.16e-2005 Mobile WiMAX.

3.1.5 Widening Gap Between Mobile Bandwidth Demand Usage and ARPU

There is a wide gap between the current bandwidth demand in mobile networks due to the increasing data usage and high bandwidth applications like video streaming and MMS. The forecast for bandwidth demand in mobile networks is supposed to increase drastically 2005 onwards, but the Average Revenue per User (ARPU) forecasts are much lower than that. This is primarily because of flat rate pricing models being followed by operators worldwide for their data networks. Thus we require a technology that is able to fill that gap and allow the


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operators to maximise their returns by choosing a technology that is cost effective in data transmission. Thus Mobile WiMAX and its low cost per bit will be able to drive operators to demand for the technology in order to improve their business models.

Figure 3-5: Mobile Bandwidth Demand and ARPU

Source: Motorola

3.1.6 Low Cellular Penetration in Developing Countries

The cellular subscriber penetration in developing countries is lower compared to the developed countries. This provides a large opportunity for growth for Mobile WiMAX services in the developing regions. These regions can take advantage of the ‘leapfrog’ effect and benefit from high-bandwidth, low cost standardised equipment, supporting network in Mobile WiMAX and bypass 3G technologies.

3.2 Demand Suppressants

3.2.1 Delays in the Mobile WiMAX Certification Process

The delays in the Mobile WiMAX certification process will lead to competitive technologies like 3G, Flash OFDM and UMTS-TDD taking advantage of the market and gaining a stronghold. WiMAX is supposed to have certified equipment for 802.16e-2005 by 1Q 2007, which in itself presents a large window of opportunity for competing technologies. However, there are some vendors that already have pre-Mobile WiMAX or Mobile WiMAX style equipment in the market that provides almost similar characteristics as Mobile WiMAX. This helps in capturing the market that is willing to go the standardised Mobile WiMAX way rather than with the other competing technologies. The delays in certification will however cause operators to get impatient with the technology and might convince a few operators to skip WiMAX completely.


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There are some operators that are taking a cautious approach because they feel that WiMAX has to prove itself in its fixed version and that they will wait until a few months or even a year after Mobile WiMAX comes out before they consider using WiMAX equipment. The WiMAX certification process builds confidence in the operators that are using equipment because they know that they can have equipment that is interoperable and thus be flexible in terms of their infrastructure.

3.2.2 Frequency Availability

There is a larger issue, which is key to the spread and adoption of Mobile WiMAX. This is the issue of regulators allowing for spectrum availability of Mobile WiMAX. The key spectrum that is needed for the operation of Mobile WiMAX is the 2.3-2.5 GHz spectrum. This would be the spectrum in which the first profiles would be operating. In the US, Sprint and Clearwire own the spectrum for 2.5 GHz and thus the other operators do not have a chance to operate Mobile WiMAX. Unless the FCC clears more spectrum in that range, it would be disadvantageous for the operators and for the demand of Mobile WiMAX. In Europe, the 2.5 GHz spectrum is reserved for 3G technologies and is not open for use of WiMAX. This again is a disadvantage for operators in Europe who would like to launch Mobile WiMAX services in Europe. Thus spectrum availability is a very big issue in the two biggest markets for Mobile WiMAX and unless the WiMAX Forum sorts this issue, it will be a major demand suppressant.

3.3 Market Characteristics In order to understand the market characteristics of Mobile WiMAX we need to look at the market for 3G services. The earlier sections explained that Mobile WiMAX will be based upon the demand for personal broadband services and there are trends in the user behaviour that are pointing towards a high demand for Mobile WiMAX services. The market characteristics will give a better understanding of the kind of demographics, regions, typical users and services that could be offered. In terms of demographics we try and dissect the rural vs urban market case for Mobile WiMAX. In terms of regions, we will see whether WiMAX has an equal appeal in both developed and developing regions. The mobile broadband nature of the technology allows Mobile WiMAX to be seen as a technology that will be adopted in applications other than typical cellular services. Mobile WiMAX will be examined in terms of providing services for mobile workers, delivery services, fleet services and emergency services. We will study each of these areas individually and compare it to the existing technologies used in the particular domains. Finally we look at the question of voice and data services over Mobile WiMAX and especially in the voice case we will use the example of WiFi and UMA (Universal Mobile Alliance) to predict how voice of WiMAX will develop.

3.3.1 Demographics: Larger Urban Demand, Limited Rural Demand

According to the WiMAX Forum demographics have been divided into the following segments:

1. Metro markets or urban areas with a high density of population and usually consists of high-rise residential and office buildings.


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2. Suburban areas which consist mainly of residential homes, business parks and malls and have Moderate Scenario density of population

3. Exurban areas are defined as upscale residential neighbourhoods with Moderate Scenario to low density of population. They usually have fewer business customers

4. Rural areas have a low density of population and mainly consist of residential and very few businesses.

For the purposes of this report and for simplicity we will consider only two types of demographics, urban and rural. When speaking of urban markets in this report, we will consider metro and suburban markets according to the WiMAX Forum definition. Similarly in this report rural markets stand for both exurban and rural markets according the WiMAX Forum definitions.

Figure 3-6: Forecasts for Mobile Data Traffic Demand

Source: Analysis; Mason 2005

The best way to understand the distinction in the demand for Mobile WiMAX in the rural and urban markets is to look at how the demand for 3G services is going to look like in the coming years. The demand for 3G services is tied to the demand for data. Figure 3-6 shows two scenarios for the demand for data services, high traffic and low traffic for both urban and rural areas. The low traffic demand is a steady and slow growth view of the market for data services. The high traffic demand assumes an explosive growth and almost 100 fold increase in data services. In both high traffic and low traffic cases we see that the urban demand is almost 10 times that of the rural demand.

The user devices that would work on Mobile WiMAX will not be limited to the mobile phone or even the laptop and would include devices like PDA’s, portable gaming devices and even mp3 players. The current portable mobile gaming devices like the Sony PSP or the Nintendo Gameboy could be enhanced with wireless Internet connection to enable online multiplayer gaming. There can also be a value enhancement in the current iPod MP3 player, which has also started to supported video. If these devices start connecting to wireless networks with the aid


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of WiMAX, they could enable live download, streaming of music and video and would require lower memory as the need to store data on the device becomes unnecessary. The demand of these devices exists largely in the urban areas where there is a large population of youth that demand connectivity to their portable devices like game players and music devices. A good proof that the market for these devices exists in urban areas is the marketing campaign by Sony PSP, which was targeted at ‘Urban Nomads’ who crave for new technology and would like to carry their music, movies, games with them wherever they go.

Using this as the basis of the argument and the fact that Mobile WiMAX is geared towards catering to high bandwidth demand, we can say that urban markets will be more promising for Mobile WiMAX than rural markets.

3.3.2 User Cases

i. Mobile Workers

There are many professions, which require the employee to work from outside the office and be on the move. These workers need mobility solutions that can connect them to their desktops at work and to have mobile access to information. Mobile Workers were initially a small part of the workforce but they are increasingly becoming important for corporate departments as they are striving to increase workforce productivity. The typical mobile worker accesses email from his laptop, PDA (Personal Digital Assistant), blackberry device, connects to Virtual Private Networks (VPNs) from home or client sites and all this is becoming possible with the improvements in connectivity and technology. IDC expects the mobile worker population to reach 162 million worldwide by end of 2006 and close to 900 million by the end of 2009. According to a survey conducted by the BPM Forum and Avaya in 2005 saw 71% of the executives believing that the number of mobile workers will increase in the next few years.

Figure 3-7: Survey of Mobile Executives in W. Europe on Mobile Phone Usage

Source: Strategy Analytics


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Another survey conducted by Strategy Analysts on executives in Western Europe shows that

• More than 1/3rd of the executives use their mobile phone at office

• Business users are more likely to carry a mobile phone than a laptop when away from desk

• Half of them are interested in wireless email with the ability to handle attachments

The market for the mobile worker is very promising and Mobile WiMAX is very well placed to take advantage of the high-speed connectivity, QoS and security features that are needed for a mobile worker service.

ii. Delivery Services and Fleet Management

The need for mobility in the workplace is not constrained to the mobile corporate worker. It is also needed by delivery services that can fall into different categories. The most important category in delivery services is that of express parcel delivery services like DHL, Fedex, TNT etc. These services require mobile connectivity to improve tracking and efficient delivery of services. There are solutions that use wireless carriers operating EVDO or GPRS networks. The terminals provided to the drivers have Wireless LAN and WAN functionalities. With the help of connected portable devices, express delivery companies can

• Instantly have access to delivery details and time once the package has been delivered to the recipient. This information is useful for both internal usage and customers.

• Drivers are able to transmit signatures from their mobile device to the central office using mobile connectivity

• Efficient scheduling of pick-up services and allows real-time information to be transmitted to the central office once the package has been picked up

• Navigational maps and directions can be transmitted to the drivers over the wireless network to replace two-way radios

The advantages that are discussed above are similar for fleet management services. Fleet management includes managing the transport network and logistics of a fleet of trucks or service vehicles that are used to deliver and pick up goods. The attributes of fleet management and parcel delivery are almost the same. Although the advantages of having mobile connectivity for both fleet management and express delivery are clear the costs at present are an issue. The costs that are incurred from using a 2.5G-3G service are higher than what it would cost using a Mobile WiMAX service because of the savings in the cost per bit and the cost of equipment. Once the costs of mobile connectivity reduce, there would be many more fleet carriers and express delivery services that could use these solutions to increase responsiveness and save on internal operational costs.

There are many other usage scenarios that could use mobile connectivity and include

• municipal emergency services like ambulance and fire,

• city transport services like buses and taxis


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• airport cargo loading and unloading,

• healthcare solutions like mobile physicians, hospital/nurse monitoring, remote patient monitoring,

• manufacturing services like warehouse management and quality management

• retail solutions like inventory management, mobile store manager etc.

3.3.3 Regions: Both Developed and Developing

Compared to Fixed WiMAX, Mobile WiMAX has captured the interest of a larger group of operators in the developed regions like the US and Western Europe. This is because Mobile WiMAX can serve the needs to Fixed Line operators as well as Mobile operators. In the developed world, there are many cellular operators that are interested in the capabilities of Mobile WiMAX because:

• Many have large 3G investments, especially in Europe and are planning to rollout or have already rolled out 3G services and are looking at WiMAX in terms of complimenting their 3G networks and expanding their range of services from cellular to broadband Internet

• There are second tier mobile operators in the developed world that find 3G investments too high and would like to use Mobile WiMAX as a competitor to 3G and help them capture market share from the tier 1 operators who are already heavily invested in 3G.

There are some Fixed Line operators that are interested in Mobile WiMAX and are watching it closely but they would be cautious in competing with the cellular operators by offering a competitive service.

With regards to the developing world, there is an equally large interest from operators, more in terms of Mobile Operators both tier 1 and tier 2 that are trying to ‘leapfrog’ the developed world by adopting Mobile WiMAX and avoiding the costs that are associated with 3G spectrum and 3G equipment. This would allow them to completely bypass 3G and avail the benefit of a faster and more spectrally efficient technology. Again, they can avail the advantage of Mobile WiMAX serving fixed/nomadic broadband connections and give them the opportunity to have an additional revenue driver.

3.3.4 Services: Voice and Data

Mobile WiMAX can support both voice as well as data services. But the important question is which service will be more in demand and what will earn the operator larger revenues. The answer to this can be found from the increasing data component in the ARPUs being reported by 2.5G and 3G cellular operators. Mobile WiMAX is the closest to 3G in terms of services and the behaviour of subscribers on a 3G network will be almost similar to their behaviour on a Mobile WiMAX network.

The figure overleaf shows that the voice ARPU has been steadily declining for European operators and the data revenues have been increasing. The European operators are a good case study for Mobile WiMAX because there is a large percentage that operate 3G networks.


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This gives a good idea about the popularity of data vs voice for 3G. Although voice makes a very large component of the revenue, this component is reducing primarily because there are multiple segments within data that add to the revenue, while there is only a single segment in voice. The interesting thing to note is also that event/data carriage revenue is the highest segment amongst data, which includes SMS. With Mobile WiMAX networks, this might change to Internet access, M-Commerce and advertising ARPU.

Figure 3-8: European Mobile vs Data ARPU

Source: University of Pretoria etd – Benn, L J (2005); Siemens

When speaking of voice over WiMAX, we are specifically looking at an IP based voice service. This means that it will be similar to VoIP but will be able to be transmitted without a tethered connection. The most immediate comparison that comes to mind is that of Voice over WiFi, or VoWiFi. There is an ongoing effort to have WiFi networks act as complements to GSM (Global System for Mobile Communication) networks. This is being led by Unlicensed Mobile Access (UMA) technology that would allow a user to use both a GSM network as well as a WiFi network to make a voice call as well as use data services that are offered on a typical GSM/GPRS network. Although there is a data component to UMA, voice service gains prominence over data with the ability to perform handoff between a cellular and WLAN network.

The figure overleaf shows how a user can access his mobile services from two networks. In the UMA case, the core Mobile network is still the same and operates in the circuit switched GSM fashion. There is another implementation called an SIP implementation that would allow for cellular network calls to be routed completely through an IP network, which would bring massive cost savings in the core infrastructure. There is a huge drive from 3G operators to switch to SIP based networks. The advantage that Mobile WiMAX would have is that it would be built from the ground up with an IP based core network which would allow it to take advantage of an SIP implementation and would allow for significant interoperability between 3G and WiMAX networks.


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Figure 3-9: UMA Network

Source: UMA

3.4 802.16e Silicon Startup Market View Now that we have looked at the demand drivers and demand suppressants of the technology as well as the market characteristics of the demand market, we can look at how the same market is progressing from the supply point of view. This view is not of large silicon vendors like Intel and Fujitsu who are already active in the market, but is the view of a silicon startup in the Mobile WiMAX space. Beceem Communications is a Mobile WiMAX silicon startup vendor that is competing with the large players and is making an entry because it believes in a healthy and large market for Mobile WiMAX

3.4.1 Beceem Communications

Juniper Research spoke with Lars Johnsonn, Vice President of Business Development at Beceem Communications and Aditya Agarwal, Director of Marketing at Beceem as well as Chair of the WiMAX certification group at the WiMAX Forum.

• Beceem is a silicon vendor that is focusing on Mobile WiMAX solutions. It was founded in 2002 and was acquired by Samsung in December 2005. Beceem believes that Mobile WiMAX, 802.16e brings a lot more to the customer, which is partially understood by the industry but has been understood better by the operators. The


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Mobile WiMAX market is in the early stages and so Beceem is playing the role of educating the operator.

• From Beceem’s point of view, the operators do not want a migration scheme from Fixed to Mobile WiMAX. They would rather go to Mobile WiMAX. The first set of certifications of the Fixed WiMAX products has been limited to base stations and only includes a reference design instead of a working chipset solution like Intel.

• 802.16e will have a smoother certification process than 802.16d because there have been lessons that have been learnt in the process of Fixed WiMAX certification, which will not be repeated. The Plugfests for Mobile WiMAX are scheduled to begin in around the summer of 2006.

