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.

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.