WiMax versus HSDPA in SA
WiMax was once seen as the answer to provisioning broadband in areas with poor fixed line penetration, but the hype has now dissipated and the investment in many WiMax networks seem to be dwindling too. That is the case in South Africa at least.
Telkom WiMax and W-CDMA
Telkom was the first company in South Africa to launch a commercial WiMax service in June 2007. Telkom always planned to use the service as an ADSL substitute in areas where the company did not have an ADSL footprint rather than a service on its own.
In 2009 there was a ‘WiMax freeze’ while Telkom assessed the feasibility of its WiMax service, and the company recently said that while it is continuing to make the most of its existing WiMax footprint, it is not investing in additional WiMax infrastructure.
According to Telkom Wholesale’s Mike Vos investing in a W-CDMA network makes more business sense than rolling out a WiMax network. Apart from the benefits of using a W-CDMA network for mobile voice services, it is also more cost effective to provide broadband using 3G/HSDPA.
Vos explained that any new WiMax subscriber requires a technician to install the WiMax service with an outdoor antenna – an expensive exercise which means that the time taken to recuperate the investment can take a long time. The WiMax CPEs are also significantly more expensive than many 3G/HSDPA modems.
At R240 per month for a basic WiMax service it is debatable whether Telkom will be able to recover their costs within a 2 year period. Telkom’s pricing is significantly lower than what Vodacom and iBurst charge for their WiMax offerings, but since Telkom mainly uses their 512Kbps WiMax service as an ADSL replacement in areas where consumers can not get ADSL the company may be somewhat restrained in terms of pricing.
It is however clear that while Telkom has put an effective freeze on their WiMax network rollout, it is aggressively expanding their W-CDMA network. This network will be used to provide both fixed and mobile voice & data services.
iBurst & Vodacom Business WiMax
Vodacom, on behalf of WBS which holds the 2.5GHz WiMax spectrum, invested heavily in an extensive WiMax network in Cape Town and Gauteng. Vodacom Business and iBurst positioned their WiMax offerings as an assured rate Diginet replacement service, with 512Kbps and 1Mbps contended broadband services.
The initial pricing of these WiMax offerings left a lot to be desired, which resulted in poor uptake. The pricing was later lowered to make it more competitive in the market, but rumours suggest that the number of subscribers remains low.
Vodacom has also recently announced that it is considering selling its stake in WBS/iBurst to maximize its chances of getting access to 2.6GHz LTE spectrum. In its draft regulations, for the procedures and criteria for granting radio frequency spectrum licenses for competing applications, ICASA included a few criteria as to which companies can obtain licensed frequency, including that a company cannot be an affiliated to or hold more than 5% in another applicant in the same band.
Since Vodacom owns 24.9% of WBS/iBurst, which holds spectrum in the 2.6GHz band, it may eliminate Vodacom as an applicant for LTE spectrum. Vodacom said that LTE is a core component of its future network strategy, and the company is clearly seeing LTE as a more important technology to invest in than WiMax.
Other companies
Altech was previously very keen to invest in a WiMax network, and even successfully challenged the Minister of Communications and ICASA to convert all VANS licenses into I-ECNS licenses which gave them the right to self-provide. The company however recently indicated that they will not invest in a WiMax network any longer as the licensing and spectrum allocation process dragged on too long saying that the ‘WiMax ship has since sailed’.
While the WiMax hype is starting to ebb, Internet Solutions has indicated that they are still keen to roll out a WiMax network if they are allocated spectrum. iBurst is also still banking on WiMax, and has partnered with Intel to roll out WiMax products in South Africa to stimulate the adoption of the technology in SA.
Neotel recently launched its first WiMax services, offering high usage offerings aimed at the small and medium sized business market. The jury is however still out as to whether they will enjoy a better uptake than that of iBurst and Vodacom Business.
Whether WiMax will ever live up to the expectations created by companies like Intel is uncertain, but what is certain is that WiMax will have to make a particularly strong comeback if it wants to hold its own against 3G/HSDPA adoption. And with the local battle for 2.6GHz spectrum just around the corner one can expect heated debates from the LTE and WiMax supporters as to how this valuable spectrum must be handed out.
WiMax versus HSPA/LTE – comments and views
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