• The 16e standard has been finalised and the changes that are taking place are a usual part of any standard and are revisions of the standard In a given 10 MHz of spectrum capacity, 802.16e will be able to support her number of bits, which means more users.

• There are different business models in which Mobile WiMAX could operate

a. Wireline operators getting into the cellular business are potential adopters for WiMAX.

b. Mobile Operators that are trying to gain market share from the leaders will use WiMAX.

• The markets for Beceem are Korea at the moment where it is being used on WiBro networks. WiBro is the same technology as 802.16e, only it operates on 8.75 MHz of bandwidth. 16e operates on 10 MHz of bandwidth. It will trial some of its solutions in India during 2006. The US might see some deployments in 2H of 2006 with pre-WiMAX. India will see a larger market for Fixed use of Mobile WiMAX. China on the other hand might see a bit more of Mobile use than India. The use of Mobile WiMAX for mobile or fixed services will depend on the operators.

• Beceem mentioned that there is an interest from operators and OEMs in prototyping solutions that can accommodate a form factor that is suitable for fixed applications apart from mobile applications. There is also interest in dual mode CPEs from the operators. Dual Mode CPEs would work with WiMAX and 2G rather than WiMAX and 3G


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4 Mobile WiMAX: Equipment Vendors This chapter focuses on the equipment vendors that are active in the area of Mobile WiMAX. The vendors do not have certified Mobile WiMAX equipment yet because the certification process for Mobile WiMAX is yet to commence. It is planned in the 2H of 2006. The vendors that have been featured either have pre-Mobile WiMAX equipment or equipment that is based on the ratified Mobile WiMAX standard. These vendors have a larger focus on Mobile WiMAX than on Fixed WiMAX and believe in a larger market opportunity with Mobile WiMAX compared to Fixed WiMAX.

4.1 Equipment Vendors

4.1.1 Navini Networks

Juniper Research spoke with Sai Subramaniam, VP, Product Management and Strategic Marketing

i. The Company

Navini Networks was founded in 2000 by Wu Fu Chen and Dr Guanghan Xu. Navini Networks is a broadband wireless access equipment provider. Its focus is on Mobile WiMAX and its pre-WiMAX solutions are deployed in over 6 continents with over 30 commercial networks. Navini is a principal member of the WiMAX Forum and the IEEE 802.163 committee. Navini has its headquarters in Richardson, Texas and has over 130 employees. It has secured around US$ 115m in funding and some of its investors include Lehman Brothers Venture Partners, Austin Ventures, Sequoia Capital, Intel Capital, Alcatel Ventures and Silicon Valley Bank.


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ii. Products

Navini’s products in the WiMAX area include self-install plug and play CPEs and base stations that are included in the RipWave family of products. The RipWave base stations are simple plug and play solutions that can be installed with ease at the cell site with ease due to its small form factor. The base station solution is available in indoor and outdoor versions. Some of its primary features include over the air upgrades, multi service queuing for voice and data, per-user bandwidth control, and seamless integration with IP backbone. Its highlight includes the use of Navini’s patented adapted beamforming technology that gives it a 64 times power advantage compared to other vendor products. In terms of performance, 1 cell site using Navini equipment supports 600-900 users, 2 Mbps in the downlink and 3 Mbps in the uplink and has a 3 km radius on average. The base stations provide PCS like coverage.

The RipWave modem is an indoor, self-install easy to use solution. It is a mobile battery powerd solution that is portable and mobile. It has USB and Ethernet port options and can do over the air upgrades. It operates in the 2.5 GHz and 3.5 GHz ranges.

Navini has also announced its Ripwave MX line of products including base stations, CPEs and PCMCIA cards that are dual mode, which allows the user to switch between the pre-WiMAX mode and the 802.16e mode. These solutions are software upgradeable to the ratified 802.16e standard. These should be available in 2006.

Navini also has a RipWave Network Management system that is able to configure and manage RipWave products within a network.

iii. WiMAX Strategy

Navini is specifically focusing on Mobile WiMAX and is passing over the Fixed WiMAX standard. Navini believes that personal broadband is the market to target. Its products provide stationary personal broadband at DSL/cable speeds, leverage the strength of wireless and makes economic sense.

Navini has a powerful strategy with their RipWave MX solutions that allow future proof solutions for their customers who do not have to worry about their solutions being upgradeable to Mobile WiMAX. Their CPE (Customer Premise Equipment) solutions are simple, easy to use, zero install solutions that can be purchased off the shelf. Navini believes that the CPE costs for Mobile WiMAX will be closer to cell phone CPE costs once the solution is embedded in laptops.

iv. Customers

One of the biggest customers of Navini is Unwired, which is the largest wireless operator in Australia and has around 70 cell sites operating under Navini equipment. It uses Navini’s plug and play, self-install equipment that a customer can buy at any retail shop. PC cards can also be bought at a premium price. 60% of the customers are retail customers and 70-80% of the customers have access to DSL.

Some of its other customers on its pre-WiMAX solution are QMax in Singapore, Xanadoo in the US and Irish Broadband in Ireland. It has also trialled its solutions with BT in the UK.


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4.1.2 Nortel Networks

Juniper Research spoke with Bruce Gustafson, Vice President, Marketing for WiMAX and Mesh Networks

i. The Company

Nortel Networks is a one the worlds leading telecommunications equipment providers and has a large focus on wireless solutions. Nortel has equipment installed with over 300 wireless operators in 50 countries. It has networks operating in GSM/GPRS/EDGE, CDMA 2000 1x, CDMA 2000 1x-EVDO (Evolution data Only Standard that has evolved from cdma2000 IX), UMTS (Universal Mobile Telecommunications System) and WLAN (Wireless Local Area Network) systems. It is an end to end solutions provider and thus its equipments cover the access as well as the core network. Nortel is a leader in OFDM (Orthogonal Frequency Division Multiplexing) and MIMO Multiple Input Multiple Output) technology in terms of research and development and owns patent rights relating to the technologies. Nortel has made many contributions to the 802.16 standards and is a member of the WiMAX Forum. Nortel is a publicly listed company and is traded on the NYSE with the NT symbol.

ii. Products

Nortel and LG announced that they would jointly market and develop WiMAX 802.16e products. It is also partnering with Intel and Airspan to produce both Fixed and Mobile WiMAX products.

iii. WiMAX Strategy

Nortel also has an extensive portfolio in HSDPA (High Speed Downlink Packet Access), UMTS and EVDO solutions and would like to use their expertise in advanced wireless technologies and apply the same to their WiMAX portfolio. It believes that WiFi mesh, 3G and WiMAX will co-exist. WiMAX focuses on bandwidth and data and is suitable where performance requirements are greater than 1 Mbps in the wireless scenario. WiMAX does not provide border-to-border coverage like 3G and is not ‘always on’ like 3G. WiFi on the other hand is a short distance technology. Thus Nortel sees that WiMAX is a complimentary solution to 3G and WiFi. In a trial in Japan Nortel demonstrated seamless handover between 802.16e, WiFi and HSDPA. Nortel‘s strategy is focused more towards Mobile WiMAX although it does have a Fixed WiMAX portfolio.

iv. Customers

Nortel has not yet announced customers for its Mobile WiMAX products. One of the customers of Nortel’s Fixed WiMAX products is the Alberta Special Areas Board (SAB) in Canada.


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4.1.3 Motorola

Juniper Research spoke with Andy McKinnon, Principal EMEA, WiMAX Business Development

i. The Company

Motorola is a communications provider and has products covering solutions for mobility, broadband, embedded systems and wireless networks. It has a large broadband wireless portfolio of products and joined the WiMAX Forum in 2004 to extend their expertise in their broadband wireless space to WiMAX and participate in the development of the WiMAX standards. Its broadband wireless product has been deployed in more than 100 countries Motorola is a publicly listed company and is traded under the symbol MOT. Motorola had US$ 36.8bn worth of sales in 2005. Its headquarters are based in Schaumburg, Illinois, USA.

ii. WiMAX Products

Motorola has been successful in developing and marketing its Canopy range of products that consist of point to point backhaul modules, point to multipoint access and subscriber and cluster management products. The Canopy platform provides ease of use and installation, cost effectiveness and is able to support high speed Internet applications like VoIP (Voice over IP), video, security surveillance using a carrier grade network.

In June 2005, Motorola announced that they were introducing the MotoWi4 range of products, which covers Canopy, WiMAX and WiFi mesh solutions. The MotoWi4 WiMAX solutions consist of the MotoWi4 UltraLite Access Point that has been designed for the 3.5 GHz frequency range. Although it is used for fixed applications it will have compatibility for the Mobile WiMAX standard. It also has a backhaul product that provides speeds ranging from 10 Mbps to 300 Mbps used for backhauling HSDPA and EVDO cell towers. The MotoWi4 WiMAX products support Mobile VPN as well as fixed applications like last mile access for voice and data. Apart from access points and backhaul solutions the MotoWi4 solutions will also have CPE devices.

iii. WiMAX Strategy

Its products have a focus on seamless mobility and they believe that broadband should be portable and thus are backing the Mobile WiMAX standard. There have been trials that have proved that indoor seamless mobility works with their current proprietary Wi4 solution. Motorola believes that Mobile WiMAX will be able to support both fixed and portable applications. Motorola plans to transition their MotoWi4 solution into Mobile WiMAX towards 2007. It believes that the 802.16-2004 Fixed WiMAX solution is only an interim step and that the market is actually moving towards mobility. Their solution avoids “throw-away” of 802.16-2004 systems.

iv. Customers

Motorola’s MotoWi4 WiMAX solutions will be available for customer trials by Q2 2006.


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4.1.4 Adaptix

Juniper Research spoke with Byron Young, VP, Marketing and Product Management

i. The Company

Adaptix was founded in 2004 and provides broadband wireless platform solutions. It was earlier known as Broadstorm and changed its name to Adaptix in 2004. It uses its patented OFDMA/TDD technology expertise in providing pre-WiMAX (802.16e) and WiBro compliant solutions on a Software Defined Radio (SDR) platform. Adaptix is a privately held company with funding from Baker Capital of New York. Its headquarters are based in Seattle, Washington and has a development centre in Shanghai.

ii. Products

Adaptix products include both base stations and CPE equipment. Adaptix MOTION 2100 is its base station solution based on the OFDMA/TDD platform. Its operating frequencies range from 1.8, 1.9, 2.3 and 2.5 GHz. The base station supports 5 MHz channels with downlink data throughput of 5.8 Mbps and CPE uplink data throughput of 1.2 Mbps. Its approximate range is around 8 km with LOS and 1.5-6 km with NLOS. Its standard features include adaptive modulation and power allocation and support for IP base applications like VoIP, video streaming and QoS (Quality of Service). Adaptix support SDR capabilities in its base station solution that helps operators reduce operating expenses linked to frequent upgrades and revisions to their equipment.

The Adaptix MOTION 210 is the CPE product that has maximum downlink of 2.5 Mbps and supports 5 MHz channels and has all the IP base application support and operates on the same frequency ranges present in its base station solution.

iii. WiMAX Strategy

The strategy of Adaptix is to support OFDMA and is not religious about WiMAX as a solution. It takes advantage of the capabilities of both its OFDMA/TDD patent portfolio as well as its SDR capabilities. It is currently conducting trials of its equipment in Asia and believes that trials are a better way of testing performance than the certification process. Multiple carriers carry out trials and test performance thoroughly unlike the certification process that mainly tests interoperability. It believes that Mobile WiMAX will be able to support multiple form factors like PDAs (Personal Digital Assistants), handsets and laptops and is working on its third generation product for its CPE equipment. Adaptix believes that larger operators prefer Mobile WiMAX because they are able to take advantage of single infrastructure and multiple services. Fixed and Mobile WiMAX are separate markets initially but will converge in the future.


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iv. Customers

Adaptix channel cards are being used in the WiBro networks in Korea through its agreement with LG Electronics.

4.1.5 Alcatel

i. The Company

Alcatel is a leading telecommunications provider for carriers, ISPs and enterprises for voice, data and video applications for both fixed and mobile wireless networks. Alcatel is particularly strong in its mobile wireless solutions that cover GSM/GPRS/EDGE, 3G/UMTS and CDMA (Code Division Multiple Access) networks. It has over 300 clients in 130 countries. Alcatel is a member of the WiMAX Forum and partnered early in 2004 with Intel to develop WiMAX products. It is a publicly traded company and trades on various stock exchanges in Europe. Its revenues for FY 2005 were reported to be Euro 13.135bn and it has around 58,000 employees worldwide.

ii. Products

Alcatel announced in February 2006 at the 3GSM conference at Barcelona that it was introducing the Evolium WiMAX base station range that will operate on the Mobile WiMAX standard. This is the first Mobile WiMAX base station solution of its kind in the world. It is an outdoor base station solution that can support a range of CPE devices. During trials at the 3GSM, it showcased the solution and was able to deliver live video streams to a PCMCIA card on a laptop from the base station.

iii. Strategy

Alcatel’s strategy is to be amongst the first to market products based on the Mobile WiMAX standard. It hopes to have its Evolium WiMAX base station solution for commercial trials and deployments in mid 2006. It has a global WiMAX strategy and has opened a development centre in India for R&D, in partnership with C-DOT. It hopes to use the research from the centre for its WiMAX products as well as the growing Indian market for broadband wireless products. Alcatel had also announced in Feb 2005 that it had partnered with Alvarion to trial its Fixed WiMAX equipment in networks across France using Alvarion’s WiMAX knowledge and Alcatel’s integration speciality. The recent announcement of the Mobile WiMAX product has shifted their focus from Fixed WiMAX to Mobile WiMAX.

iv. Customers

The first customers for the Evolium WiMAX base station will be announced around mid 2006.


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5 Mobile WiMAX Subscriber Forecasts This Chapter contains the following forecasts for Mobile WiMAX for the period 2007-2012.

• Subscriber Forecasts: This is the key figure that helps in determining the size of the market for Mobile WiMAX

• Developed and Developing World: All of the forecasts are according to two regions, namely the developing world and the developed world. This is important to understand because the market for WiMAX is expected to evolve differently in these two regions.

5.1 Forecasting Technique The technique that is used to derive the forecasts for Mobile WiMAX is a combination of solid statistical analysis, firmly grounded base numbers and extensive primary and secondary research.

5.1.1 Statistical Analysis

There are primarily two statistical methods that have been used for the forecasts: Gompertz Curve Analysis and Fisher Pry Modelling.

i. Gompertz Curve

Gompertz curve is a growth curve that is used to calculate the growth rate of systems. The Gompertz curve is typically used in applications where the growth is slowest at the start like population, HDTV (High Definition Television), digital cameras, cellular phone uptake, Internet


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uptake etc., It is a typical ‘S-curve’ that has slow growth initially, followed by a steep growth and slowing down towards the later stages. The formula for Gompertz curve is given by

where

Y = variable that needs to be estimated

A = Lower Limit

B = Upper Limit

M = Time of maximum growth

B = Growth rate

X = Time

Figure 5-1: Typical Gompertz Curve

Source: bios.sari.ac.uk

ii. Fisher Pry Model

The Fisher Pry Model is another S-curve model that is used in technology forecasting especially in areas where one technology replaces the other. It is used in technology replacement forecasting in the case of a technically superior technology replacing an old technology. It is used quite frequently in forecasts where the installed base of communications will change over time to a new one.


