Broadband wireless technologies including WiMax are set to go head-to-head with 3G networks, potentially undermining operators' multi-billion pound investments in the next-generation mobile technology.
According to a newly published report from Analysys Research, if WiMax wide area wireless networking can address "potential showstoppers" it will succeed in blurring the boundaries between existing mobile and fixed broadband wireless systems.
The study predicted a rapid growth in DSL and cable availability in developed markets. This is expected to force emerging wireless technologies to offer mobility to avoid being marginalised as niche fixed broadband wireless services.
"Offering fixed broadband internet access using wireless technologies is a tough business case, with wafer-thin margins," according to Dr Mark Heath, co-author of the Analysys report.
"The breakthrough opportunity will only come by learning from the success of cellular, extracting significant price premiums for mobility and offering a more profitable service mix."
The analyst firm noted that broadband wireless systems from Flarion, IPWireless and ArrayComm, which all support wide-area mobility, are already deployed in a variety of commercial and trial networks around the world.
Using an assortment of proprietary and standards-based technologies, such as OFDM and W-CDMA TDD, these systems claim advantages over 3G, including faster throughput, lower cost and lower latency.
They are to be joined by WiMax (IEEE 802.16e) and MobileFi (IEEE 802.20), both of which are aiming to combine the benefits of mobility, standardisation and multivendor support, albeit with commercial launches unlikely before 2007.
"The battle is now on between the vendors to secure the necessary global economies of scale to be a serious alternative to mainstream 3G technologies," said Heath.
"Success will demand extensive deployment by mobile operators, which are generally accepted to be the key customer targets.
"They have valuable assets such as base-station sites, large existing customer bases and strong marketing capabilities that will be crucial to achieving commercial success.
"They could decide to deploy alternative technologies alongside, or instead of, 3G as a means of offering differentiated services and driving new revenues."
Heath suggested that mobile operators represent a "tantalising opportunity" for vendors of these emerging technologies, but that there is still much to do to persuade mobile operators to invest in these rather than take up the options they have for 3G standard enhancements such as HSDPA.
The analyst argued that a number of critical points need to be addressed to tip the balance away from 3G, such as identification of a compelling mix of service propositions, provision of clear evidence of performance and cost gains, blueprints for integration with existing base stations, and confirmation of the availability of necessary spectrum.
These challenges are underlined by the results of initial service deployments. "Early trials generally show a poor return compared to mainstream mobile operator voice and messaging services," said report co-author Dr Alastair Brydon.
"Either services appear expensive to customers, which will mean adoption will remain low, or they are pitched in direct competition with fixed broadband services, when they deliver only around one per cent of the revenue per megabyte of traditional cellular services.
"Mobile operators demand rigorous evidence of system performance in a loaded network. They also need to understand the implications and costs of integration with their existing networks, particularly given that the new technologies are not currently supported by mainstream cellular vendors such as Nokia, Ericsson and Motorola."
The report ranks each broadband wireless technology against six key mobile operator requirements. While each is found to have its own specific strengths and weaknesses, no single technology currently comes close to meeting all needs, making HSDPA appear a safer deployment option, at least in the short-term.
Apart from mobile operators, the wildcards in the future of alternative broadband wireless technologies will be the various other types of player that are not currently active in the mobility market.
"Fixed operators, ISPs, wireless Lan hotspot providers and major consumer and business-to-business brands could deploy the technologies to offer a mix of voice and data services in direct competition with mobile operators," said Heath.
"But they are going to need a really strong business case, and wireless voice over IP will be critical to boosting revenues and profitability."
He warned, however, that in the absence of mass deployment by mobile operators, and the reductions in equipment prices resulting from economies of scale, some or all of these emerging BWA technologies may be relegated to become niche last-mile access solutions.
The Anlaysys study noted that time may not be on the side of proprietary technologies, potentially leaving forthcoming IEEE 802.16 and 802.20 standards to resolve the outstanding issues.
IEEE 802.16, in particular, benefits from strong backing from the WiMax Forum and Intel, although much about the standard, particularly its mobile variant IEEE 802.16e, is still undefined.
"The WiMax Forum needs to move from building awareness to clarifying the capability and role of the technology," concluded Brydon.
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