White Paper

Intel Information Technology

The Business Case for WiMAX
Computer Manufacturing
WiMAX
in the Enterprise
To offer high-speed network access at home for employees in countries where wired
broadband services are not widely available, Intel IT worked with commercial providers to run
trials of fixed-point Worldwide Interoperability for Microwave Access (WiMAX) services. We
found that migrating the heaviest users of dial-up services at three sites in Costa Rica, Ireland,
and the Philippines could save USD 388,000 per year in remote access costs. We estimated the
value of productivity improvements due to time savings for the 130 trial participants at USD
122,000 to USD 535,000 per year, or a potential USD 8.1 million to USD 35.3 million per year
if the service were deployed to all Intel laptop users currently using dial-up.

Ian Soanes, Michael Young, Dvir Ben-Ari, and Jaye Matthews, Intel Corporation

February 2007

IT@Intel
White Paper The Business Case for WiMAX in the Enterprise

Executive Summary
Intel employees worldwide increasingly need high-speed network access at home to
facilitate working in global markets and in geographically dispersed teams, as well as
to help balance the demands of work and home. In markets where wired broadband
services are widely available, we have migrated many users from dial-up networking
to wired broadband for network access from home.
Migrating to WiMAX
generated productivity However, wired broadband services have not been widely deployed in emerging
improvements markets and less-populated areas, so many employees still rely on dial-up or, in
some cases, have no network access from home at all.
among the 130
trial participants We identified fixed-point Worldwide Interoperability for Microwave Access (WiMAX)
conservatively as a potential solution and worked with service providers to run trials of commercial
estimated at USD services in 2005 and 2006 for approximately 130 employees around Intel sites in
122,000 to USD Costa Rica, Ireland, and the Philippines.
535,000 per year.
We analyzed the potential cost savings and productivity benefits of migrating users
to WiMAX. Key findings included:
• Potential direct cost savings of USD 388,000 per year by migrating the heaviest
users of dial-up services at the three sites
• Productivity improvements for the 130 trial participants conservatively estimated
at USD 122,000 to USD 535,000 per year
• Potential productivity benefits of USD 8.1 million to USD 35.3 million per year by
migrating all Intel employees currently using dial-up

Trial participants saved about seven hours per week on average and worked an
additional eight hours per week from home. They continue using WiMAX and other
employees have since subscribed to the services. In the future, we expect to further
evaluate the potential of emerging mobile WiMAX services.


 The Business Case for WiMAX in the Enterprise White Paper

Contents
Executive Summary ................................................................................................................................................ 2

Business Challenge................................................................................................................................................... 4

Solution............................................................................................................................................................................ 5
WiMAX Commercial Service Trial..................................................................................................................... 5
Site Selection.. ........................................................................................................................................................... 6
Service Provider Offerings.. ............................................................................................................................... 6
The Study.................................................................................................................................................................... 7
Results: ROI Analysis............................................................................................................................................. 7
Productivity Benefit Analysis........................................................................................................................... 8
Considerations.. ...................................................................................................................................................... 10

Conclusion.................................................................................................................................................................... 11

Authors.......................................................................................................................................................................... 11

Acronyms.. .................................................................................................................................................................... 11


White Paper The Business Case for WiMAX in the Enterprise
Business Challenge
Workers increasingly need high-speed network access at home to enable a flexible
approach to working in global markets, to facilitate working in teams that are
geographically dispersed in multiple time zones, and to help balance the demands
of work and home.
In mature markets, service providers have moved
quickly to meet this demand by deploying fixed-
line broadband services. Typically, employees
in these mature markets were previously using
dial-up for network access at home and we have
been able to improve productivity by migrating
many of them to wired broadband services.
However, service providers have been slower to
deploy wired broadband to more remote parts
of emerging markets, despite demand from
multinational corporations and other businesses.
This is partly because it is difficult to justify the
cost of providing infrastructure in difficult terrain
and less densely populated areas. As a result,
many Intel employees in these emerging markets
have lacked access to wired broadband services.
This presents a challenge to Intel: How do we
promote work-life balance in a global corporation
when employees don’t have sufficient network
bandwidth at home?
This is an even more pressing issue when
employees don’t have land-based phone lines
at home. This is increasing in some regions of
Asia due to the lack of wired infrastructure and