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Y(T) = 1/( 1 + e(-B(T-A)))

where

Y(T) = Fraction of potential market served by the new technology at time T

B = Adoption rate

A = Time the technology reaches 50% of the total market

Figure 5-2: Fisher Pry Modelling for Digital vs Analogue Subscribers

Source: Technology Futures

5.1.2 Key Assumptions

• The developed world has been assumed to consist of the following regions:

o North America

o Western Europe

o Developed Asia (South Korea, Japan, Taiwan, Hong Kong, Singapore)

o Australia

• The developing world is assumed to consist of the following regions:

o South America

o India

o China

o Eastern Europe (including parts of Central Europe and Russia)

o Rest of the World (ROW) – primarily consists of Africa, Middle East, and South East Asia.

• The forecasts for Mobile WiMAX are for certified Mobile WiMAX equipment. This does not contain pre-Mobile WiMAX or ‘Mobile WiMAX style’ networks or


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equipment. The period for Mobile WiMAX subscribers has been assumed to begin from 2007 because the first certified equipment would be available in 2007.

• The average price of CPE for Mobile WiMAX has been assumed to reduce from US$400 to US$100 from 2007 to 2012.

• All Mobile WiMAX users are assumed to use data services, but only a fraction of those are assumed to use voice.

• The average ARPU (Average Revenue per User) for Mobile WiMAX has been assumed to be US$35 for data services in developed world and US$25 for data services in the developing world. The voice ARPU has been assumed to be bundled with the data ARPU and thus has been taken as US$10 for the developing world and US$8 for the developed world. It has been assumed to be constant for the period of forecasts.

• The average cost of base station only includes the cost of the base station equipment. It does not include the cost of operating the base station or the cost of leasing rooftops.

• In the case of rural adoption, it has been assumed that developing regions will see a higher growth in rural areas. This is based on the secondary research and interviews conducted.

• The developed world will have a slower adoption of Mobile WiMAX compared to the developing world due to a larger base of 3G deployments. However the adoption of Mobile WiMAX will be speedier than the history of adoption with 3G due to the maturity of the mobile market, applications and users.

5.1.3 Methodology

The forecasts are based on a top-down approach. The number of subscribers for Mobile WiMAX are based on two distinct sets of users.

• The first set of users will use Mobile WiMAX as a mobile broadband technology. The total number of cellular subscribers is used as a top base for this. This is similar to calculating the adoption of 3G from the base of cellular subscribers. The only difference is that the adoption of 3G and Mobile WiMAX will be different, which has been captured in the methodology. The forecast for cellular subscribers is based on Gompertz curve analysis. Historic numbers for cellular subscribers from 1999-2004 are used from the ITU (International Communications Union) database to forecast using Gompertz curve modelling. The Gompertz curve helps to forecast the number of cellular subscribers for developing and developed countries in a realistic manner.

• The second set of users will use Mobile WiMAX purely as a fixed wireless technology. The number of fixed wireless users for Mobile WiMAX is derived from Fixed WiMAX subscriber forecasts in the Fixed WiMAX report.


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Figure 5-3: Forecast Model Methodology


The number of Mobile WiMAX subscribers is calculated using Fisher Pry modelling. The Fisher Pry model uses 3G adoption data as a base for deriving the Mobile WiMAX adoption curves for each region. This is adapted to the Mobile WiMAX timeline using a set of assumptions. This adoption curve when applied to the base cellular subscribers from the first set, gives the number of Mobile WiMAX subscribers that will use Mobile WiMAX for personal broadband. The forecasts are varied according to Optimistic Scenario, conservative and Moderate Scenario assumptions to the timeline and adoption rates. The Moderate Scenario adoption figures are taken as an average of the Optimistic Scenario and conservative adoption numbers. The Moderate Scenario numbers are believed to be realistic forecasts taking into account the current state of the market.


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The Moderate Scenario forecasts for Mobile WiMAX subscribers are then used to calculate the number of Mobile WiMAX base stations. This is based on the maximum number of subscribers that can be accommodated in a Mobile WiMAX base station.

To calculate the number of voice users on Mobile WiMAX, the methodology uses the number of Voice over WiFi (VoWiFi) shipments, which is then adapted to the Mobile WiMAX timeline and assumptions for different regions. This is then applied to the Moderate Scenario number of Mobile WiMAX subscribers to give the number of Mobile WiMAX users that will use voice services.

5.2 Cellular Subscribers – Base Data The base of the Mobile WIMAX forecasts is the cellular subscriber forecasts. These are calculated using Gompertz curve analysis as explained in the methodology. The total number of cellular subscribers is expected to reach 3.28bn by 2012. The total number of developed region subscribers will be 1.27bn in 2012 and the total number of developing region subscribers will be 2.01bn. The CAGR (Compound Annual Growth Rate) for total number of mobile subscribers for the period 2007-2012 will be 4.38%. The maximum growth of subscribers in the developed world will be in Australia and for the developing world it will be in India.

5.2.1 Developed World Forecasts

Figure 5-4: Cellular Mobile Users ('000) – Developed World Forecast 2007 – 2012

0

200000

400000

600000

800000

1000000

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2007 2008 2009 2010 2011 2012

AustraliaDev AsiaW. EuropeNorth America



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Table 5-1: Cellular Mobile Users ('000) – Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 289,748 315,473 338,051 357,411 373,708 387,231

W. Europe 504,084 525,173 540,507 551,480 559,247 564,704

Dev Asia 220,712 237,631 252,560 265,415 276,272 285,305

Australia 22,070 24,021 25,797 27,383 28,777 29,986

Total Developed World 1,036,614 1,102,298 1,156,915 1,201,688 1,238,004 1,267,226


5.2.2 Developing World

Figure 5-5: Cellular Mobile Users ('000) – Developing World Forecast 2007 – 2012

0200000400000

600000800000

10000001200000

1400000160000018000002000000

2007 2008 2009 2010 2011 2012

Rest of World

E Europe

China

India

South America


Table 5-2: Cellular Mobile Users ('000) – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 300,122 330,875 355,982 375,971 391,591 403,630

India 181,909 216,369 242,527 261,427 274,647 283,698

China 551,301 597,976 632,697 657,941 676,007 688,794

E Europe 268,020 284,480 295,305 302,290 306,744 309,562

Rest of World 308,639 317,055 321,829 324,509 326,005 326,837

Total Developing World 1,609,991 1,746,754 1,848,340 1,922,138 1,974,993 2,012,521



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5.2.3 Global Forecasts

Figure 5-6: Cellular Mobile Users (‘000) – Global Forecast 2007-2012

2007 2008 2009 2010 2011 2012

Total Developed WorldTotal Developing World

All0

500000

1000000

1500000

2000000

2500000

3000000

3500000


Table 5-3: Cellular Mobile Users (‘000) – Global Forecast 2007-2012

2007 2008 2009 2010 2011 2012


1,036,614 1,102,298 1,156,915 1,201,688 1,238,004 1,267,226

Total Developing World

1,609,991 1,746,754 1,848,340 1,922,138 1,974,993 2,012,521

All 2,646,605 2,849,052 3,005,255 3,123,826 3,212,997 3,279,747


5.3 Mobile WiMAX Subscribers The adoption percentages give a sense of the number of cellular subscribers that will actually shift to Mobile WiMAX. The important thing to remember when looking at these penetration rates is that, the big pool of subscribers consists of 2G/2.5G and 3G subscribers. Juniper Research has used 3G adoption rates as a base when estimating the adoption rates for Mobile WiMAX. As explained in the methodology this has been done largely by using the Fisher Pry Adoption curve that is useful in estimating replacement technology adoption. The adoption rates for Mobile WiMAX seem to be extremely small as they represent a fraction of the market but within the larger pool of cellular subscribers, exist personal broadband subscribers who would adopt Fixed WiMAX. The analysis takes these factors into account and although the adoption rates seem to be small, when multiplied with the larger pool of cellular subscribers, we get a reasonable number of subscribers that would adopt Mobile WiMAX. The


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number has been varied according to three scenarios as explained in the methodology: Optimistic, Conservative and Moderate.

There is a high adoption in Developed Asia because the market for personal broadband is very mature and the user demand for personal broadband applications is higher than any of the other developed regions. The rollout of WiBro (Wireless Broadband) in Korea is another significant factor for the increased adoption rate in Developed Asia. Europe and North America will see similar adoption rates by 2012 because although US is lagging behind Europe in terms of 3G adoption, it will catch up with Europe in the forecast period.

In the developing world we will see high adoption rates in India and China, which will show similar adoption rates throughout the forecast period. This is because both the regions have similar adoption rates in terms of 3G, with India having a bit of an edge because the Indian government is pro Mobile WiMAX and has shown positive signals of making WiMAX spectrum available. China loses out on the spectrum availability front. The adoption rate of Mobile WiMAX is highest in Rest of the World, which includes Africa and the Middle East. The highest growth will be in these regions because of high operator interest and the focus of vendors on the market in the lower half of the developing world.

The following sections cover:

• Mobile WiMAX users who are purely personal broadband

• Mobile WiMAX users who are fixed broadband and have shifted from being potential Fixed WiMAX subscribers

• Finally the addition of personal broadband and fixed broadband users to give the final number of Mobile WiMAX subscribers.

5.3.1 Optimistic Scenario (Personal Broadband)

i. Mobile WiMAX Users as % of 2G/3G Subscribers

The optimistic scenario forecasts high adoption numbers for both the developed and developing world. The Optimistic Scenario forecast assumes a shorter adoption time period for both developed and developing regions. This is dependent on factors such as certification process timelines, operator trials and plugfests, which ensure interoperability of equipment. The Optimistic Scenario forecasts assume that all of these factors will not cause any delays and all of the deadlines decided by the WiMAX Forum will be met and will be in fact sooner than expected. Apart from these factors it is also based on adoption rate that is speedier than the adoption rate of 3G.

Table 5-4: Mobile WiMAX (Personal Broadband) Users as % of 2G/3G Subscribers – Developed World Forecast 2007 – 2012 (Optimistic Scenario)

2007 2008 2009 2010 2011 2012

North America 0.052% 0.084% 0.133% 0.209% 0.324% 0.491%

W. Europe 0.104% 0.146% 0.203% 0.280% 0.382% 0.515%

Dev Asia 0.156% 0.370% 0.629% 0.796% 0.866% 0.890%

Australia 0.142% 0.189% 0.250% 0.327% 0.426% 0.547%


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Table 5-5: Mobile WiMAX Mobile Users as % of 2G/3G Subscribers – Developing World Forecast 2007 – 2012 (Optimistic Scenario)

2007 2008 2009 2010 2011 2012

South America 0.035% 0.052% 0.077% 0.114% 0.168% 0.246%

India 0.099% 0.135% 0.184% 0.250% 0.338% 0.454%

China 0.093% 0.127% 0.173% 0.235% 0.318% 0.428%

E Europe 0.062% 0.088% 0.124% 0.174% 0.243% 0.338%

Rest of World 0.190% 0.260% 0.354% 0.479% 0.643% 0.851%


ii. Developed World Forecasts

Figure 5-7: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developed World Forecast 2007 – 2012

0

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2007 2008 2009 2010 2011 2012



Table 5-6: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 151.5 263.8 449.0 746.9 1210.1 1900.0

W. Europe 525.1 765.2 1095.3 1542.2 2135.9 2905.5

Dev Asia 344.9 878.9 1587.6 2113.9 2392.7 2537.8

Australia 31.4 45.4 64.4 89.6 122.5 164.1

Total Developed World 1052.9 1953.2 3196.3 4492.5 5861.1 7507.4



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iii. Developing World Forecasts

Figure 5-8: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developing World Forecast 2007 – 2012

0

1000

2000

3000

4000

5000

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7000

8000

9000

10000

2007 2008 2009 2010 2011 2012

Rest of WorldE EuropeChinaIndia South America


Table 5-7: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012 South America 104.5 171.3 273.5 427.7 657.3 994.3

India 179.8 292.3 446.6 653.8 928.4 1287.9

China 511.6 758.9 1095.3 1548.3 2152.6 2949.6

E Europe 166.6 249.6 365.0 524.8 744.9 1045.5

Rest of World 585.0 823.6 1139.8 1555.5 2095.1 2781.9

Total Developing World 1547.4 2295.7 3320.2 4710.2 6578.3 9059.1


iv. Global Forecasts

Table 5-8: Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012



All 2600.3 4248.9 6516.5 9202.7 12439.4 16566.5



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Figure 5-9 Mobile WiMAX Subscribers ('000) Personal Broadband (Optimistic Scenario) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012Total Developed World


2000

40006000

8000

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12000

14000

16000

18000


5.3.2 Conservative Scenario (Personal Broadband)


The Conservative Scenario forecast assumes that there will be a significant delay in the various processes that are intrinsic to the adoption of Mobile WiMAX. This delay is assumed to be 4-8 months. This mainly assumes that Mobile WiMAX will face delays not only in terms of certification but during the evaluation phase, which consists of trials and tests. The forecasts assume also that subscriber adoption will be slow as compared to Optimistic Scenario forecasts. Apart from these factors the adoption rate of Mobile WiMAX is assumed to be slower than 3G adoption upon which Fisher Pry Analysis is based.

Table 5-9: Mobile WiMAX Mobile Users as % of 2G/3G Subscribers – Developed World Forecast 2007 – 2012 (Conservative Scenario)

2007 2008 2009 2010 2011 2012

North America 0.020% 0.033% 0.054% 0.088% 0.142% 0.228%

W. Europe 0.024% 0.044% 0.080% 0.142% 0.250% 0.426%

Dev Asia 0.043% 0.140% 0.363% 0.642% 0.811% 0.874%

Australia 0.035% 0.057% 0.092% 0.149% 0.238% 0.374%



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Table 5-10: Mobile WiMAX Mobile Users as % of 2G/3G Subscribers – Developing World Forecast 2007 – 2012 (Conservative Scenario)

2007 2008 2009 2010 2011 2012

South America 0.007% 0.012% 0.022% 0.041% 0.074% 0.133%

India 0.018% 0.032% 0.056% 0.097% 0.168% 0.287%

China 0.020% 0.035% 0.061% 0.104% 0.178% 0.300%

E Europe 0.012% 0.022% 0.041% 0.074% 0.133% 0.237%

Rest of World 0.030% 0.055% 0.099% 0.178% 0.315% 0.545%



Figure 5-10: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developed World Forecast 2007 – 2012


Table 5-11: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 58.2 104.0 182.4 314.3 531.7 881.2

W. Europe 123.4 232.8 431.3 784.6 1395.4 2403.1

Dev Asia 95.1 333.2 917.7 1703.2 2240.6 2493.2

Australia 7.6 13.6 23.8 40.9 68.6 112.0

Total Developed World 284.4 683.5 1555.2 2843.0 4236.4 5889.6 Source: Juniper Research


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Table 5-12: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 20.4 40.9 80.0 153.4 289.3 536.8

India 33.5 69.6 135.9 254.3 461.0 813.1

China 112.2 210.3 383.7 685.5 1202.3 2069.4

E Europe 33.1 64.0 120.5 223.3 407.9 734.1

Rest of World 93.5 174.2 319.3 577.2 1026.5 1782.8



Figure 5-11: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Developing World Forecast 2007 – 2012

0

1000

2000

3000

4000

5000

6000

2007 2008 2009 2010 2011 2012




Table 5-13: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012



All 577.1 1242.4 2594.6 4736.7 7623.4 11825.8



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Figure 5-12: Mobile WiMAX Subscribers ('000) Personal Broadband (Conservative Scenario) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012Total Developing World

Total Developed WorldAll0

2000

4000

6000

8000

10000

12000


5.3.3 Moderate Scenario (Personal Broadband)


The Moderate Scenario number of subscribers for Mobile WiMAX is an average of the Optimistic Scenario and Conservative Scenario subscriber numbers. In other words the Moderate Scenario estimate assumes that factors like certification, operator adoption, trials, plugfests and evaluations will follow the normal timeline as laid out by the WiMAX Forum. Juniper Research believes that this is a realistic timeline and that the Moderate Scenario subscriber forecasts are achievable taking into account the current market conditions and activity levels.


