WiMax focuses on business

WiMax is still off in the distance as a home broadband service, held down by high-priced equipment, according to vendors and service providers, but some vendors see businesses signing up for the wireless broadband soon.

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The WiMax Forum named the first certified WiMax products on Thursday, formally kicking off a long-awaited standard technology for wireless networks that reach several miles and deliver at least 1Mbps to each subscriber. But most early client devices will need outdoor antennas and carrier installation, driving up costs beyond what a consumer service will bear, said attendees and participants at the Wireless Communications Association (WCA) International Symposium & Business Expo, in San Jose, California.

Early customer equipment will probably cost between $300 and $500, according to Dean Chang, director of product management at WiMax vendor Aperto Networks, which received certification for a product on Thursday. The sweet spot for services based on that gear is businesses and government agencies, especially in locations where the wired telecommunications network is inadequate, Chang said. Aperto is working with competitive carriers in Spain, Brazil and India, among other countries.

Consumer services will start to become more viable for those carriers later this year, when indoor subscriber devices become available for $150 to $200, he said.

An ideal early application for WiMax would be as an alternative to leased lines for businesses, Redline Communications Inc. President and Chief Executive Officer Majed Sifri said during a panel discussion at the conference. In one city, which Sifri did not name, there is a backlog of 12,000 ordered leased lines that businesses can't get because the incumbent telecommunications carrier doesn't have the resources to set them up, he said. When the incumbent does deliver a line, it can charge as much as $3,000 per month. A WiMax provider could quickly set up the equivalent of the leased-line service to those 12,000 businesses at a competitive price and make its money back in less than six months, he said.

Service providers attending the show also said WiMax would have to be strictly a business service until the price of gear for customers goes way down. Some vendors have quoted prices as high at $1,000 for customer gear with outdoor antennas, according to Keith Miller, chief executive officer of Radiuscom, a wireless service provider in Republic, Missouri. The cost would have to come down to $200 or less to make a consumer business viable, he said.

Othal Brand Jr., president and CEO of Rioplex Broadband, a carrier in McAllen, Texas, with about 1,500 consumer and business wireless customers, agreed. However, businesses can afford to pay more for their network gear, he added.

Alcatel, a giant in the DSL (digital subscriber line) business, is focusing on mobile WiMax, a different version of the technology that has more potential, according to Christophe Lerouge, program director for broadband wireless access at Alcatel Mobile, who spoke at the conference. Broadband service to consumers via fixed WiMax is not economically viable, Lerouge told reporters after his speech on Wednesday. Probably the only profitable fixed WiMax service would be to enterprises, using directional transmissions to each customer instead of blanketing a city, he said.

Working with Intel, Alcatel plans to begin shipping mobile WiMax products in the middle of this year before WiMax Forum certifications begin for that version of the technology. It will use flexible chip technology so products can be modified later if needed, Lerouge said. By the middle of 2007, Alcatel expects the price of desktop consumer devices for the mobile WiMax networks to cost less than $100.

Miller and Brand, the small service providers, remain cautious about WiMax. They said they have been promised technologies before that weren't available when advertised or didn't do what they were supposed to.

"We're dead nailed if it doesn't work," Brand said.

WiMax Forum certification would convince these service providers that a product worked, but Brand said he has been dismayed by the Forum's missed targets for approvals. In addition, it's not yet clear when there will be WiMax gear that can use spectrum available in the U.S., he said. The first round of certifications involve only products that use frequencies in the 3.5GHz band, which is not currently available to service providers in the U.S. Brand and Miller don't expect WiMax to become a realistic option for at least two years.