an emerging “on-the-move” lifestyle. In these
regions, employees typically use cell phones to
call into meetings remotely but lack the ability to
access the network from home.
Intel employees’ use of the corporate dial-up
networking service in different countries reflects
the availability of broadband services and the
work-from-home trend. In some countries,
including the United States, the total number of
dial-up network minutes has declined as workers
switch to broadband connections. However, dial-
up use remains much higher in countries where
broadband is not as widely available, as shown in
Table 1. In Costa Rica, for instance, about a third
of employees use dial-up networking and those
employees each use more than 450 minutes per
month on average.
WiMAX high-speed wireless services present one
possible solution to the problem. The availability
of fixed-point WiMAX equipment and early
deployment of services in several countries
provided Intel IT with an opportunity to see
whether these services could improve employee
productivity and cut communication costs.
 The Business Case for WiMAX in the Enterprise White Paper

Table 1. Use of Dial-up Networking at Intel Sites

Employees Using Percent Using Minutes Used
Location of Site Total Employees Dial-up Service Dial-up Service per Month

United States 39,021 3,020 8% 1,289,620

Costa Rica 2,444 836 34% 392,131

Philippines 5,700 773 14% 374,859

Malaysia 6,747 1,218 18% 351,988

Ireland 4,117 789 19% 302,409

Solution
WiMAX Commercial However, the situation was more promising in

Service Trial other countries with high dial-up use. In Costa

Rica, Ireland, and the Philippines, service providers
We began by identifying countries in which there
already owned licenses for spectrum in the 3.4
was high potential demand for WiMAX, together
GHz to 3.6 GHz range. In Ireland, a service provider
with service providers capable of delivering
was already commercially deploying pre-WiMAX
commercial services relatively quickly.
equipment to residential and business users. Our
One criterion was availability of pre-WiMAX aggregate dial-up usage data indicated extensive
(untested) or WiMAX (compliant with IEEE 802.16 use of dial-up networking in all three countries,
2004) equipment designed to operate within the suggesting high potential demand for WiMAX.
spectrum that governments had licensed for that
To validate our selection, we compared our
purpose. When we began our evaluation in 2005,
aggregate dial-up usage data with surveys that
the equipment available used the 3.3 GHz to 3.6
analyzed the type of connectivity employees
GHz band. This meant that countries such as the
used when working at home. Intel employees
United States, Malaysia, and India, where this part
in Costa Rica and Ireland, where broadband
of the spectrum was not available for WiMAX,
availability is comparatively low, reported greater
could not participate in our early trials.


White Paper The Business Case for WiMAX in the Enterprise
reliance on dial-up services than employees in
most other countries, as shown in Figure 1.
Site Selection
We selected three sites in Costa Rica, Ireland,
and the Philippines for our trials. These sites
shared key attributes: Employees used dial-up
networking extensively and there was a low
population density in the areas surrounding the
sites with a corresponding low availability of
wired broadband. Each site employed several
thousand people, as shown in Table 1. Many
employees at the Philippines site used cell
phones for communication from home due to a
lack of landlines in the area. Up to 60 percent of
employees, depending on the site, had laptops
that they could use to connect from home.
Service Provider Offerings
We analyzed service provider offerings in each
of our selected countries. Providers typically
delivered synchronous or asynchronous services
100%
80
60
40
20
0
China India Malaysia Israel Ireland Europe,
Middle East,
Africa
Figure 1. How Intel employees access the corporate network from home.

with download speeds starting at about 300
kilobits per second (kbps) with a 50:1 contention
ratio for between USD 20 to USD 35 per month,
as shown in Table 2. Initial cost of installation at a
customer’s residence was USD 500 to USD 800,
including external customer premises equipment
(CPE) and setup. We determined that service
providers in each country were in a good position
to provide a production WiMAX service with an
operating license for the required frequencies, a
solid business plan with management support,
funding, and long-term vision.
Intel worked with each provider to help ensure
delivery of service with WiMAX-compliant
equipment to our employees. In each country,
we selected a WiMAX service that offered
adequate performance for our needs at the best
price. Because provider offerings varied among
the different countries, these services ranged
from 384 kbps to 2 megabits per second (Mbps)
at various contention ratios.
Dial-up through
a phone line
Cable modem
Don’t use a
computer at home
DSL
Can’t connect to
Intel network
from home
Other
United States Costa Rica Corporate
Average
 The Business Case for WiMAX in the Enterprise White Paper