The Mobile WiMAX subscribers based on personal broadband usage are forecast to reach 6.7m for the developed world in 2012 and similarly will reach 7.5m for the developing world.

Table 5-14: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 104.8 183.9 315.7 530.6 870.9 1390.6

W. Europe 324.3 499.0 763.3 1163.4 1765.6 2654.3

Dev Asia 220.0 606.0 1252.7 1908.5 2316.7 2515.5

Australia 19.5 29.5 44.1 65.2 95.5 138.1




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Figure 5-13: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developed World Forecast 2007 – 2012

0

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2007 2008 2009 2010 2011 2012




Figure 5-14: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developing World Forecast 2007 – 2012

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2007 2008 2009 2010 2011 2012




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Table 5-15: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 62.4 106.1 176.8 290.6 473.3 765.5

India 106.6 180.9 291.2 454.1 694.7 1050.5

China 311.9 484.6 739.5 1116.9 1677.4 2509.5

E Europe 99.9 156.8 242.8 374.1 576.4 889.8

Rest of World 339.2 498.9 729.5 1066.3 1560.8 2282.4




Figure 5-15: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Global Forecast 2007 – 2012


Table 5-16: Mobile WiMAX Subscribers ('000) Personal Broadband (Moderate Scenario) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012



All 1588.8 2745.7 4555.5 6969.7 10031.4 14196.1



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5.3.4 Mobile WiMAX Scenario Comparisons

i. Developed World Comparison

Figure 5-16 Mobile WiMAX Subscribers ('000) Personal Broadband - Developed World Forecast 2007 – 2012


Table 5-17: Mobile WiMAX Subscribers ('000) Personal Broadband - Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Optimistic 1052.9 1953.2 3196.3 4492.5 5861.1 7507.4

Conservative 284.4 683.5 1555.2 2843.0 4236.4 5889.6

Moderate 668.7 1318.4 2375.7 3667.7 5048.8 6698.5


ii. Developing World Comparison

Table 5-18: Mobile WiMAX Subscribers ('000) Personal Broadband - Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Optimistic 1547.4 2295.7 3320.2 4710.2 6578.3 9059.1

Conservative 292.7 558.9 1039.4 1893.7 3387.0 5936.2

Moderate 920.1 1427.3 2179.8 3302.0 4982.6 7497.6



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Figure 5-17: Mobile WiMAX Subscribers ('000) Personal Broadband - Developing World Forecast 2007 – 2012


iii. Global World Comparison

Figure 5-18: Mobile WiMAX Subscribers ('000) Personal Broadband - Developed and Developing World Forecast 2007 – 2012


Table 5-19: Mobile WiMAX Subscribers ('000) Personal Broadband - Developed and Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Optimistic 2600.4 4249.0 6516.5 9202.8 12439.4 16566.5

Conservative 577.1 1242.4 2594.5 4736.6 7623.3 11825.8

Moderate 1588.7 2745.7 4555.5 6969.7 10031.4 14196.2



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5.3.5 Mobile WiMAX (Fixed WiMAX Switch)

i. Mobile WiMAX Subscribers as % of 2G/3G Subscribers

The fixed wireless capability of Mobile WiMAX apart from being a mobile and nomadic access service would allow it to attract Fixed WiMAX users that are purely fixed wireless based. This is expected to start around the 2007 timeframe because that is when Mobile WiMAX is expected to become available in its certified form. Juniper Research estimates in its forecasts for Mobile WiMAX subscribers that there will be a definite shift of Fixed WiMAX subscribers to Mobile WiMAX. Mobile WiMAX vendors have indicated that form factors are under development that would be able to support fixed wireless services at home and mobile wireless services on the go and outside the home. There are cellular operators like Sprint in the US that are evaluating Mobile WiMAX and are planning on offering fixed wireless services on it. Thus Mobile WiMAX will be inheriting a portion of the Fixed WiMAX (potential) subscribers. The initial estimates of this shift have been taken as increasing from 5% in 2007 increasing to 40% in 2012. This is based on the relative level of activity happening in Mobile and Fixed WiMAX and the primary research interviews conducted with vendors. Juniper Research believes that the momentum will shift towards Mobile WiMAX towards 2010 when it will overshadow Mobile WiMAX.


The developed world will see the number of Fixed WiMAX subscribers shifting to Mobile WiMAX increase from 60,500 in 2007 to 2m in 2012 in the developed world in the period 2007-12. In the developing world this number will increase from 57,300 to 5.13m in the same period.

Figure 5-19: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developed World Forecast 2007 – 2012

0

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1000

1500

2000

2500

2007 2008 2009 2010 2011 2012



The largest shift will be seen in North America where Sprint and Clearwire are expected to launch Mobile WiMAX services specifically meant for fixed wireless. Western Europe has also seen interest in Mobile WiMAX from incumbent cellular operators as well as wireline operators like BT in the UK.


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Table 5-20: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 30.5 62.2 125.0 247.2 481.0 849.7

W. Europe 17.5 37.8 80.4 169.0 351.6 659.8

Dev Asia 9.6 20.8 44.6 94.8 199.5 377.5

Australia 2.9 6.9 15.6 34.1 72.0 134.9

Total Developed World 60.5 127.7 265.6 545.1 1104.1 2021.8 Source: Juniper Research


In the developing world China will see the largest shift because of high subscriber numbers and a relatively large population that will be using Fixed WiMAX. Eastern Europe will also be amongst the regions where this shift will be prominent. India has also seen extensive interest in Mobile WiMAX, much more than Fixed WiMAX. Thus towards 2010 Mobile WiMAX will see a sizable addition to its subscriber base from potential Fixed WiMAX users.

Figure 5-20: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developing World Forecast 2007 – 2012

0

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2007 2008 2009 2010 2011 2012




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Table 5-21: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 8.4 21.6 53.9 130.8 310.2 718.4

India 4.8 14.9 42.8 115.2 294.7 723.5

China 23.9 61.3 150.7 356.5 816.1 1813.4

E Europe 15.2 39.8 101.2 248.4 587.9 1339.9

Rest of World 4.9 13.3 34.6 88.2 220.6 541.6




Figure 5-21: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Global Forecast 2007 – 2012



1000

2000

3000

4000

5000

6000

7000

8000


Table 5-22: Mobile WiMAX Subscribers ('000) Fixed (Moderate Scenario) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012



All 117.8 278.6 648.7 1484.3 3333.7 7158.5



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5.3.6 Mobile WiMAX (Personal Broadband + Fixed)

i. Mobile WiMAX Subscribers

The addition of Fixed WiMAX subscribers to the base of personal broadband Mobile WiMAX subscribers will raise the subscriber numbers for Mobile WiMAX. In the developed world we will see an increase from 729,000 to 8.7m from 2007-12 and the developing world will see an increase from 977,300 in 2007 to 12.6m in 2012.


In the developed world Western Europe will see the largest number of Mobile WiMAX subscribers, which will grow from 342,000 in 2007 to 3.3m in 2012. This is because of the popularity of 3G applications and technology. This will be followed by Developed Asia which will grow from 229,000 to 2.9m. Western Europe will have the advantage of attracting a larger number of fixed wireless users, which will add to the Mobile WiMAX subscriber base.

Figure 5-22: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developed World Forecast 2007 – 2012

0

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6000

7000

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2007 2008 2009 2010 2011 2012

Australia

Dev AsiaW. Europe

North America


Table 5-23: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 135.3 246.1 440.7 777.7 1351.9 2240.3

W. Europe 341.8 536.8 843.7 1332.4 2117.3 3314.1

Dev Asia 229.6 626.8 1297.3 2003.4 2516.2 2893.0

Australia 22.4 36.4 59.7 99.3 167.6 272.9




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The developing world will see China leading the regions with 4.3m subscribers by 2012, followed by Rest of the World, which will have 2.8m, Eastern Europe with 2.2m, India 1.8m and South America with 1.5m. South America will see the smallest growth because there are large rollouts planned for Fixed WiMAX networks and the adoption rate of 3G has been slower in Latin America, causing for low uptake of Personal Broadband.

Figure 5-23: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developing World Forecast 2007 – 2012

0

2000

4000

6000

8000

10000

12000

14000

2007 2008 2009 2010 2011 2012

Rest of WorldE EuropeChina

India South America


Table 5-24: Mobile WiMAX Subscribers ('000) (Personal Broadband + Fixed) – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 70.9 127.7 230.6 421.4 783.5 1483.9

India 111.4 195.9 334.1 569.3 989.4 1774.0

China 335.8 545.9 890.1 1473.4 2493.6 4322.9

E Europe 115.0 196.6 344.0 622.4 1164.3 2229.7

Rest of World 344.2 512.2 764.1 1154.6 1781.4 2823.9




The total number of subscribers for Mobile WiMAX, which includes personal broadband plus the fixed wireless subscribers that would switch to Mobile WiMAX, is estimated to reach 21.4m by the year 2012 beginning with 1.7m in 2007. This gives a CAGR of 65.8% for the period 2007-12. This shows that the developing world will be slightly ahead in terms of number of subscribers because of the leapfrog effect, but the developed world will see a


0607 1323 1520e Page 107

healthy growth in subscribers despite having a reasonable 3G installed base. This will be due to the part complementary and part competitive nature of 3G and Mobile WiMAX.

Figure 5-24: All Mobile WiMAX (Personal Broadband + Fixed) Subscribers ('000) by Developed & Developing World – Global Forecast 2007 – 2012



5000

10000

15000

20000

25000

.


Table 5-25: All Mobile WiMAX (Personal Broadband + Fixed) Subscribers ('000) by Developed & Developing World – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012



All 1706.48 3024.31 5204.31 8453.93 13365.08 21354.68


From hereon it is assumed that the number of Mobile WiMAX subscribers is the total number of Personal broadband and fixed wireless subscribers.

5.4 Fixed & Mobile WiMAX Subscribers The total number of Fixed and Mobile WiMAX subscribers in the developed world is forecast to grow from 731,300 to 11m in the period 2006-12. The number of subscribers in 2006 is purely for Fixed WiMAX as Mobile WiMAX is not expected before 2007. The maximum share of the market will be seen by Western Europe at 4m in 2012, primarily because of its large complementary 3G base for Mobile WiMAX.


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Developed Asia will have 3.3m subscribers followed by North America and Australia, which will have 3.2m and 434,000 subscribers respectively in 2012.

Figure 5-25: Fixed & Mobile WiMAX Subscribers ('000) Developed World Forecast 2006 – 2012

0

2000

4000

6000

8000

10000

12000

2006 2007 2008 2009 2010 2011 2012

Australia

Dev AsiaW. Europe

North America


Table 5-26: Fixed & Mobile WiMAX Subscribers ('000) Developed World Forecast 2006 – 2012

2006 2007 2008 2009 2010 2011 2012

North America 370.6 610.3 863.7 1215.5 1702.3 2372.3 3284.9

W. Europe 213.8 630.1 926.8 1352.1 1964.0 2844.5 4095.8

Dev Asia 115.9 384.9 838.2 1576.3 2355.2 2927.0 3340.1

Australia 31.0 69.2 105.9 157.0 225.9 316.8 434.1

Total Developed World 731.3 1694.4 2734.6 4300.9 6247.5 8460.6 11154.8


5.4.2 Developing World Forecasts

The developing world will see a higher growth and higher subscriber numbers for Fixed and Mobile WiMAX. The total developing world market will grow from 528,000 to 20.3m in the period 2006-12. The highest share will come from China at 7m, Eastern Europe at 4.2m, India at 2.8m, ROW at 3.6m and South America at 2.5m.


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Figure 5-26: Fixed & Mobile WiMAX Subscribers ('000) Developing World Forecast 2006 – 2012

0

20004000

6000

800010000

1200014000

16000

1800020000

2006 2007 2008 2009 2010 2011 2012

Rest of World

E Europe

China

India

South America


Table 5-27: Fixed & Mobile WiMAX Subscribers ('000) Developing World Forecast 2006 – 2012

2006 2007 2008 2009 2010 2011 2012

South America 81.1 231.2 391.1 645.6 1042.1 1648.7 2561.6

India 35.6 202.9 378.0 664.0 1115.8 1811.3 2859.2

China 225.8 790.6 1293.7 2051.1 3164.7 4770.0 7042.9

E Europe 141.4 402.9 682.1 1123.6 1800.5 2804.2 4239.5

Rest of World 44.2 437.7 673.8 1030.8 1573.1 2396.8 3636.2

Total Developing World 528.2 2065.3 3418.8 5515.1 8696.1 13431.1 20339.5



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Figure 5-27: Fixed & Mobile WiMAX Subscribers ('000) Global Forecast 2006 – 2012

2006 2007 2008 2009 2010 2011 2012


All0

5,000

10,000

15,000

20,000

25,000

30,000

35,000


Table 5-28: Fixed & Mobile WiMAX Subscribers ('000) Global Forecast 2006 –

2012

2006 2007 2008 2009 2010 2011 2012


731.3 1694.4 2734.6 4300.9 6247.5 8460.6 11154.8


528.2 2065.3 3418.8 5515.1 8696.1 13431.1 20339.5

All 1259.5 3759.7 6153.4 9816.0 14943.6 21891.7 31494.3


0607 1323 1520e Page 111

6 Mobile WiMAX Equipment Forecasts This Chapter contains the following forecasts for Mobile WiMAX for the period 2007-2012:

• Equipment Forecasts: The total value of the equipment market is forecast based on the market for base stations and CPE (Customer Premise Equipment).

• Developed and Developing World: All of the forecasts are divided into two regions, namely the developing world and the developed world, like those in Chapter 5. This is important to understand because the market for WiMAX is expected to evolve differently in these two regions.

6.1 Mobile WiMAX Base Stations

6.1.1 Number of Base Stations

The number of Mobile WiMAX base stations is based on the number of Mobile WiMAX subscribers and the average number of subscribers that can be accommodated in a Mobile WiMAX base station. This has been assumed to be 1000 users. This assumption has been made based on primary and secondary research and the fact that this would be approximately equal to 80% of the maximum number of subscribers on a Mobile WiMAX base station. There is also a simplistic assumption that a new base station will only be added once 80% of the maximum capacity is reached.


