Wimax 4 years on….

Posted: November 9, 2009 in Uncategorized
Tags: , , , , ,

The recent launch by Imagine Telecom of their Wimax service in Ireland and all the following discussions on the fact that the service wasn’t available yet, the lack of pricing & package information as well as the misguided marketing campaign prompted me to write a blogpost about by experiences with Wimax.

imagine_this_wimax

I have been working with wireless data technologies since 1999 and by 2005 I was what one might have called an “expert” in the field of wifi. In the 1-2 years up to that time I had also started to looking at a new emerging technology called WiMax (Worldwide Interoperability for Microwave Access) going through a development & ratification process with the IEEE’s 802.16 working group.
In short WiMax is a wireless data protocol that operates on basically any frequency below 66 GHz. It is used to create a wireless data network over long(er) ranges than for instance WiFi and at a higher data rate.One of the common misconceptions is that Wimax can do both; provide a very high data rate at long distances. Claims of a 70 Mbit/s over 50km are still common in the press. Nothing is further from the truth. WiMax can do one or the other; at short distances (up to 2-3 miles) speeds will be more likely in the range of 5-7 Mbit/s. At longer ranges the data throughput will decrease the further one gets away from the base-station/mast/cell-tower. Data rates at 50 km would be in the range of kilobits and as good as useless. Another issue to consider is that we’re talking about 2-way radiowave communication here which means that the client device (your WiMax CPE) will have the “power” to transmit a signal back to the nearest mast/cell-tower.  An additional point to consider is that the available spectrum on a base-station will have to be shared with all other users; this means that the available spectrum per users will decrease in significantly in areas with a high population density. This will most likely result in a lower bandwidth per user.

All this aside Wimax still offers some great advantages over its predecessors (such as wifi). The available bandwidth & range is much higher than with preceding protocols and in addition it is a NLOS (Non-Line Of Sight) service. This means that it is not necessary for the base-station and the subscriber unit to have a direct line of sight (be able to “see” each other). Objects such as buildings, hills & trees will no longer be the obstacle that they were. There will off course be a certain level of signal degradation but the coverage area of a WiMax base-station, or more precisely the number of possible subscribers within that area will be much higher. I won’t go into detail on the two Wimax standards (802.16d & 802.16e) for fixed or mobile WiMax as this would have me digress form the point of my article even further.

wimax_wixd_101

Anyway, by the middle of 2005 I had read up a fair bit on Wimax and saw that the was potential but also that there was a lot of hype surrounding this up-and-coming technology. I frequently discussed it with other people in my profession and entered in discussions in newsgroups (I wasn’t blogging yet and there was no twitter then) I also discussed it with manufacturers of wifi hardware who were testing or exploring WiMax. Still it came as somewhat of a surprise when, in August 2005, I was approached by a group of US based investors and asked if I was interested in heading a venture to establish a pan-European WiMax provider. We did a lot of talking back and forth and I eventually agreed to do the groundwork for this venture with a possible CEO position down the line. I established a company office in Ireland and went about exploring the market, immersing myself in the technology, developing potential partnerships, writing the business-plan, drafting financial forecasts, operational plans etc. etc. What became clear to me was that there were two viable business models:

  1. A WiMax provider with our own infrastructure but where we would concentrate on providing backhaul services for other operators & alongside providing services (SaaS) across our network.
  2. Become a type of “virtual operator” by buying capacity on existing WiMax networks owned by other operators and providing services over this network

As you notice neither of these would incorporate providing “just” broadband connectivity. That choice was deliberate simply because research had shown that this wasn’t where the real revenue was made. The market was simply so competitive and margins that low that it would be extremely difficult (or require very large investment) to successfully enter as a new provider. Another issue that made me reluctant to go down the route of building our own network was the cost of a license to use the needed spectrum.

wimax license cost

But the real difference was in how we planned to market it. No big “traditional media” campaign. Instead I had planned several key actions:

  • Do not launch a service/product until it is actually available and a customer can sign up and be connected within 48 hours.
  • Create an online “buzz” prior to a launch by creating a clear online presence and actively engaging with people via the social media channels.
  • Engage with a number of “tech pioneers” and allow them to test the service and provide honest feedback. Listen to this feedback and adjust service if/when needed.

There were several other points and this is only a fraction of the overall plan but it is significant in regards to the rest of my blogpost. When I had completed all the groundwork for this venture it expired that there just wasn’t the investment power required to carry this out successfully (I indicated 100mln+ requirement at the time). So the project, and the SEC listed company, were put on the back-burner. Incidentally if there are any investors out there looking for a “WiMax operator in the box” (ready to go, SEC listed & prepped to go to the market) feel free to contact me.