The Study Cost Savings Analysis

We solicited participants for the trial by
broadcasting e-mail messages to employees,
by inviting specific dial-up users, and by word
of mouth as people discussed the trial.
Participants began using WiMAX between
late 2005 and early 2006.
Dial-up access is charged by the minute, while
WiMAX service has a fixed monthly cost. To ensure
that we reduce communication costs by switching
people from dial-up to broadband, we need to
make sure that we migrate the right people—those
who are heavy users of dial-up networking.

We analyzed data for approximately 130
participants, more than half of whom were in
the Philippines. In Ireland, the number of
participants was somewhat restricted by line-
of-sight limitations of the wireless technology
that result in reduced performance when there
is not a direct, unobstructed path between
transmitter and receiver. This meant that only
about 70 percent of potential participants were
able to receive service. In Costa Rica, participation
was initially inhibited to some extent by the high
CPE cost. The number of WiMAX users in Ireland
and Costa Rica has continued to grow since this
analysis was completed.
Results: ROI Analysis
For each country, we calculated the breakeven
point for an individual user, defined as the
number of dial-up minutes that cost as much as
WiMAX service, as shown in Table 2.
Then, for each site, we considered two migration
scenarios based on these costs.
• Scenario A. Migrate only employees who use
dial-up heavily, defined as those who currently
use more than the breakeven number of dial-
up minutes. This scenario provides a direct cost
savings for each user we migrate.
• Scenario B. Migrate as many users as possible
without increasing monthly communications
costs. In this scenario, we migrate the heaviest
users and some who use fewer than the

We analyzed two aspects of ROI for the trials.
• Potential cost savings due to replacing dial-up
access with WiMAX
• Improved employee productivity due to
working with a WiMAX broadband connection
breakeven number of minutes. Though this
scenario may not result in a direct savings in
communications costs, it maximizes the potential
productivity benefits of the migration because
we are providing broadband to more users.

Table 2. Cost Analysis Comparing Dial-up with WiMAX1

Cost Element Philippines Costa Rica Ireland

WiMAX customer premises equipment (CPE) installation USD 500 USD 500 No charge

WiMAX monthly service cost USD 20 USD 34.95 USD 43

Total WiMAX monthly cost¥ USD 31 USD 46 USD 43

Dial-up cost per minute USD 0.05 USD 0.05 USD 0.13

Breakeven point for switching a user from dial-up to

617 917 331
WiMAX, in dial-up minutes per month
1
Based on Q1 2006 data and exchange rates.
¥
Based on five-year net present cost calculation, including monthly service and installation cost.


White Paper The Business Case for WiMAX in the Enterprise

Costa Rica
$250,000
Dial-up Users
In Scenario A, we migrate 126 users to WiMAX, saving USD 58,000
$235,279 $203,136 WiMAX Users
200,000 per year, as shown in Figure 2. In Scenario B, we migrate 368 users,
the top 44 percent, without increasing total cost.
$69,325
150,000
U.S. Dollars

Philippines
100,000 $107,884 In Scenario A, we migrate 168 users to WiMAX, saving USD 91,000
per year, as shown in Figure 3. In Scenario B, we migrate 606 users,
50,000
the top 87 percent, without increasing total cost.
$32,176
0
Ireland
Current Top 126 Top 368
In Scenario A, we migrate 275 users to WiMAX, saving USD
Figure 2. Cost analysis: Migrating employees at the 239,000 per year, as shown in Figure 4. In Scenario B, we migrate
Costa Rica site from dial-up to WiMAX. all 789 dial-up users and still save USD 65,000.

Productivity Benefit Analysis

$250,000
Dial-up Users We estimated the productivity benefits of switching to broadband
WiMAX Users
$224,915 $224,196 by interviewing 22 users in the Philippines and Ireland, representing
200,000
about 17 percent of those participating in the trial at that time.