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i. Developed World Forecasts

Figure 6-1: Number of Mobile WiMAX Base Stations – Developed World Forecast 2007 – 2012

01,000

2,0003,000

4,0005,000

6,000

7,0008,000

9,00010,000

2007 2008 2009 2010 2011 2012



Table 6-1: Number of Mobile WiMAX Base Stations - Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 135 246 440 777 1,351 2,240

W. Europe 341 536 843 1,332 2,117 3,314

Dev Asia 229 626 1,297 2,003 2,516 2,893

Australia 22 36 59 99 167 272

Total Developed World 727 1,444 2,639 4,211 6,151 8,719


ii. Developing World Forecasts

Table 6-2: Number of Mobile WiMAX Base Stations – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 70 127 230 421 783 1,483

India 111 195 334 569 989 1,774

China 335 545 890 1,473 2,493 4,322

E Europe 115 196 344 622 1,164 2,229

Rest of World 344 512 764 1,154 1,781 2,823

Total Developing World 975 1,575 2,562 4,239 7,210 12,631



0607 1323 1520e Page 113

Figure 6-2: Number of Mobile WiMAX Base Stations – Developing World Forecast 2007 – 2012

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2007 2008 2009 2010 2011 2012



iii. Global Forecasts

Table 6-3: Number of Mobile WiMAX Base Stations – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Total Developed World 729 1,446 2,641 4,212 6,152 8,720

Total Developing World 977 1,578 2,562 4,241 7,212 12,634

All 1706 3024 5203 8453 13364 21354


Figure 6-3: Number of Mobile WiMAX Base Stations – Global Forecast 2007 – 2012



5000

10000

15000

20000

25000



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6.1.2 Value of Base Station Market

The average cost of a Mobile WiMAX base station has been assumed to be $20,000 based on primary interviews and Fixed WiMAX base station costs. The cost is assumed to be stable throughout the period. This number has been used to calculate the value of the base station market based on the number of base stations forecasted earlier.

Table 6-4: Average Cost of Mobile WiMAX Base Stations ($) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

All Regions $20,000 $20,000 $20,000 $20,000 $20,000 $20,000


The total value of the Mobile WiMAX base station equipment market has been forecasted as reaching $427m by 2012. The value of the Mobile WiMAX base station equipment market will increase from $14.6m in 2007 to $174.4m in 2012 for the developed world. The developing world will see the market grow from $19.5 in 2007 to $252.7 in 2012.

i. Developed World Forecasts

Figure 6-4: Value of Mobile WiMAX Base Stations ($m) Market - Developed World Forecast 2007 – 2012

0

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0607 1323 1520e Page 115

Table 6-5: Value of Mobile WiMAX Base Stations ($m) Market - Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America $2.7 $4.9 $8.8 $15.6 $27.0 $44.8

W. Europe $6.8 $10.7 $16.9 $26.6 $42.3 $66.3

Dev Asia $4.6 $12.5 $25.9 $40.1 $50.3 $57.9

Australia $0.4 $0.7 $1.2 $2.0 $3.4 $5.5

Total Developed World $14.6 $28.9 $52.8 $84.3 $123.1 $174.4


ii. Developing World Forecasts

Table 6-6: Value of Mobile WiMAX Base Station ($m) Market - Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America $1.4 $2.6 $4.6 $8.4 $15.7 $29.7

India $2.2 $3.9 $6.7 $11.4 $19.8 $35.5

China $6.7 $10.9 $17.8 $29.5 $49.9 $86.5

E Europe $2.3 $3.9 $6.9 $12.4 $23.3 $44.6

Rest of World $6.9 $10.2 $15.3 $23.1 $35.6 $56.5

Total Developing World $19.5 $31.6 $51.3 $84.8 $144.2 $252.7


Figure 6-5: Value of Mobile WiMAX Base Stations ($m) Market - Developing World Forecast 2007 – 2012

0

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300

2007 2008 2009 2010 2011 2012




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iii. Global Market Revenue Forecasts

Figure 6-6: Value of Mobile WiMAX Base Stations ($m) Market – Global Forecast 2007 – 2012

$0

$100

$200

$300

$400

$500

2007 2008 2009 2010 2011 2012

Total DevelopingWorld

Total DevelopedWorld


Table 6-7: Value of Mobile WiMAX Base Stations Equipment Market ($m) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012


Total Developing World $19.5 $31.6 $51.3 $84.8 $144.2 $252.7

All $34.1 $60.5 $104.1 $169.1 $267.3 $427.1


6.2 Customer Premise Equipment

6.2.1 Average Cost of Mobile WiMAX CPE

The average cost of Mobile WiMAX CPE will reduce from $400 in 2007 to $100 in 2012. This value has been based on primary research interviews, Fixed WiMAX CPE costs and the volumes of Mobile WiMAX CPEs forecasted.

Table 6-8: Average Cost of Mobile WiMAX CPE ($) 2007 – 2012

2007 2008 2009 2010 2011 2012

Average CPE cost $400 $304 $231 $175 $133 $100



0607 1323 1520e Page 117

Using the average cost of Mobile WiMAX CPE and the number of Mobile WiMAX subscribers the value of the Mobile WiMAX CPE market is estimated to be $884m in 2012 for the developed world and $1.28bn in 2012 for the developing world.

6.2.2 Developed World Revenue Forecasts

The region of developed Asia will see a decline in the market 2010 onwards because it is expected that its market will reach high saturation levels. This dip shows that the reduction in CPE prices will not be proportional to the growth of subscribers, which will reach saturation levels. The release of WiBro (Wireless Broadband) in 2006 and the high installed base of 3G and soon to be rolled out 3.5G will cause a dip in the market for Mobile WiMAX around 2010 by when the market will is expected to have 3-4 competing personal broadband technologies in developed Asia. This will in effect reduce the overall CPE equipment market.

Figure 6-7: Value of Mobile WiMAX CPE Market ($m) Developed World Forecast 2007 – 2012

$0

$100$200

$300

$400

$500

$600

$700

$800

$900

2007 2008 2009 2010 2011 2012



Table 6-9: Value of Mobile WiMAX CPE Market ($m) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America $54.1 $74.8 $101.8 $136.6 $180.4 $227.2

W. Europe $136.7 $163.2 $194.9 $234.0 $282.5 $336.1

Dev Asia $91.8 $190.5 $299.7 $351.8 $335.8 $293.4

Australia $9.0 $11.1 $13.8 $17.4 $22.4 $27.7




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6.2.3 Developing World Revenue Forecasts

The developing region will see high growth regions in terms of CPE Market with China having the maximum growth in the market, followed by Eastern Europe, India and South America. The growth in ROW (Rest of World) will be proportional to the price reduction, which will see a stable growth in the market. China is expected to reach a value of $438.4m in 2012, while South America will be the smallest market in terms of value at $150.5m.

Figure 6-8: Value of Mobile WiMAX CPE Market ($m) Developing World Forecast 2007 – 2012

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2007 2008 2009 2010 2011 2012



Table 6-10: Value of Mobile WiMAX CPE Market ($m) Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America $28.4 $38.8 $53.3 $74.0 $104.6 $150.5

India $44.6 $59.5 $77.2 $100.0 $132.0 $179.9

China $134.3 $166.0 $205.7 $258.7 $332.8 $438.4

E Europe $46.0 $59.8 $79.5 $109.3 $155.4 $226.1

Rest of World $137.7 $155.7 $176.5 $202.7 $237.7 $286.4

Total Developing World $390.9 $479.8 $592.1 $744.7 $962.5 $1,281.4



0607 1323 1520e Page 119

6.2.4 Global Market Revenue Forecasts

Figure 6-9: Value of Mobile WiMAX CPE Market ($m) Global Forecast 2007 – 2012

$0

$500

$1,000

$1,500

$2,000

$2,500

2007 2008 2009 2010 2011 2012

Total DevelopingWorldTotal DevelopedWorld


Table 6-11: Value of Mobile WiMAX CPE Market ($m) Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012


Total Developing World $390.9 $479.8 $592.1 $744.7 $962.5 $1,281.4

All $682.6 $919.4 $1202.4 $1484.4 $1783.6 $2165.8


6.3 Total Mobile WiMAX Equipment Market The total value of Mobile WiMAX equipment market consists of Mobile WiMAX base stations and CPEs. The total value of Mobile WiMAX equipment for the developed world will reach $1.06bn in 2012. On the other hand, the developing world market will reach $1.53bn. Thus the global market for Mobile WiMAX equipment is estimated to be $2.59bn in 2012.


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Figure 6-10: Value of Mobile WiMAX CPE + Base Station Market ($m) Developed World Forecast 2007 – 2012

$0

$200

$400

$600

$800

$1,000

$1,200

2007 2008 2009 2010 2011 2012



Table 6-12: Value of Mobile WiMAX CPE + Base Station Market ($m) Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America $56.8 $79.7 $110.6 $152.1 $207.4 $272.0

W. Europe $143.6 $173.9 $211.8 $260.6 $324.9 $402.4

Dev Asia $96.4 $203.1 $325.7 $391.8 $386.1 $351.3

Australia $9.4 $11.8 $15.0 $19.4 $25.7 $33.1

Total Developed World $306.2 $468.5 $663.1 $824.0 $944.2 $1,058.8



0607 1323 1520e Page 121


Figure 6-11: Value of Mobile WiMAX CPE + Base Station Market ($m) Developing World Forecast 2007 – 2012

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2007 2008 2009 2010 2011 2012



Table 6-13: Value of Mobile WiMAX CPE + Base Station Market ($m) Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America $29.8 $41.4 $57.9 $82.4 $120.2 $180.2

India $46.8 $63.5 $83.9 $111.3 $151.8 $215.4

China $141.1 $176.9 $223.5 $288.2 $382.6 $524.9

E Europe $48.3 $63.7 $86.3 $121.7 $178.7 $270.7

Rest of World $144.5 $165.9 $191.8 $225.8 $273.4 $342.9

Total Developing World $410.5 $511.4 $643.4 $829.5 $1,106.7 $1,534.1



Table 6-14: Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World – Global Forecast 2007-2012

2007 2008 2009 2010 2011 2012

Developed World $306.2 $468.5 $663.1 $824.0 $944.2 $1,058.8

Developing World $410.5 $511.4 $643.4 $829.5 $1,106.7 $1,534.1

All $716.7 $979.9 $1,306.5 $1,653.5 $2,050.9 $2,592.9



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Figure 6-12: Value of Mobile WiMAX Equipment Market ($m) by Developed & Developing World – Global Forecast 2007-2012

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2007 2008 2009 2010 2011 2012

Total Developing WorldTotal Developed World



0607 1323 1520e Page 123

7 Mobile WiMAX : Data/Voice Services Forecasts This Chapter contains the following forecasts for Mobile WiMAX for the period 2007-2012.

• Breakdowns by Category: The subscriber forecasts are broken down by voice and data subscribers.

• Developed and Developing World: All of the forecasts are divided into two regions, namely the developing world and the developed world, like those in Chapters 5 and 6. This is important to understand because the market for WiMAX is expected to evolve differently in these two regions.

7.1 Mobile WiMAX Data Services Subscribers The market for Mobile WiMAX voice and data services is based upon the Average Revenue per User (ARPU) per month and the number of Mobile WiMAX subscribers. The ARPU is divided amongst voice and data services. Mobile WiMAX being a mobile broadband technology would have all the users as data users, while only some of its users will be using voice services. This is based on secondary research conducted and primary research interviews.

Mobile WiMAX Data Services Revenue The Average Revenue per User (ARPU) per month for the developed world has been assumed to be $35 for the developed world and $25 for the developing world because the spending


Page 124 0607 1323 1520e

power of users in the developing world is lower than that of the developed world. This is also based on mobile ARPU data. The ARPU is expected to stay stable during the course of the period as a working assumption. This is based on the fact that although there will be a slight increase in ARPU for some operators, there will be a decrease in ARPU for others because of the variance in adoption and usage trends, which will lead to an average ARPU remaining stable.

Table 7-1: Average Revenue per month per Mobile WiMAX Data User ($) Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Developed World $35 $35 $35 $35 $35 $35

Developing World $25 $25 $25 $25 $25 $25



The report forecasts that the value of the developed world market for Mobile WiMAX services will reach $3.66bn by 2012 (i.e using subscribers from Table 5-23 multiplied by the ARPU (for 12 months) in Table 7-1). The Western European market will see a growth from $143.6m to $1.4bn in the period 2007-12. This is again based on the understanding that the 2.5 GHz spectrum will become available in Europe for Mobile WiMAX, which will invigorate 3G and other second tier mobile operators to adopt Mobile WiMAX. The other big market for 3G and advanced mobile technologies, Developed Asia will see a growth of the data services market from $96.4m to $1.2bn from 2007-12.

Figure 7-1: Mobile WiMAX Data Services Revenue ($m) – Developed World Forecast 2007 – 2012

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2007 2008 2009 2010 2011 2012

Australia

Dev Asia

W. Europe

NorthAmerica



0607 1323 1520e Page 125

Table 7-2: Mobile WiMAX Data Services Revenue ($m) – Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America $56.8 $103.3 $185.1 $326.7 $567.8 $940.9 W. Europe $143.6 $225.5 $354.4 $559.6 $889.3 $1,391.9 Dev Asia $96.4 $263.3 $544.9 $841.4 $1,056.8 $1,215.1 Australia $9.4 $15.3 $25.1 $41.7 $70.4 $114.6 Total Developed World $306.2 $607.4 $1,109.4 $1,769.4 $2,584.2 $3,662.5



In the developing world, the report forecasts the market to grow from $293m to $3.8bn (i.e using subscribers numbers from Table 5-24 and ARPU (for 12 months) figures from Table 7-1). This follows the trend of Mobile WiMAX subscribers and will see the highest growth in China from $100.8m to $1.3bn in the forecast period. This will be followed by ROW region that is expected to see high adoption in Africa. ROW is expected to reach a data services market value of $847.2m. This is also due to the fact that most of Africa is devoid of basic Internet services and Mobile WiMAX will be able to provide mobile broadband to this broadband starved region.

