Anyone who thinks that WiMAX is a satisfactory replacement for a fixed wire in delivering broadband services to Australian homes is sadly deluded. WiMAX suffers a number of disadvantages that are inherent in radio-based services.
For a start, the advertised peak speeds (such as 6Mbps) are subject to the random variations that are endemic in radio systems. The number of customers who will actually achieve these speeds in the coverage area can be relatively low. By contrast, when a fixed line is advertised as offering 6Mbps, all customers within the nominated coverage area will achieve those speeds.
Furthermore, radio is a shared medium, so all users in the same area need to share that 6Mbps (or whatever happens to be available where you are). So if you all want to watch a TV program which runs at, say, 1.5Mbps, then no more than four homes in the area will enjoy the service at the same time. WiMAX may deliver high-speed internet services today but it will struggle to deliver the rich media (audio, video as well as web pages) that are literally coming down the pipe and will grow strongly over the next few years.
In addition, as radio networks go, WiMAX is not the best choice. There are two standards which are incompatible with each other. You have a choice between “fixed WiMAX” which has been around for a couple years with little uptake. It is effectively an orphan technology because the industry is moving to a newer standard for “mobile WiMAX”.
Unfortunately this technology is completely unproven because no one has actually deployed a commercial service with this standard yet. By contrast, the technologies on which Telstra’s Next GTM network are based, 3G with HSPA (which we chose after detailed research), have more than 100 networks in service worldwide, some of which have been around for a couple of years. More importantly, most market forecasts show that globally there will be about 200m 3G users in 2010/20011 compared with about 10m WiMAX users. The scale economies are critical in supporting low-cost handsets and home units.
There’s more. The WiMAX solution proposed by Optus is intended for rural services. That is a little unfortunate because they will need to build at least four times more base stations (and hence roughly four times the cost) for the same coverage you would get from the Next GTM network. I wonder if the taxpayers of Australia are happy to be spending their dollars on an inefficient, unproven technology.
Finally, just to emphasise, a radio network does not provide the same broadband capability as a fixed network. But, if you need to deploy radio technology, and there are some places for which this is necessary, you are far better off using the same radio infrastructure that you are already using for mobile services. That way you optimise the investment across all revenue sources. That is why Telstra will use its Next GTM network to provide fixed wireless services (with speeds that are just as good, or better than, WiMAX). In addition, unlike WiMAX, the Next GTM network comes with the voice and video telephony capability built in which again improves the economic efficiency.
In summary, a rational person would need to ask why you would deploy a wireless solution when a wired network is available and where you do need to deploy a radio network, why would you deploy an inefficient, unproven one?
An IT watcher writes: The Telstra CTO you so generously gave a free kick to in yesterday’s Crikey said at least two outright lies, and several other details were cleverly fudged. Lie 1. ”no one has actually deployed a commercial service with this standard yet” Simply not true. I know of at least one: it covers the Isle of Man. I believe there’s another just across the sea in Ireland, two in London, one being set up in Milton Keynes, and several on the European mainland. Other services, while not commercial, have been set up as community services for remote parts of Canada and the US. Sure, it’s new tech. But generally, when planning for the future, you don’t use old tech. Lie 2. ”In addition, unlike WiMAX, the Next GTM network comes with the voice and video telephony capability built in” – Actually, WiMax has been specifically designed with QoS built in – a technology that makes data “play nice” with telephony. Fudge 1: ”advertised (wireless) peak speeds (such as 6Mbps) are subject to random variations… when a fixed line is advertised as offering 6Mbps, all customers within the nominated coverage area will achieve those speeds.” Literally true – because no-one would advertise something they couldn’t provide (though it’s usually subject to the small print). But it might be read by the uninitiated as saying that ADSL2+ over a phone line doesn’t degrade with distance. It does. Look at this chart, which shows exactly how quickly ADSL2+ degrades with distance from the local exchange (and creating a new exchange is much more expensive than sticking up a wireless tower). Fudge 2: ”Furthermore, radio is a shared medium, so all users in the same area need to share that 6Mbps (or whatever happens to be available where you are).” Technically true, but the 6Mbps figure is a total red herring. The fact is that a Wimax tower can be configured to speeds up and beyond 100Mbps. It just depends on how much hardware you put on a tower, how big is the backhaul pipe to the exchange, and how much power you put through it. That’s the bandwidth you’re sharing with others in the cell. So the power and bandwidth can easily be upgraded if a cell starts getting overloaded. The only reasonable point he made was about the relative economies of Wimax versus its rival technology HSPA/UTMS (supported by Ericsson, who not coincidentally have also been criticising the Opel plan). Some studies, commissioned and paid for by Wimax rivals, have cast doubts on the economy of Wimax compared to the alternatives. But this presupposes that Opel, for some bizarre reason, have got their sums horribly wrong and are going for a much more expensive technology for no apparent reason. Does this sound likely? Or is it more likely that this is just sour grapes from Telstra, whose regional Next G monopoly is under threat from government-assisted competition?
John Hampshire writes: Hugh Bradlow tells an absolute porky here: “By contrast, when a fixed line is advertised as offering 6Mbps, all customers within the nominated coverage area will achieve those speeds.” Sadly, when Telstra advertises its copper wire ADSL2+ service as 20Mbps it knows full well that’s a theoretical maximum. At least Telstra has enough sense to use 20Mbps instead of the 24Mbps claims that seem standard for other ISPs, but in either case — unless you’re living inside the phone exchange, as the saying goes — most people would be happy to crank up 8-10Mbps. This is not to mention the fact that however good your end may be, downloads speeds are controlled ultimately by the originating server’s capabilities and the weight of traffic along the chain to your machine.
Mike Smith writes: Telstra’s CTO says: “For a start, the advertised peak speeds (such as 6Mbps) are subject to the random variations that are endemic in radio systems. The number of customers who will actually achieve these speeds in the coverage area can be relatively low. By contrast, when a fixed line is advertised as offering 6Mbps, all customers within the nominated coverage area will achieve those speeds.” If you look at Telstra’s Bigpond site, you find this: “20Mbps plans not available to all customers or in all areas. Speeds based on Telstra tests. Actual speeds may be less due to a number of factors including network configuration, line quality & length, exchange type, customer premises interference, traffic and equipment. About 70% of customers on the 8Mbps plan can access speeds around 6Mbps or more. About 50% of customers on the 20Mbps plan can access speeds around 10Mbps or more. Some existing customers may need to purchase newer modems to achieve up to 20Mbps speeds.” Telstra are quite happy, then, to sell 20Mbps and deliver 10Mbps or less to 50% of their customers that subscribe to this. How is this different to WiMAX?