150,000
The employees included managers and engineers from business
U.S. Dollars

$62,153
groups including IT, manufacturing, human resources, and sales
100,000 and marketing. When interviewed, all had been using WiMAX for
at least two months. Before having WiMAX installed, 13 of the 14
50,000 $72,063 Philippines employees said they had no Internet connectivity, while
$705 one previously used a DSL connection. All the participants in Ireland
0
previously used dial-up connections.
Current Top 168 Top 606

We asked participants a standard set of questions, including:

Figure 3. Cost analysis: Migrating employees at the
Philippines site from dial-up to WiMAX. • How many hours they worked at home before and after WiMAX
installation

• Whether they performed different activities and used different

$500,000
Dial-up Users
applications online with a high-speed connection
$471,758 WiMAX Users
• How much time they saved due to the broadband connection
400,000
$407,124

Summary Interview Results

300,000
U.S. Dollars

Participants attributed time savings averaging seven hours a week

200,000 $141,900 to WiMAX, with a substantial increase in the number of activities
performed online and a corresponding increase in working from home.
100,000
$90,443 Previously, those who had lacked home Internet access were only
0 able to perform very limited functions such as using their laptops
Current Top 275 All Users (789)

Figure 4. Cost analysis: Migrating employees at the

Ireland site from dial-up to WiMAX.



offline, checking voice mail, and dialing into to
conference calls. Some participants with dial-up
access said they could check e-mail and perform
some other online functions, but were unable
to use many applications and were also limited
because they could not use the phone and work
online at the same time.
With WiMAX, in contrast, participants said they
used a wide range of online applications and
services including e-mail and calendar; access to
the Web and to internal Intel sites and servers;
online conferencing; and other data-sharing
software, databases, development tools, and
enterprise business applications. They also
downloaded and uploaded a wide variety of data.
Besides saving an estimated seven hours per
week, participants said that being able to work
effectively online resulted in major changes in
their weekly schedules. Before getting WiMAX
service, participants worked from home an
average of four hours per week; with WiMAX,
that number tripled to 12 hours per week. Users’
comments supported the estimated productivity
benefits, indicating that participants felt they
were able to perform their jobs better by working
from home outside regular office hours as well as
during the day.
Estimating Business Value
Accurately predicting productivity improvements
is difficult. Often, we can only gather data
indirectly, through surveys, rather than by directly
observing user behavior and its effect on output.
Therefore, we took a conservative approach
when calculating estimated productivity benefits:
• We calculated a low-end estimate based partly
on previous analysis at Intel as well as a high-
end estimate based on time savings reported
in our WiMAX user survey.
The Business Case for WiMAX in the Enterprise White Paper
• For the high-end estimate, we calculated
savings based on half the hours the WiMAX
trial participants actually said they saved.
• We calculated the business value of hours
saved at 50 percent of the fully burdened
employee per-hour rate.
Low-end Estimate
We used the following assumptions:
• Our key variable was hours saved. We used
a figure of 10 percent of hours worked from
home. This was based on a previous analysis
at Intel that indicated a time savings of 10
percent of the hours worked remotely due
to switching from dial-up to fixed broadband
connections.
• A fully burdened cost of USD 50 per employee
per hour. We then reduced this figure by
50 percent to USD 25 when calculating
productivity value.
• Each user works at home eight hours per
week once broadband is available. This figure
is conservative, because survey participants
reported an average of 12 hours.
• Sixty percent of the employees who lack
a broadband connection today could be
connected using WiMAX. We assumed that
not all employees will have the option of
WiMAX, because service is not uniform and
is negatively affected by obstructions such
as hills and forests.
Our low-end estimate yielded an estimated
business value, based on productivity
improvements, of USD 122,000 for the 130-
employee trial, or USD 8.1 million for all Intel
laptop users currently using dial-up, as shown
in Table 3.