Figure 7-2: Mobile WiMAX Data Services Revenue ($m) – Developing World Forecast 2007 – 2012

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2007 2008 2009 2010 2011 2012

Rest ofWorldE Europe

China

India

SouthAmerica



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Table 7-3: Mobile WiMAX Data Services Revenue ($m) – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America $21.3 $38.3 $69.2 $126.4 $235.0 $445.2 India $33.4 $58.8 $100.2 $170.8 $296.8 $532.2 China $100.8 $163.8 $267.0 $442.0 $748.1 $1,296.9 E Europe $34.5 $59.0 $103.2 $186.7 $349.3 $668.9 Rest of World $103.2 $153.7 $229.2 $346.4 $534.4 $847.2 Total Developing World $293.2 $473.5 $768.9 $1,272.3 $2,163.7 $3,790.3


7.1.3 Global Mobile WiMAX Data Revenue Forecasts

Table 7-4: Mobile WiMAX Data Services Revenue ($m) – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Total Developed World $306.2 $607.4 $1,109.4 $1,769.4 $2,584.2 $3,662.5 Total Developing World $293.2 $473.5 $768.9 $1,272.3 $2,163.7 $3,790.3 All $599.4 $1,080.8 $1,878.3 $3,041.7 $4,747.9 $7,452.8


Figure 7-3: Mobile WiMAX Data Services Revenue ($m) – Global Forecast 2007 – 2012

$0

$100

$200

$300

$400

$500

$600

$700

2007 2008 2009 2010 2011 2012

Total DevelopingWorld

Total DevelopedWorld



0607 1323 1520e Page 127

7.2 Mobile WiMAX Voice Services Subscribers The adoption rate for voice services is based on VoIP phone shipment forecasts and its percentage adoption based on the cellular subscriber base. The actual percentages of Mobile WiMAX subscribers who would use VoIP (Voice over IP) services are a small percentage of the number of total VoIP service users. Thus the percentages below show the actual number of users within cellular and then within VoIP that would use Mobile WiMAX VoIP. The important point to note here is that these subscribers are also data service subscribers. In other words, voice is an added option to data services.

7.2.1 Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers

Table 7-5: Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers – Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 0.005% 0.013% 0.035% 0.093% 0.257% 0.480%

W. Europe 0.000% 0.001% 0.003% 0.007% 0.021% 0.062%

Dev Asia 0.000% 0.001% 0.003% 0.007% 0.020% 0.058%

Australia 0.002% 0.004% 0.011% 0.029% 0.081% 0.226%


The developed region will see highest adoption in the US followed by Australia, Western Europe and Developed Asia. These are the same trends seen for VoIP shipments in its early adopter stage. The developing regions will see an adoption, which would be almost average to that of the developed regions. This is because there will be some countries within developing regions that will see high adoption rates like the US whilst there will be a large number of countries that will have low adoption rates.

Table 7-6: Mobile WiMAX Voice Subscribers as a % of Cellular Subscribers – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 0.002% 0.005% 0.013% 0.034% 0.095% 0.206%

India 0.002% 0.005% 0.013% 0.034% 0.095% 0.206%

China 0.002% 0.005% 0.013% 0.034% 0.095% 0.206%

E Europe 0.002% 0.005% 0.013% 0.034% 0.095% 0.206%

Rest of World 0.002% 0.005% 0.013% 0.034% 0.095% 0.206%



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The market for Mobile WiMAX voice services shows a high growth area for North America. This is because this region has seen a steady growth and demand for VoIP phones and will continue to see a high demand. The North American market for Mobile WiMAX voice services will be close to 1.8m subscribers.

Figure 7-4: Number of Mobile WiMAX Voice Services Subscribers (‘000) – Developed World Forecast 2007 – 2012

0

500

1,000

1,500

2,000

2,500

2007 2008 2009 2010 2011 2012



Table 7-7: Number of Mobile WiMAX Voice Services Subscribers (‘000) – Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America 14.50 41.06 116.67 333.72 961.44 1,858.71

W. Europe 1.77 4.95 14.11 40.76 119.03 350.35

Dev Asia 0.81 2.34 6.75 19.48 56.50 164.70

Australia 0.34 0.97 2.79 8.04 23.29 67.79

Total Developed World 17.43 49.33 140.32 402.00 1,160.27 2,441.55



0607 1323 1520e Page 129


Table 7-8: Number Mobile WiMAX Voice Services Subscribers (‘000) – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America 5.45 15.71 45.04 129.21 371.95 833.34

India 3.30 10.27 30.68 89.84 260.87 585.72

China 10.01 28.39 80.05 226.11 642.10 1,422.09

E Europe 4.87 13.51 37.36 103.88 291.36 639.13

Rest of World 5.60 15.05 40.72 111.52 309.65 674.79

Total Developing World 29.24 82.93 233.85 660.56 1,875.93 4,155.07


Figure 7-5: Number Mobile WiMAX Voice Services Subscribers (‘000) – Developing World Forecast 2007 – 2012

0500

1,0001,5002,0002,5003,0003,5004,0004,500

2007 2008 2009 2010 2011 2012

Rest of WorldE EuropeChinaIndiaSouth America



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Figure 7-6: Mobile WiMAX Voice Services Subscribers (‘000) – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012


All0

1,000

2,000

3,000

4,000

5,000

6,000

7,000


Table 7-9: Mobile WiMAX Voice Services Subscribers (‘000) – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Total Developed World 17.43 49.33 140.32 402.00 1,160.27 2,441.55

Total Developing World 29.24 82.93 233.85 660.56 1,875.93 4,155.07

All 46.67 132.26 374.17 1062.56 3036.2 6596.62


7.3 Mobile WiMAX Voice Services Revenue The voice services ARPU (Average Revenue per User) is based on the current VoIP ARPUs seen in broadband bundled services. It is expected to be the same for Mobile broadband based on the primary research conducted.


0607 1323 1520e Page 131

Table 7-10: Average Revenue per Mobile WiMAX Voice Subscriber ($) Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Developed World $10 $10 $10 $10 $10 $10

Developing World $8 $8 $8 $8 $8 $8



North America will lead the voice services revenue market and is expected to reach $223m by 2012. The total voice services revenue market for the developed world is forecast to grow from $2.1m to $293m from 2007-12.

Figure 7-7: Value of Mobile WiMAX Voice Services Market ($m) – Developed World Forecast 2007 – 2012

$0

$50

$100

$150

$200

$250

$300

$350

2007 2008 2009 2010 2011 2012

Australia

Dev Asia

W. Europe

NorthAmerica


Table 7-11: Value of Mobile WiMAX Voice Services Market ($m) – Developed World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

North America $1.7 $4.9 $14.0 $40.0 $115.4 $223.0 W. Europe $0.2 $0.6 $1.7 $4.9 $14.3 $42.0 Dev Asia $0.1 $0.3 $0.8 $2.3 $6.8 $19.8 Australia $0.0 $0.1 $0.3 $1.0 $2.8 $8.1 Total Developed World $2.1 $5.9 $16.8 $48.2 $139.2 $293.0



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In the developing world, China will see the maximum share in the market at $136m in 2012. The total developing world market is expected to be higher than the developed world and reach $398m in 2012.

Figure 7-8: Value of Mobile WiMAX Voice Services Market ($m) – Developing World Forecast 2007 – 2012

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2007 2008 2009 2010 2011 2012

Rest ofWorld

E Europe

China

India

SouthAmerica


Table 7-12: Value of Mobile WiMAX Voice Services Market ($m) – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

South America $0.5 $1.5 $4.3 $12.4 $35.7 $80.0 India $0.3 $1.0 $2.9 $8.6 $25.0 $56.2 China $1.0 $2.7 $7.7 $21.7 $61.6 $136.5 E Europe $0.5 $1.3 $3.6 $10.0 $28.0 $61.4 Rest of World $0.5 $1.4 $3.9 $10.7 $29.7 $64.8 Total Developing World $2.8 $8.0 $22.4 $63.4 $180.1 $398.9



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7.3.3 Global Mobile WiMAX Voice Revenue Forecasts

Figure 7-9: Mobile WiMAX Voice Services Revenue ($m) – Global Forecast 2007 – 2012

$0

$100

$200

$300

$400

$500

$600

$700

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2007 2008 2009 2010 2011 2012




Table 7-13: Mobile WiMAX Voice Services Revenue ($m) – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Total Developed World $2.1 $5.9 $16.8 $48.2 $139.2 $293.0 Total Developing World $2.8 $8.0 $22.4 $63.4 $180.1 $398.9 All $4.9 $13.9 $39.3 $111.7 $319.3 $691.9


7.4 Mobile WiMAX Data & Voice Subscribers Split The following set of forecasts show the expected number of Mobile WiMAX subscribers that will be using voice as an added option to their data services. As mentioned earlier, Juniper Research estimates that all of the Mobile WiMAX subscribers will be using data services, but only a fraction of those will have voice. This means that the two sets of subscribers are overlapping and cannot be added.

The forecasts show that the total number of the voice service subscribers will form close to 28% of the total subscribers in 2012 for developed regions and will form 33% of the total Mobile WiMAX subscribers in developing regions. In both the regions, voice services will see a slow start in the initial years picking up later in 2010. This is based on primary research and operator interest in voice services for Mobile WiMAX.


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Figure 7-10: Mobile WiMAX Subscribers Voice/Data Split (000’s) – Developed World Forecast 2007 – 2012


Table 7-14: Mobile WiMAX Data & Voice Services Subscribers (000’s)

2007 2008 2009 2010 2011 2012

Data Services 729.1 1446.1 2641.4 4212.8 6152.9 8720.3

Voice & Data Services 17.43 49.33 140.32 402.00 1,160.27 2,441.55



Figure 7-15: Mobile WiMAX Subscribers Voice/Data Split (000’s) – Developing World Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Data Subscribers 977.3 1578.2 2562.9 4241.1 7212.2 12634.4

Voice and Data Subscribers 29.24 82.93 233.85 660.56 1,875.93 4,155.07 Source: Juniper Research


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Figure 7-11: Mobile WiMAX Subscribers Voice/Data Split ('000) – Developing World Forecast 2007 – 2012


7.5 Global Mobile WiMAX Data & Voice Revenue Forecasts Unlike the number of subscribers for voice and data services, the revenues earned from each set of subscribers, primarily data subscribers and subscribers paying extra for additional voice services can be summed up. This section of charts shows the total and split revenue earned from data services and voice services.

The voice services revenue is taken from Table 7.13 and data services revenue is taken from Table 7.4. The total value for Mobile WiMAX services globally will reach $8.14bn in 2012 and will be dominated by data services.


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Figure 7-12: Value of Mobile WiMAX Data & Voice Services Market ($m) – Global Forecast 2007 – 2012

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Voice ServicesData Services


Table 7-16: Value of Mobile WiMAX Data & Voice Services Market ($m) – Global Forecast 2007 – 2012

2007 2008 2009 2010 2011 2012

Voice Services $4.9 $13.9 $39.3 $111.7 $319.3 $691.9

Data Services $599.4 $1,080.8 $1,878.3 $3,041.7 $4,747.9 $7,452.8

Total Value $604.3 $1,094.7 $1,917.5 $3,153.4 $5,067.2 $8,144.7



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8 WiMAX : Security

8.1 Introduction The issue of security is important for the proliferation of WiMAX especially in enterprise environments where there is an increasing need for secure transmissions and encrypted data. Security is a lesser known topic of discussion when it comes to WiMAX because the focus of WiMAX is on differentiating itself from traditional technologies like WiFi, 3G, DSL and Cable in terms of performance and costs. Security takes a back seat when speaking of performance and costs. This chapter is focused on the various levels of security that have been built into the WiMAX standard from the ground-up, ensuring solid security features that have been missing in the earlier WiFi standards. WiMAX has taken an approach to have a secure standard from the first release itself and to continue building upon the security features in future releases. This chapter will explore security co-processor solutions and will focus on the speed enhancements that can be derived from using a security co-processor. There is also coverage of vendors that have co-processor solutions for security especially being used with WiMAX solutions. The security that has been built into the standard is present at the lower levels of the network stack, primarily at the MAC (Media Access Control) layer. There is the need for security built in at the higher levels like the application layer, when it comes to supporting large public WiFi networks and VoIP applications. There will be a discussion on this specific issue and the limited availability of solutions in this niche area.

8.2 Security Features in WiMAX There is a broad array of security features that have been incorporated into the WiMAX standard. These include encryption features like Advanced Encryption Standard (AES) and DES3, Public Key Infrastructure (PKI) like X.509 certificates; Counter Mode with Cipher block chaining Message authentication code Protocol (CCMP) and the DOCSIS inspired BPI+ security protocol that specifies a key authentication method.


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8.2.1 Encryption: DES3 and AES

Encryption is one of the main features in any security system. Encryption in simple terms means converting the original data into coded characters or symbols that can be then transmitted across the network. This prevents anyone who is snooping onto the data during transmission to read the contents of the data and make sense of it. This is the very basic form of security that one can have in a system. There is a need for the base station and the subscriber unit to have encrypted communications to prevent eavesdropping.

Data Encryption Standard (DES) is one of the first forms of encryption that was established in 1976 and was termed as a standard. The DES is a cipher technique that uses an algorithm to perform encryption and decryption in a series of steps. This is a block cipher, which means that it consists of two paired algorithms, one of encryption and the other for decryption. There are two inputs that go into a block cipher as seen in the figure.

Figure 8-1: Block Cipher Encryption

Source: Wikipedia

These two inputs are a secret key and the ciphertext. It is also a symmetric key algorithm, which means that the sender and the receiver need to have a shared key before the data is sent. Thus the same key is used to encrypt the data by the sender and is used by the receiver to decrypt the data. Although there has been extensive use of DES in computer systems, there has been criticism of the method primarily because of the short key that is used, which is 56 bits long. The short length of the key means that using a brute force method, there is a possibility to break the key in a short period of time. The last report of a brute force attack on DES was said to have lasted a day. The vulnerability of DES led to the release of triple DES or DES3. It is also known as TDES. This version of DES uses three keys of 56 bits each to have a total key length of 168 bits. The issue with TDES is that it is slow in terms of computer performance.

The successor to the DES legacy is Advanced Encryption Standard (AES). The AES also is a block cipher but uses key lengths of 128, 192 and 256 bits. The block sizes are of 128 bits; this was adopted in 2001 as the replacement for the DES and TDES standards. The standard is so powerful that it is being used by the NSA to protect classified information up to the TOP SECRET level.


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Figure 8-2: CBC Mode

Source: Cisco

The initial WiMAX standard of 802.16a was based on the DES standard. There has been a recent addition of 3DES and AES to these encryption standards that give it a solid defence against encryption attacks. There are a variety of ways that encryption standards can be implemented in. These include DES-CBC and AES-CCM. In the CBC (Cipher Block Chaining) mode there is a feedback from the encryption of the previous block to encrypting the next block. In this way, the various steps that take place in a DES mechanism are linked to each other or chained. For the more advanced AES standard there is the Counter with CBC MAC (CCM). This provides both authentication and encryption in a single key. This helps in reducing memory as key management is simplified. In the case of feedback modes, the 802.16-2004 standard has incorporated both DES-CBC and AES-CCM for use by operators based on the requirements.

8.2.2 Authentication: X.509 Certificates and EAP

The Public Key Infrastructure (PKI) forms an important part of a security system. This controls the distribution of keys and the binding of keys to users. PKI helps users to establish authentication and use the public keys to encrypt information being passed between each other. In the X.509 infrastructure, there is a certificate issuing authority, which is usually a third party and is known as the CA (Certificate Authority). The CA issues a public key certificate, which links a key to a particular person or organisation. The CA forms an integral part of the PKI and is usually server software. In a typical authentication example, when a user sends data, he signs it using his private key. The receiver can check the signature using his public key that is contained in the certificate that has been issued by the CA. Thus the sender is authenticated without the need of exchanging information in advance. In the case of WiMAX, each CPE (Customer Premise Equipment) comes installed with a certificate that links a key to the equipment. The equipment manufacturer provides this certificate.