Anyway, I moved on into my next venture, Airappz providing a location-based advertising service based around wifi hotspots ( both in Ireland & abroad). However I kept my finger on the pulse of Wimax. So I wasn’t surprised when in May this year I was introduced to someone working with Imagine Telecom who were planning to launch a Wimax service in Ireland. Basically he wanted to discuss WiMax with me and more specifically how to market the service. We had a few chats and I suggested they’d consider some of the points made above. Shortly afterwards they sent out a press release announcing a partnership with Intel whereby Intel was investing 100mln (remember the figure I mentioned earlier?) in Imagine Telecom in order to fund a nationwide Wimax rollout. A detail to note here is that Imagine Telecom bought Irish Broadband from NTR in 2008 for +/-47mln. IBB was using Alvarion Breezemax technology which was a pre-wimax service. So they were building on this existing network and upgrading & expanding it. While I was in the planning stages for the US owned company we had also had very preliminary discussions with IBB at the end of 2007 exploring the option of purchasing the company, so it all spins back into itself somehow. We didn’t go ahead because we didn’t agree with the valuation put on it by NTR and in the end it turned out we were right.

After Imagine’s press release nothing much seemed to happen until early October when they had a big product launch. There was a big dog & pony show in Dublin followed by a big media campaign. What? Yes, a big m-e-d-i-a campaign. Big newspaper ads and huge billboards telling you to Google the term “wimax” to find out more. Which was pretty damn dumb as until only a few days ago Imagine didn’t even rank in the top 10 search results for “wimax”. During the launch all kinds of predictably hyped claims were made. Luckily we had someone tweeting these statements so they are recorded for future reference. You can check them here & here. The biggest lie was that they claimed to: “obtained enough spectrum to deliver future Wimax speeds of 40, 60, 100mbs“, that’s very significant as the IEEE’s 802.16 specification indicates a maximum speed of 70Mbs. So, if you were impressed by the big launch could you sign up for the service? No you couldn’t as no price & package information was available until this weekend more than 3 weeks after the big launch. This delay which I assume was intentional lead to a lot of speculation and more importantly negative comments on Twitter, Boards.ie and other online networks. Didn’t anyone in Imagine or their PR company realise that if you create a big expectation followed by a silence that people will start to talk & speculate?! When you create customer expectation it is essential that you can live up to that expectation, right there and then.

Now don’t get me wrong; I think that the arrival of a Wimax operator in Ireland is a significant step forward towards quality & affordable broadband. The packages that Imagine are offering on their website look very good and extremely well priced. Coverage seems to be mostly limited to the larger urban centres which is to be expected and you can see the existing IBB infrastructure as these are all the green markers on the map. I for one would certainly sign up if I lived or worked in their coverage area. Another great plus is that for an extra 5 euro p/m you get a Wimax dongle for broadband access on the go. I see that eating into the current 3G market share. I do wonder though if they use 802.16d or 802.16e for their mobile access as this will make a huge difference in being able to use it “on the move” i.e. in a moving vehicle and crossing over between base-stations.

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Comments
  1. Thanks for this post, Evert. It answers a lot of questions I had.

    There’s a big green marker on your side of Lough Derg – does that cover you. Would it service Ogonnelloe?

    Gerry

    • evertb says:

      Gerry, that green marker is the big mast north of Ballina. There’s an “old” IBB base station on there. I am sure that it covers Ogonnelloe.

  2. Kevin says:

    Great post. Very informative.

    Since being a wee nipper I’ve been around mobile tech as my father has worked in it his whole life (currently working in a huge organisation who say they’re the biggest in Ireland, or Europe… their logo is red and they like McLaren F1 *cough*). I’m incredibly excited and really want WiMax to come out. It solves all the limitations of 3G for users like me with smartphones who only ever make data calls… but it seems companies don’t want to roll on it yet because consumer activity apparently says it’s not worth it. They sank loads into 3G networks that ultimately proved unweildy and weren’t properly used – plus the public were madly confused by the difference between a “network” and a “3G network”.

    As for the “Google it” ads. I was very tempted to use one of my dormant domains I own to just load it up with WiMax and related keywords and SEO my way to the top of googles listing – just to piss off Imagine. :P

  3. Thanks for your detailed post about WiMax. I’m of the same mind as you. This *could* be very cool technology… not the hype with all the high speeds and long distances… but that’s what marketing folks do when they don’t understand the tech.

    Impressed that you were so close in the valuation and almost part of the process.

    Keep us informed as this moves further along.

    I’m still waiting to see an actual profitable WiMax install that people can use.

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