White Paper The Business Case for WiMAX in the Enterprise
Table 3. Productivity Analysis: Low-end Estimate
Factor
Hours worked from home per week
Hours saved per employee per week times 10%
Weeks worked per year
Total hours saved per employee per year
Number of employees in trial
Total hours saved in trial per year
Value of each hour saved (adjusted)
Total productivity benefit of WiMAX trials per year: USD 122,000
Total Intel laptop users
Percentage of laptop users using dial-up
Laptop users who could receive WiMAX service
Total value of WiMAX for all Intel users per year: USD 8.1 million
Table 4. Productivity Analysis: High-end Estimate
Factor
Hours worked from home per week
Hours saved per employee per week times 50%
Weeks worked per year
Total hours saved per employee per year
Number of employees in trial
Total hours saved in trial per year
Value of each hour saved (adjusted)
Total productivity benefit of WiMAX trials per year: USD 534,625
Total Intel laptop users
Percentage of laptop users using dial-up
Laptop users who could receive WiMAX service
Total value of WiMAX for all Intel users per year: USD 35.3 million
10
High-end Estimate
Value We used the following assumptions:
8
• Our key variable was hours saved. We used a figure of 50
0.8 percent of the average hours that trial participants said they
saved due to the WiMAX connection.
47
• As in our low-end estimate, we assumed a fully burdened cost
37.6 of USD 50 per employee per hour and reduced this figure by
50 percent to USD 25 when calculating productivity value.
130
• As in our low-end estimate, we assumed that 60 percent of
4,888 the employees who lack a broadband connection today could
be connected using WiMAX.
USD 25
Our high-end estimate yielded an estimated business value,
based on productivity improvements, of USD 458,000 for the
65,000 130-employee trial, or USD 35.3 million for all Intel laptop users
currently using dial-up, as shown in Table 4.
22%
8,580 Considerations
There are risks associated with pursuing the potential cost
reductions and productivity benefits identified in our study,
including:
• The final cost of WiMAX services is not yet clear. Currently,
Value
installation costs for fixed-point CPE are USD 500 to USD
12 800. This is expensive compared with current broadband
modems and routers, which typically cost less than USD 100.
3.5
However, volume sales of WiMAX equipment would likely lead
47 to lower costs.
164.5 • Benefits depend on migrating the right people—the heaviest
users of dial-up services—to broadband. If these “expensive”
130 dial-up users remain on dial-up while low usage users are
migrated, then productivity benefits and cost reductions may
21,385
not come to fruition.
USD 25
• We have assumed that governments will provide licenses that
allow service providers to provide coverage in most areas and
that the geography allows service to reach employees’ homes.
65,000 Our assumption of 60 percent availability makes allowances for
the likelihood that not all locations will get service.
22%
8,580
 The Business Case for WiMAX in the Enterprise White Paper

Conclusion
Our analysis shows a solid business benefit to deploying WiMAX to dial-up users
across the enterprise, especially in regions where wired broadband services are not
widely available.

Migrating the heaviest users of dial-up services
can deliver substantial hard cash savings.
However, our analysis shows that it may
be worth extending the service to a larger
proportion of the workforce, which can be
done without an overall increase in remote
communication costs. Migrating more users
offers added business value due to productivity
improvements and workday flexibility associated
with an always-on broadband service. We
estimate that these productivity benefits alone
could be worth USD 8.1 million to USD 35.3
million if WiMAX or other broadband services
were made available to all Intel laptop users.
Users appear happy with the service overall and
have continued to use it. In fact, more employees
have begun using WiMAX to provide everyday
connectivity since we performed our analysis.
The current high cost of CPE may present a
roadblock to early adoption. Another potential
obstacle is that due to line-of-sight geographic
limitations, it will not be possible to deploy
WiMAX to all potential users. However, volume
production of equipment and deployment
of WiMAX services is likely to lead to lower
costs, making the potential cost savings and
productivity benefits even more compelling.
Next, we expect to evaluate WiMAX in a mobile
usage model (IEEE 802.16e). Mobile broadband
equipment is starting to become available and
early evaluation will enable us to assess potential
benefits as we seek to keep our employees as
productive as possible in our fast-changing global
and mobile working environment.

Authors
Ian Soanes is a product manager with Intel Information Technology.
Jaye Matthews is a human factors engineer with Intel Information Technology.
Michael Young is an IT engineer with Intel Information Technology.
Dvir Ben-Ari is a finance analyst with Intel Corporation.

Acronyms
CPE customer premises equipment Mbps megabits per second
kbps kilobits per second WiMAX Wireless Interoperability for Microwave Access

11
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