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Figure 8-3: EAP (Extensible Authentication Protocol) Used in a WLAN

Source: NetworkWorld

There is another authentication framework known as Extensible Authentication Protocol (EAP). This is generally used in wireless systems. There are multiple functions defined within the framework, which can be used as a desired authentication mechanism. At present there are around 40 different schemes defined as a part of EAP. The scheme that is used in WiMAX is the EAP-TLS scheme. The EAP has been a very well recognised and adopted standard by wireless vendors and is supported in multiple wireless equipment. The strength of EAP-TLS comes from the fact that there is a need for a server side certificate as well as a client side certificate. The client side certificate is usually stored on the client end or can be also stored on a removable device like a smart card. There is the downside of handling client certificates in the PKI.

8.3 Security Processors With the advanced computational complexity that accompanies cryptographic algorithms and the increasing load on chipsets with increasing numbers of users that need to be processed simultaneously, the need for a secondary processor is becoming a necessity. These security coprocessors are used in conjunction with chipsets and are able to provide performance enhancements in terms of speed and latency reduction. These coprocessor solutions are usually built for base stations because they possess a larger need for speed up due to bottlenecks in terms of the number of users that can be handled at a given amount of time. The base stations are considered as aggregation points in a wireless network and deal directly with the air link to the CPE.


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Figure 8-4: Security Processor Configuration

Source: Hifn

The above diagram shows a Hifn security processor, which works together with a WiMAX CPU or an Application Specific Integrated Circuit (ASIC) chipset to speed up cryptographic algorithms. It allows for WiMAX processing to be done at line speeds. The main reason for the need for offloading security processing is the addition of AES encryption apart from DES encryption. This adds extra processing overheads to the CPU processor apart from the usual protocol that it needs to work on.

8.3.1 WiMAX Security Processor: Vendors

i. Cavium Networks

a. The Company

Cavium Networks was founded in 2001 and is headquartered in Mountain View, California. It is a semiconductor solutions provider for network and content security services. Their products include security processors and accelerator boards. It has been funded with around US$62m from investors that include venture capital firms like Menlo Ventures, Alliance Ventures, Diamondhead Ventures and Neocarta Ventures. It employs around 100 employees.


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b. Products

The products that support WiMAX base stations are the NITROX and NITROX II solutions and WiMAX CPE equipment is supported by the NITROX Soho Secure Communications Processor (SCP) solution. Although these solutions are meant to support the Fixed WiMAX 802.16-2004 standard they can also be extended to Mobile WiMAX solutions because of the programmable architecture of Cavium. There is a separate software development kit that helps to integrate these solutions with existing chipsets. The family of NITROX and NITROX II have different performance ranges and depending on the need of an OEM, Cavium is able to provide a specific targeted solution. They differ in terms of speeds ranging from 75 Mbps to multi Gbps. There are around 24 members in the NITROX and NITROX II families, NITROX II being the advanced product range. The NITROX family can handle maximum of two channels, each 75 Mbps. On the other hand, the NITROX II family can handle upto 16-sector base stations. The NITROX Soho Secure Communications Processor range consists of nine members, which have performance speeds of 10 Mbps to 150 Mbps. These consist of a MIPS32 processor with 16KB cache, powerful security engines, 3x10/100 Ethernet MAC, 32-bit PCI interface and general purpose I/Os. One of the major advantages with the CPE targeted solutions is that they come with a media gateway. The design of the Soho chip supports NAT routing and DiffServ, which gives it the potential to become a media gateway. The encryption algorithms that are supported in the Cavium family include symmetric algorithms like AES-256 (CTR, CBC, XCBC, ECB), DES, 3DES,ARC4 and asymmetric algorithms like RSA (Rivest Shamir Adleman (security encryption algorithm)), Diffie-Hellman and authentication protocols like SHA and MD5.

c. OEM Client

Next-G is one WiMAX base station OEM that is using the Cavium solution. It is using the NITROX II solution in its 16 sector Horizon series base station.

ii. Hifn

Juniper Research spoke with Hank Cohen, Product Marketing Manager and Ian Colcomb, Wireless Expert at Hifn

a. The Company

Hifn is a networking solutions company headquartered in Los Gatos, California. Its products include chips and software for network infrastructure and storage providers. It was founded in 1996 and became a public company in 1998. It trades at the NASDAQ with the HIFN symbol. IN 2000, Hifn acquired Apptitude which provided solutions for Internet traffic analysis for network infrastructure devices. It has proprietary compression and packet processing and flow classification technologies. Hifn employs around 125 employees and has sales offices in Massachusetts and the UK.

b. Products

Hifn security solutions for WiMAX are focused on base stations. The two products that it is targeting for WiMAX OEMs are the 7955 and 7956 security processors. The 7955 processor is able to handle 1500 byte sized packets at 200 Mbps. The key processing is the AES-CCM


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encryption and decryption process. The 7956 processor can handle higher speeds of 275 Mbps. The 795x family has 32kb of internal memory of which 4kb are dedicated to Public Key Management. They have a flexible bus interface, which can connect to processors using the PCI 2.2, PowerQuicc I or PowerQuicc II bus. It is a 144-pin solution, which also has support for IPSec and VPN security functions. The power consumption is less than 1W. The family can handle single channel base stations as well as multiple channel base stations.

c. OEM Client

The WiMAX OEM provider Airspan announced in December 2004 that it would be using the Hifn 7955 security processor for its Fixed WiMAX 802.16-2004 base station. In April 2005, Picochip also announced that it would be using the 7955 processor from Hifn for its 802.16e reference design base stations.

iii. SafeNet

a. The Company

SafeNet is a security solutions company that was founded in 1983. Its solutions include encryption products in hardware, software, intellectual property and chips. Within security it covers solutions for WAN, IPSec, VPN, SSL, PKI deployment and Digital Rights Management (DRM). It was known until 2000 as Information Resource Engineering (IRE). In 2002 it acquired Securealink BV in Netherlands and in 2003 it acquired Cylink Corporation. In 2004 SafeNet merged with Rainbow Technologies, which makes it the seventh largest information security company. SafeNet owns around 43 patents in the field of information security. It has around 800 employees and US$ 200m in annual revenue. It is a publicly traded company and is listed on the NASDAQ as SFNT.

b. Products

SafeNet has a large range of security processors known as SafeXcel. The different ranges of processors include the SafeXcel-1141 and the SafeXcel-1741 that are targeted at the low-end and the medium-low end security appliance OEMs respectively. Both these processors support DES, 3DES, AES, SHA-1, MD5, HMAC, Public-Key Acceleration, True Random Number Generation, which are important for WiMAX equipment security. The SafeXcel 184* series of processors are high-end processors and can handle 1-3 Gbps performance. Both these series of processors are suitable for WiMAX equipment, both base stations and CPE equipment. They have the standard features of supporting VPN and IPSec security and PCI-X, SPI-3 and external memory interfaces. Apart from cryptographic offloads these processors also support key management through a public key 32bit RISC processor. They come with a QuicSec software toolkit to enable the security processors to be integrated with the host ASIC or CPU platforms. It implements IPSec security layer functionality apart from IKE authentication and X.509 authentication.

c. OEM Client

The WiMAX OEM (Original Equipment Manufacturer) vendor Wavesat announced in July 2005 that it was introducing the SafeXcel-1141 security coprocessor in its WaveSat EvolutiveTM WiMAX DM256 reference design. The WaveSat reference design is used for both CPEs and base stations.


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iv. Elliptic Semiconductor

a. The Company

Elliptic Semiconductor is a Silicon IP (SIP) Cores provider for security communication solutions for TCP/IP, IPSec, SSL for low-power, low-speed connections up to multi gigabit per second throughput connections. The company is headquartered in Ottawa, Canada. The company has secured around US$ 2m of funding from Business Development Bank of Canada (BDC), Venture Coaches, Axis Capital Corporation.

b. Products

Elliptic Semiconductor has two cores that are targeted at WiMAX SOC solutions. The first one is the LLP-01 PDU Processor for 802.16/WiMAX. This is a link layer core, which helps in processing cryptographic functions. This core is an inline-processing engine, which captures traffic through a FIFO and then operates on them as per the standard. It supports AES-CCM and AES-CBC operations and within AES it supports 128 bit keys. It can be implemented in both base station and CPE SOCs. The advantage of the core is that it can be inserted seamlessly over the WiMAX MAC layer. The throughput depends on the clock speed of the chip and the encryption scheme used but is generally of the order of 200 Mbps.

Figure 8-5: Block Diagram of Elliptic Semiconductor LLP-01 Core

Source: Elliptic Semiconductor

The second core that is specifically targeted at WiMAX is the CLP-28 AES Core for WiMAX. This core is compliant with the NIST standard AES and supports AES in its different forms like AES-CBC, AES-CTR, AES-CCM. It supports 128 bit keys but can also be configured to support 192 and 256 bit keys. It has optional interfaces of FIFO and dual port RAM. The throughput


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depends on the clock speeds and the AES mode and can vary from 125 Mbps to 220 Mbps for AES-CCM and from 238 Mbps to 431 Mbps for AES-CTR, AES-CBC and AES–ECB. There is the option of using key expanders based on the customer needs. This varied from key expansion being done in the embedded processor and using a fixed key to Fast Key Generators being used for high speed applications.

c. OEM Client

Juniper Research has been unable to get a list of WiMAX equipment vendors that are using Elliptic semiconductors WiMAX cores.

8.4 Security for WiMAX Applications

8.4.1 Application Layer Security

The nature of a WiMAX network and the openness of wireless systems make them vulnerable to attacks specifically meant to target the internal networks of service providers. Apart from the in-built encryption and authentication security that is present in the WiMAX standard, there is a growing need for software based security solutions like firewalls, VPNs, IKE tunnelling and Intrusion prevention systems (IPS), which are present at the application layer.

Figure 8-6: Application Layer Security Infrastructure

Source: RFDesign

The above diagram shows that extra security infrastructure resides at the application layer. There needs to be a distinction in the Layer 2 security, which has been described in the


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previous sections and Application layer security. Additional measures need to be put in place to ensure that users do not get access to the internal networks of the service providers and network operators.

Figure 8-7: Securing the Perimeter in a WiMAX Network

Source: wimax.com; NetSieben

The segment approach prevents unauthorised users from entering networks that they are not allowed to enter. Apart from firewalls, there are additional methods like incorporating ‘per policy’ authentication methods using HTTP, TELNET or FTP or even use RADIUS servers for authentication and the use of IDS (Intrusion detection systems). There is a possibility that hackers are able to attack the application layer itself and gather sensitive information from HTML tags for example. These kinds of attacks cannot be stopped by firewalls because they are designed to look like normal traffic. There are multiple types of attacks like SQL injection, command execution to altering cookies. These can be prevented by introducing application layer scanners or the use of web application firewalls.

There is also the threat that VoIP could be used to compromise the security of a system. Hackers could initiate the download of configuration settings or even spoof the address of an intermediary router to allow all traffic to get deviated and lead to a malicious attack. The low latency nature of VoIP and videoconferencing applications make them very sensitive to firewalls and gateways introducing processing delays in the packets. Thus application level gateways that are installed to prevent attacks at the application layer should not affect the QoS of the applications. These firewalls are usually part of the gateways and IP/PBX systems. There are additional threats from the SIP protocols that are used. The signalling servers are vulnerable to attack. Thus infrastructure being installed by equipment vendors and OEMs should understand each of these vulnerabilities. These include client impersonation using SIP, server impersonation through SIP, message tampering using Session Definition Protocols (SDP), Denial of Service (DoS) attacks using signalling. Session Border Control (SBC) can prevent most of the signalling threats. The SBC allows for application of traffic management rules and policing of traffic apart from traffic shaping and ensuring QoS.

Thus it becomes very important for software to be integrated with the hardware devices in a WiMAX network to make it secure. The ideal situation would be to have a standardised software platform that can support all of the features discussed and be ready to deploy and reduce time to market for an OEM.


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8.4.2 Network Layer Security

Apart from L2 and Application layer security there is the middle layer which is the Network Layer in an OSI stack. This tiered approach is important to secure applications like VoIP and VoD. The converged network needs to have support for IPv4 and the dual IPv4/IPv6 TCP/IP stacks, which becomes more important in the Mobile WiMAX case. Interpeak is one security solutions company that has partnered with Adaptix, which is a WiMAX OEM to integrate the Adaptix link layer solution with the network layer


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9 WiMAX : Value-Chain Analysis

9.1 The WiMAX Value-Chain To understand the impact of WiMAX on the telecom industry we need to analyse the value chain and highlight what WiMAX means to each member in the value chain. This analysis hopes to individually look at each member of the value chain and point out the highlights, observations, benefits and issues that the member needs to pay attention to while it is evaluating WiMAX as a technology and a business opportunity. WiMAX is enabling new business models and helping each member in the value chain to maximise their role in the development and adoption of wireless broadband technology. There is a need to educate each member of the value chain to create a healthy ecosystem for the technology to fulfil demand and generate equivalent supply of equipment. The previous chapters have focused on technology, market applications, frequency regulations, market segments and security issues. This chapter will be the conclusion to this report, trying to summarise the key ‘so-what’s’ of the technology and will segment them by value chain member. This presents a logical summary and analysis of the technology and hopes to be a useful tool for each value chain member. This chapter will primarily look at Fixed WiMAX within the Mobile WiMAX context.

Figure 9-1: WiMAX Value Chain


Silicon Vendor

OEM/ODM

Wholesale Service Provider/ Network Operator

Retail Service

Provider


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9.1.1 Silicon Vendors

The silicon vendors are the first link in the value chain. They are responsible for producing the silicon chipsets and reference designs that are the building blocks of any WiMAX equipment, whether it is a base station or a CPE. Reference designs are guidelines or architectural layouts of the chipset solutions or Application Specific Integrated Circuit (ASIC) solutions. Silicon vendors are key to translating the standard as ratified by the IEEE group and convert it to a working semiconductor solution. In general a silicon vendor provides both the hardware as well as the software that is needed to have a working solution for WiMAX. The differentiating factor for WiMAX silicon vendors is in the additional features that are incorporated in the silicon implementations of WiMAX. Apart from the minimum set of features, silicon vendors incorporate features that can improve system performance. The silicon vendor could have their own fabrication facilities like Intel or be a fables semiconductor company like Sequans or Beceem. The majority of the silicon vendors for WiMAX are working on the PHY and MAC for the WiMAX standard. There are a few vendors however who are specifically working on the RF front end of WiMAX.

9.1.2 Original Equipment Manufacturer (OEM)/Original Device Manufacturer (ODM)

OEM/ODMs are the second link in the WiMAX value chain and often use reference designs or silicon hardware and software solutions to produce the end devices like CPEs (Customer Premise Equipment) or base station equipment for WiMAX. They are responsible for the form factors that could be used for WiMAX, especially in the CPE case. They are the link between the silicon vendors and the network operators/service providers and are often seen as driving the balance between the supply and demand side of the value chain. They are key members of the value chain as they can foresee the demand for WiMAX from the network operators and service providers that would be installing equipment and operating service models. They also have a good understanding of the supply side of the equation due to their links with the silicon vendors that are converting the WiMAX standard on paper to workable solutions.

