Guest Post by Babar Bhatti
Pakistan’s telecommunication industry – mobile communication in particular – has made impressive strides in the last few years after deregulation. However broadband growth in the country has been very disappointing – there are less than 100,000 broadband users in Pakistan. The open competition observed in mobile industry has not been replicated to broadband. Reasons include high prices, control of PTCL over bandwidth resources, policy issues, lack of infrastructure and legal disputes.
Enter WiMAX. Simply stated, it’s a relatively new standards-based wireless technology which is intended for large coverage areas on the order of several kilometers (instead of a few hundred meters, as is the case with Wi-Fi).
With base stations transmitting signals and some equipment at customer location, it promises fast bandwidth for both fixed locations and mobile users. In this backdrop, Pakistan made headlines in 2006 when Wateen announced plans to work with Motorola to rollout Mobile WiMAX, the largest network of its kind in the world.
Is WiMAX (Worldwide Interoperability for Microwave Access) the right technology for developing countries? In other words, will this new technology deliver the promise of broadband at affordable prices?
WiMAX comes with many theoretical advantages but its potential is yet unproven. Without getting too technical, it is purpose-built for Internet (IP) communication and is based on standards (as opposed to other proprietary solutions) endorsed by a respected world standards body, the Institute of Electrical & Electronic Engineers (IEEE)*.
In 2002 WiMAX was identified by Intel as an alternative or complement to the wireless broadband. Eventually Motorola and Intel became its biggest champions. On the other side of the camp were GSM operators of the world who saw WiMAX as a competing technology. As with any new technology, a lot of lobbying was done to make it an industry wide accepted technology. According to BusinessWeek,
“(Intel) rounded up a remarkable coalition of chip, PC, consumer electronics, networking, and software companies in an effort to radically reshape the future of broadband with what’s now called WiMAX.”
In addition to broadband Internet access, applications that are supportable with WiMAX supports multiplayer interactive gaming, streaming media, VoIP, video and teleconferencing, and media content downloads.
Even today the industry is full of discussions and debates, comparing WiMAX with technologies such as 3G. About 65 countries are experimenting with WiMAX and the results will vary by country depending on the spectrum availability, existing infrastructure and market conditions.
Coming back to Pakistan, the major initiatives include:
(1) Wateen – which is using WiMAX solution from Motorola and its cable/fiber network to offer triple play of phone, TV and broadband. Trials have been extended for over a year. Most aggressive to market their bundled solutions, they have started advertising without providing pricing and availability information.
(2) Mobilink – has formed a new entity called Link Dot Net (LDN) to focus on broadband market. WiMAX infrastructure was piloted by Mobilink in 3 cities and a recently issued RFP has generated 7 proposals to cover 5 major metros, including in-building coverage for high value business areas. Malaysia’s Dancom, which conducted early trials of WiMAX in Karachi, was acquired by Mobilink’s LDN in 2007. Mobilink also bought DV Com and its licenses.
(3) Burraq Telecom – which was acquired by ACT consortium which includes Qatar Telecom and Clearwire Corporation, an American operator providing WiMAX services in 10 countries, also plans to offer WiMAX.
The pricing has not been announced by these companies yet. Business users in Pakistan desperately need reliable broadband and are the desired customers because of their high affordability levels. Consumer market is different as demand varies by demographics’ low price is the dominating success factor.
Currently the high prices of WiMAX ‘customer premises equipment’ (CPE) make it more expensive than fiber, cable or DSL. Wateen and others are counting on the trend of falling hardware prices for WiMAX. They would have to compete with the latest PTCL broadband campaign in which PTCL has dramatically reduced DSL prices at Rs 1200 per month for 256kbps speed with a 2GB limit. As a last mile solution, WiMAX may not compete on price at this time but if WiMAX is reliable, fast and operators provide better customer service then business users may pay some premium for it, say as a replacement for leased lines.
There are other potential benefits of WiMAX such as broadband access for rural areas or for areas that have no other reasonable broadband access. This is likely to be play an important role for developing countries. WiMAX can also reduce cost of transmission lines such as backhauls from cellular sites or cross-town links. To summarize, improved access and mobility are the major advantages promised by the WiMAX camp.
What about the existing telecom infrastructure in Pakistan? For one, the GSM infrastructure in Pakistan is mainly focused on voice. 3G licenses are expected to be awarded at the end of 2007, paving the way for HSDPA – the high speed standard for GSM – in Pakistan . The existing 2 or 2.5G mobile Internet is available in selected areas and the number of users for the mobile broadband services remains low. It is yet to be seen if WiMAX, with its higher speeds** and costs, will find a large number of users in this category in Pakistan.
Spectrum is another important factor – even a show-stopper – in many countries where spectrum availability can mean all the difference. For Pakistan, PTA, the communications regulatory body has allocated spectrum in 3.5 GHz range for WiMAX. The CDMA wireless phone operators such as PTCL (Vfone) and Worldcall, which offer limited mobility, also have licenses in the 3.5GHz range and they are also likely to offer WiMAX services after getting approvals from PTA.
* Fixed and mobile WiMAX are the 2 major choices, the standards for fixed (IEEE 802.16d) were defined in 2004; the mobile standard (IEEE 802.16e) has been recently finalized. WiMAX 802.16d has limited radio features; enhanced and standardized interoperable radio performance comes with WiMAX 802.16e.
** The claimed speeds for WiMAX vary making it difficult for people to get an idea of the real-life performance they are expected to get.