Jennigay Coetzer – Business Day 2009

An increasing number of operators worldwide are implementing WiMAX capabilities on their networks. Once WiMAX coverage is broad enough it will provide a viable alternative to 3G and the next generation 4G Long Term Evolution (LTE) for mobile connectivity.

To date there are 237 leading WiMAX operators worldwide and it was announced at the recent WiMAX Forum global congress that 14 forum participants are working together on WiMAX roaming trials. The first Intel-based laptops with built-in WiMAX capabilities are becoming available in markets like the US, Europe, Russia and parts of Asia where there is broad coverage of network services based on this technology.

Intel made the decision back in the early 2000s to develop laptop technology around WiMAX instead of 3G, because it added the least amount to the overall cost of the device. With 3G, intellectual property royalties have to be paid to the originators of GSM technologies, which include Edge, 3G and the next generation Long Term Evolution (LTE).

The three major GSM originators are Qualcom, Ericsson and Nokia, says Danie Steyn, Sub-Saharan regional business manager at Intel. He says the GSM royalties are based on a percentage of the overall cost of the user device and this has to be factored into the selling price.

“This is a challenge when the aim is to produce laptops and netbooks that sell for under $200 so they are affordable to more people.” Over the past few years the cost of adding a built-in 3G modem has dropped from $150 to $80, but this still pushes up the price of the laptop quite significantly.

In comparison, a built-in WiMAX modem adds about $40 to the cost of the device, even with low quantities, because the technology is subject to comparatively minimal royalties. The cost will come down even further once volume sales of WiMAX capable user devices reach critical mass, says Steyn.

For similar reasons it was viable for Intel to embed WiFi into its laptop technology platform and 90% of laptops now include this capability. “We want to achieve the same with WiMAX, the goal being to get to the same modem cost of about $10 per laptop,” says Steyn.

He says WiMAX capable laptops and netbooks will only be available in South Africa when there is sufficient network coverage supporting the technology. As it stands, iBurst is the only local company that has been issued with a 2.5 Gigahertz (Ghz) spectrum licence, which is required to support mobile WiMAX services.

“We are frustrated with the lack of progress with the allocation of the 2.5 Ghz spectrum,” says Steyn. As a champion of WiMAX technology Intel has launched campaigns across the globe to promote its benefits. “The more affordable connectivity users have the more PCs and laptops will be sold and the more PCs that are sold the more people will be able to connect to the internet,” says Steyn.

He says in the early 2000s Mexican operator Telmax found the market for new subscribers had dried up and its research showed that not many more people in the area had PCs or laptops. So the company started bundling PCs and laptops with its services, and this led to a significant increase in subscribers.

Today, many operators worldwide are offering similar bundles in an effort to stimulate demand for mobile data services.

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