Chris
14-02-2005, 06:15 PM
Broadband wireless gained a bad name in the US in the late 1990s when companies such as Teligent failed spectacularly. But WiMAX is ushering in a brand new economic picture for such operators. Not only will standardization push down prices by fostering competition and volume, but spectrum suited to the technology is being auctioned cheaply in many countries in a bid to stimulate broadband - plus there is an unlicensed option. Another key factor is the falling cost of fiber backhaul, with dark fiber now within reach of midrange service providers as well as some enterprises. All this combines to put huge pressure on the financial assumptions of the 3G community, especially in Europe.
It would cost $3bn in equipment, tower, sites, labor and set-up costs to build a national US WiMAX network reaching over 90 per cent of the mainland population. This is an estimate, and a credible one, from In-Stat, and indicates how far the promise of standards, and new spectrum and backhaul options, are shifting the economics of the broadband wireless last mile.
Last time we saw major plans to build out broadband wireless on a national scale was at the turn of the century, with ill-fated ventures by the likes of Teligent, NextLink and Winstar. Comparison of likely WiMAX projects with their cost structures and business models indicates how far the industry has developed, making it a real possibility to deploy wide ranging wireless networks for a fraction of the cost of third generation cellular.
Equipment costs
Three factors are key – the promise of lower cost subscriber equipment and base stations, driven by the greater competition and commoditization that standards engender; new spectrum options in many areas, especially Europe; and the falling cost of backhaul. None of these factors was in the operator’s favor in 1999, nor was the demand for broadband well established six years ago.
The impact on equipment prices of WiMAX will really be felt from next year, once gear is certified and starts to bed down in the market. But in anticipation of the greater competition, and the bigger opportunities, broadband wireless manufacturers are already driving costs down, as Motorola’s sub-$300 pre-WiMAX Canopy subscriber equipment illustrates. The average CPE prices for LMDS gear were $4,000 a unit and a base station was $100,000, while even pre-WiMAX gear is coming down to $500 per CPE and $15,000 per base station. Teligent spent $1.3bn in a year building its initial network in selected cities but only signed up 35,500 customers by the time it filed for bankruptcy in 2001.
Line of sight was a killer for broadband wireless because of the requirement for expensive and disruptive truck roll and the difficulty of creating effective coverage in urban areas. Another reasons why costs outran revenue potential was the lack of standards. Proprietary equipment costs were high because kit had to be made separately for each operator and so vendors never got the scale to reduce prices and so take on wireline infrastructure, especially in an immature market. Equipment makers had to create complete end-to-end solutions, so there was no potential for commodity subscriber units, nor would LOS technologies permit portability, limiting the scope of the applications and their usefulness to businesses.
Read more:http://www.theregister.co.uk/2005/02/14/wimax_versus_3g/
It would cost $3bn in equipment, tower, sites, labor and set-up costs to build a national US WiMAX network reaching over 90 per cent of the mainland population. This is an estimate, and a credible one, from In-Stat, and indicates how far the promise of standards, and new spectrum and backhaul options, are shifting the economics of the broadband wireless last mile.
Last time we saw major plans to build out broadband wireless on a national scale was at the turn of the century, with ill-fated ventures by the likes of Teligent, NextLink and Winstar. Comparison of likely WiMAX projects with their cost structures and business models indicates how far the industry has developed, making it a real possibility to deploy wide ranging wireless networks for a fraction of the cost of third generation cellular.
Equipment costs
Three factors are key – the promise of lower cost subscriber equipment and base stations, driven by the greater competition and commoditization that standards engender; new spectrum options in many areas, especially Europe; and the falling cost of backhaul. None of these factors was in the operator’s favor in 1999, nor was the demand for broadband well established six years ago.
The impact on equipment prices of WiMAX will really be felt from next year, once gear is certified and starts to bed down in the market. But in anticipation of the greater competition, and the bigger opportunities, broadband wireless manufacturers are already driving costs down, as Motorola’s sub-$300 pre-WiMAX Canopy subscriber equipment illustrates. The average CPE prices for LMDS gear were $4,000 a unit and a base station was $100,000, while even pre-WiMAX gear is coming down to $500 per CPE and $15,000 per base station. Teligent spent $1.3bn in a year building its initial network in selected cities but only signed up 35,500 customers by the time it filed for bankruptcy in 2001.
Line of sight was a killer for broadband wireless because of the requirement for expensive and disruptive truck roll and the difficulty of creating effective coverage in urban areas. Another reasons why costs outran revenue potential was the lack of standards. Proprietary equipment costs were high because kit had to be made separately for each operator and so vendors never got the scale to reduce prices and so take on wireline infrastructure, especially in an immature market. Equipment makers had to create complete end-to-end solutions, so there was no potential for commodity subscriber units, nor would LOS technologies permit portability, limiting the scope of the applications and their usefulness to businesses.
Read more:http://www.theregister.co.uk/2005/02/14/wimax_versus_3g/