9.1.3 Wholesale Service Provider/Network Operator

The wholesale service provider is also the network operator that installs the equipment and the network infrastructure to support WiMAX. It invests in deploying large networks and then reselling those parts of the network to third party providers who focus on niche markets. They also have a portion of the network that they use for direct selling to the customer, which means that they could also be competitors to the resellers that operate on their networks. They form an important part of the value chain as they are directly linked to the customer demand for WiMAX and they build out networks based on the potential demand that they view in certain markets. They have an overall view of the demand side of the market and work with the supply side of the market, which consists of the OEM/ODM (Original Device Manufacturer/Original Equipment Manufacturer) and silicon vendors to improve WiMAX products and features.


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9.1.4 Retail Service Provider

Retail service providers are either small scale service providers who install WiMAX base stations and network infrastructure on a small as compared to wholesale providers. They also lease network infrastructure from wholesale providers to offer WiMAX services to the end customer. They form the interface between the customer and the industry and are in touch with the customer demands. They are at the forefront of adoption of WiMAX because they indeed drive the customers to adopt the technology. Retail Service providers are the ones that have to implement business models and are interested in increasing their customer base as well as improving customer service.

For the purposes of analysis, Juniper Research considers Wholesale and Retail Service providers as a single entity.

9.2 Analysis

9.2.1 Silicon Vendors

i. Intel’s Focus: Fixed or Mobile WiMAX?

Intel is backing Fixed WiMAX but has a larger focus on Mobile WiMAX and laptop integrated chips.

Although Intel is one of the primary silicon vendors backing Fixed WiMAX, it has a larger focus on Mobile WiMAX than Fixed WiMAX. According to Intel’s roadmap they believe that the CPE will move from modem type solutions to data cards and will finally get integrated into laptop chipsets. This integration will happen with Mobile WiMAX and will ultimately eliminate CPE costs. The initial first wave of WiMAX 802.16d-2004 certifications does not contain the Intel Rosedale chipset, although the future certification rounds will have the Intel chips getting certified. This points to the fact that Intel is focusing on the Mobile WiMAX chipset and will aim at being the first to get certified with Mobile WiMAX rather than concentrate on Fixed WiMAX. Intel has also signed a deal with Clearwire and Sprint in the US for Mobile WiMAX solutions. Clearwire and Sprint own majority of the spectrum in the 2.5 GHz band and would be key operators for the success of Mobile WiMAX in the US. This is important to note because Mobile WiMAX has a lot of interest in the developed world as opposed to Fixed WiMAX.

ii. What are the Focus Areas for WiMAX Silicon Start-ups?


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WiMAX silicon start-ups have competition with the likes of Intel and Fujitsu and are thus concentrating their efforts on two key areas of development for WiMAX silicon: They have a focus on low power CPE equipment and micro/pico base stations, which would mean larger volumes than macro base stations as well as lower development costs. Sequans is one of the start up companies that is concentrating on providing low power CPEs and micro base stations. Wavesat is another company in a start up mode that has focused specifically on PHY chips for WiMAX and has claimed that it can support US$ 2000 micro base stations by using their base band chip along with a processor and RF chip. Wavesat also concentrates on providing PHY components for CPE equipment. Telecis is another silicon startup company that is solely concentrating on WiMAX SoC’s for CPE devices. Beceem, another silicon startup has introduced its first Mobile WiMAX MAC, baseband and integrated radio chipset specifically meant for Mobile WiMAX CPE devices.

iii. Do Mobile WiMAX Silicon Vendors See An Awareness In The Market?

Mobile WiMAX silicon vendors will need to play the role of educating operators initially.

Due to the limited number of Mobile WiMAX OEMs at the moment, there is a dual role for Mobile WiMAX silicon vendors. This includes development of Mobile WiMAX chipsets as well as educating network operators about the advantages of mobility in wireless broadband. This role would eventually be taken up by the OEMs when the ecosystem allows for a larger number of OEMs and the network operators.

iv. What Are The Opportunity Areas Within WiMAX Silicon?

Smart Antenna and RF chips are the big opportunity areas in WiMAX silicon.

There is a large opportunity for silicon vendors in the areas of RF for WiMAX. The majority of silicon vendors focus on the MAC (Media Access Control) and the PHY (Physical (layer)) portions of the silicon or are dealing with SoC (System on Chip) for WiMAX. The silicon vendors that are focusing on the RF side of WiMAX including Sierra Monolithics, Atmel Corporation, Texas Instruments, SiGe and RFMagic. The other area where silicon vendors could fill a large gap is the area of smart antennas again related to the radio side if the chip. Smart Antennas are applicable to Mobile WiMAX and allow for improved performance for antennas, which would help OEMs to differentiate their products and allow for better antenna coverage.

9.2.2 OEM/ODMs

i. What Form Factors Can We Expect For WiMAX CPEs

As opposed to common belief, WiMAX OEMs are trying to build products in multiple form factors, rather than just embed them in laptops or have WiMAX PC cards. WiMAX is being targeted to go into PDAs (Personal Digital Assistants), iPods, USB cards, gaming consoles, palm handhelds, cell phones and smartphones. With regards to Mobile WiMAX, there is the work going on to produce a CPE device that could work as a phone and then fit into a dongle at home or at the office, which would allow the user to use it as a fixed wireless modem. WiMAX enables multiple form factors and allows for interesting CPE concepts that could enable innovative business models for operators.


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ii. Is There A Mobile WiMAX Strategy For Fixed WiMAX OEMs?

Fixed WiMAX OEMs are working on Mobile WiMAX migration path.

The advantages and performance of Mobile WiMAX supersedes Fixed WiMAX and this is being evaluated and being acted upon by the Fixed WiMAX vendors. All the Fixed WiMAX vendors have a migration path or are in the process of working on a migration path to Mobile WiMAX in their products. The WiMAX forum has established a working group to establish a framework to allow for migration of Fixed WiMAX products to Mobile WiMAX. Although this does not mean that all the Fixed WiMAX products will transition to Mobile WiMAX, OEM clients will have the option of switching to Mobile WiMAX.

iii. How Will IPR Costs Compare To Rival Technologies?

IPR costs for WiMAX will be lower than rival technologies like Flash OFDM and UMTS-TDD.

The Intellectual Property for WiMAX includes IP in the areas of OFDM (Orthogonal Frequency Division Multiplexing) and MIMO (Multiple Input Multiple Output). Multiple OEM vendors like Adaptix, Motorola, Nortel and others own patents in these areas. There is a healthy ecosystem of cross licensing of OFDM and MIMO patents. When compared to technologies like CDMA, Flash OFDM and UMTS TDD (Universal Mobile Telecommunications System – Time Division Duplexing), which have IP (Internet Protocol) being owned by a single entity, WiMAX offers a low cost and an almost royalty-free IPR environment. This is one of the key advantages to having an industry wide, consensus driven product in WiMAX. This is advantageous in terms of costs and is flexible in terms of having industry wide ownership rather than being controlled by a single corporation.

iii. Are OEMs Religious About WiMAX?

OEM vendors are bullish on OFDM/OFDMA rather than WiMAX

OEMs believe that WiMAX has a strong future because it is based on OFDM/OFDMA. They believe that OFDM and OFDMA, which forms the basis for Fixed and Mobile WiMAX, are responsible for the performance and cost benefits. They do not feel religious about WiMAX as a technology and would like to remain flexible to other technologies in the future. They believe that WiMAX is well marketed by the WiMAX forum and Intel, which allows them to focus on performance enhancements and differentiation of their products. Nortel, Fujitsu, Adaptix, Motorola and other OEMs own OFDM/OFDMA patents which has led them to understand the true strength behind WiMAX.

iv. Where Does the ‘Dual Mode’ Opportunity Lie For WiMAX?

OEMs see a larger opportunity for WiFi and Mobile WiMAX dual mode CPEs rather than for WiMAX and 3G dual mode products

Although OEMs are well aware of the complimentary nature of WiMAX and 3G they are also aware of the technical challenges that accompany a dual mode WiMAX/3G CPE. There are limitations with power and the fact that the radio front end as well as the MAC for 3G and WiMAX is completely different. This would call for separate 3G and WiMAX chipsets, which would increase the cost, size and power consumption of the CPE form factor. There is in fact a larger interest in a dual mode WiMAX and WiFi CPE solution that could work indoors with WiFi and outdoors and in a mobile environment on WiMAX. This combination has lesser


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complications than a 3G and WiMAX product. The target market for a dual mode WiMAX and WiFi product will have a larger target market than a dual mode WiMAX and 3G product because of the large installed base of WiFi across the world as compared to a patchy installed base for 3G.

9.2.3 Network Operator/Service Provider (NO/SP)

i. Which Business Models Can WiMAX Enable?

WiMAX enables multiple business models apart from 3G operators offering complimentary WiMAX coverage

The strength of WiMAX can be seen in the numerous business models that it can enable. This is not only limited to 3G operators who could use WiMAX to offer complimentary services on their network. This is just one of the many business models that could be enabled. The others include tier II and tier III wireless operators trying to leapfrog 3G and move to Mobile WiMAX in order to compete in terms of services with tier I operators. In developed regions, this would allow these lower tier operators to save on large 3G infrastructure and spectrum costs and offer better services than tier 1 operators. In developing countries, lower tier operators could opt for Mobile WiMAX and allow them to compete with tier 1 operators that have not yet moved to 3G, but have a larger customer base. There is also the possibility of cellular operators offering wireless Internet services being bundled with their cellular offering. Similarly satellite cable providers could use WiMAX for wireless Internet services, which could be easily bundled with their satellite cable services, usually offered in remote or low-density areas.

ii. What Are Operators Looking For Initially In WiMAX?

Operators are interested in performance of WiMAX in the real world.

Many NO/SPs understand the cost benefits of WiMAX and the advantages that a standardised, certified technology would bring to their cost models. They are more interested in evaluating the performance of WiMAX in the real world. This is usually done by conducting trials of the technology and taking measurements and noting indoor vs outdoor performance and calculating important network parameters like base station density, LOS and NLOS performance. This is usually done in geographically diverse environments. The NO/SPs test the OEM equipment more rigorously than what is done during the certification process. This allows both the NO/SP as well as the OEM to be convinced that the technology has a suitable performance in the real world. The main advantages that NO/SPs derive out of using certified equipment is more with regards to interoperability rather than conformance testing.

iii. How Does Software Defined Radio Help A WiMAX Operator?

SDR solutions for WiMAX increase CAPEX but reduce OPEX for Network Operators.

Software Defined Radio (SDR) is meant to reduce the OPEX of network operators because it allows for upgrades in the form of software patches. This saves the NO/SPs from replacing equipment when there is a revision to the WiMAX standard or in the OEM equipment. However the cost for SDR equipment is higher than non-SDR equipment because of the development costs involved for the OEMs. SDR for WiMAX is only defined for the MAC layer


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and is technically challenging to do for the radio layer. Thus in terms of equipment supporting multiple WiMAX frequencies, SDR helps only partially by assisting with channel spacing. The advantages of SDR will thus be realised in full when it does support the radio layer, but in the meantime, it will help the NO/SP in saving OPEX.

iv. Do WiMAX Strategies Differ With Size Of Operator?

Larger operators opting for Mobile WiMAX, while smaller operators jumping on Fixed WiMAX

There is a trend in terms of adoption of WiMAX amongst NO/SPs. The larger operators like Sprint, Clearwire, BT, France Telecom are opting for Mobile WiMAX, This is because of the larger scale of network infrastructure that they would have to transition in case they opted for Fixed WiMAX. The costs and the effort involved are significant for transition and thus the large operators would rather wait for Mobile WiMAX. On the other hand, smaller operators like Towerstream, Covad, Transaria, Telabria are using Fixed WiMAX to capture market share and would like to take advantage of the time window between Fixed WiMAX certified equipment and Mobile Wimax certified equipment. The majority of NO/SPs that are planning on Fixed WiMAX rollouts have pre-WiMAX equipment already installed and would just transition a portion of their equipment from pre-WiMAX to Fixed WiMAX certified and allow for additional lines to be based on certified WiMAX. In case they do decide to switch to Mobile WiMAX, the transition will most probably be simplified by their OEM vendors.

v. What Cost Metrics Do Operators Use In Evaluating WiMAX?

Operators see advantages with lower cost per bit but interested in other cost metrics when comparing WiMAX to DSL/Cable or 3G

The cost metric that is being used by OEMs, NO/SPs and Silicon vendors in comparing WiMAX with other technologies like 3G and DSL/Cable is cost per bit. This usually means the CAPEX cost per bit, which means that it gives the total capital spent in installing infrastructure to support a certain amount of bandwidth. The OPEX cost per bit is a very complicated metric and few people in the industry know how to calculate it and remain away from this metric. Apart from using cost per bit, another metric being used is the total dollar invested by revenues earned. This also includes the total CAPEX costs, but compares it against the revenue earned rather than the bandwidth supported. This gives a more realistic estimate in terms of margins, while the cost per bit explains more in terms of capacity supported and the costs of that capacity. One metric allows you to measure ROI and the other allows you to calculate the cost that could be charged per bit. Thus although vendors are marketing WiMAX using cost per bit as a factor, operators would like to see other metrics being used in the comparisons.

vi. What Are The Strategies Of Fixed Line Operators With Regards To Mobile WiMAX?

Fixed Internet providers are planning to use Mobile WiMAX are wary of competing with incumbent mobile carriers.

Although one of the many business models that Mobile WiMAX enables is that of allowing Internet providers to use Mobile WiMAX for offering mobile services, the general view of Fixed Internet providers who are considering Mobile WiMAX is that they would not like to compete against the incumbent mobile operators. These Fixed Wireless Internet providers are


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usually smaller in size to the mobile operators. They would not like to encroach upon the territory of the multi billion dollar giants because they do not feel that they have muscle to compete against them, although WiMAX offers them the opportunity to do so. They would rather stick to their market of broadband Internet where they are comfortable and have a good understanding of the market. This proves that although WiMAX is enabling a number of business models, it is not necessary that each one of them is practical enough to be implemented.


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Appendix 1 – Web Addresses for Companies Included Name Web Address

Adaptix www.adaptix.com

Alcatel www.alcatel.co.uk

AT&T www.att.com

Beceem Communications www.beceem.com

BT Mobile www.btmobile.bt.com

Cavium Networks www.cavium.com

Cisco www.cisco.com

Clearwire www.clearwire.com

Elliptic Semiconductor www.ellipticsemi.com

Ericsson www.ericsson.com

Flarion Technologies www.flarion.com

Fujitsu www.fujitsu.com

Hifn www.hifn.copm

Intel www.intel.com

Motorola www.motorola.com

Navini Networks www.navini.com

Nokia www.nokia.com

Nortel www.nortel.com

Orb www.orb.com

Qualcomm www.qualcomm.com

SafeNet www.safenet.com

Samsung www.samsung.com

Sequans www.sequans.com

SK Telecom www.sktelecom.com

Sprint www.sprint.com

Wavesat www.wavesat.com


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