Wi-Fi, WiMAX, Why Care?

Sandy Teger and David J. Waks System Dynamics Inc.

sandy@system-dynamics.com

Wireless Technologies for Different Ranges

Wi-Fi
UWB/ZigBee /Bluetooth
PAN LAN

WiMAX

3G

MAN

WAN

Telephony: Shift from fixed to personal

The shift from fixed communications to personal communications expanded the communications market

Personal daily communications: 10 years ago

Home Commute Work (office) Work (Meeting room) Car Home

POTs

Pay phone

Centrex

Centrex

Cellular

POTs

8:00 AM

8:00 PM

Personal daily communications: now

Home Commute Work (office) Work (Meeting room) Car Home

Mobile phone (primary communications access)

Presented to the FCC on May 19, 2004 at the Broadband Wireless Conference

Source: Personal Broadband Industry Association

Telephony Spending Shift to Wireless

% Consumer Spending on Telecommunications
30% 25% 20% 15% 10% 5% 0%
Wireless Wired Video Internet

Balance of spending for telephony has now moved to wireless Wireless telephony is largest share of consumer wallet - and only one growing Is broadband next?

Source: TNS Telecoms, 2nd Qtr 2004

Personal Broadband Next

The shift from fixed connectivity to personal broadband connectivity will expand the digital media market

Internet access: Today

Home Commute Work (office) Work (Meeting room) Car Home

POTs, DSL, Cable

WiFi

T1/DS3

T1/DS3

GPRS

POTs, DSL, Cable

8:00 AM

8:00 PM

Internet access: Tomorrow

Home Commute Work (office) Work (Meeting room) Car Home

Personal Broadband (primary Internet access)

10

Presented to the FCC on May 19, 2004 at the Broadband Wireless Conference

Source: Personal Broadband Industry Association

Solutions For Personal Broadband Deploying Now

Wi-Fi Hotspot Bundles
SBC: DSL adder for $1.99 Dual Wi-Fi/cellular handsets from SBC/Cingular for hand-off to hotspots and roam to home

Pre-WiMAX Risk From 2.5 GHz band holders

Clearwire and Nextel already launched

3G: Verizon, Sprint Municipal wireless using Wi-Fi

Chaska, MN; Cerritos, CA; Philadelphia, PA;

WiMAX 802.16
Broadband Wireless Access Metropolitan Area Networks Fixed (and nomadic) access: 802.16-2004 (8/2004) Mobile access: 802.16e (expected 5/2005) Maximum cell size ~30 miles, 1.5 to 5 more typical Maximum speed 100 Mbps (64QAM/20 MHz)

WiMAX: Great Expectations

Addresses deficiencies of previous BBW
Interoperability Cost of base stations and CPE Shared bandwidth up to 100 Mbps Line of sight not required Coverage 3-5 miles, more like cellular Licensed and unlicensed spectrum

Many DOCSIS-like features including QoS Milestone to broadband everywhere

WiMAX Bandwagon Effect

WiMAX Forum: ~160 members and growing
Complete value chain Many chip companies, including Intel, Fujitsu Many major equipment companies, including Motorola, Alcatel, Siemens Many service providers, including BT, France Telecom and Qwest

Analogous to Wi-Fi Alliance for 802.11

Product certification through formal conformance and interoperability testing against profiles Promotion, promotion, promotion

WiMAX Status
Pre-certification products shipping now
Based on earlier 802.16a standard Expensive base stations and CPE enterprise focus

Certified products in 2005

Based on 802.16-2004 Licensed 2.5 GHz (U.S.) and 3.5 GHz (ROW) License-free 5.8 GHz Plugfest interoperability testing started 2004 Formal certification testing ~1H05

Mobile WiMAX expected late 2006

CPE bundled in laptops by 2007

Other Mobile Broadband Wireless Technologies Deploying Now

FCC just restructured 2.5 GHz band from video to broadband service Band holders not waiting for WiMAX
Nextel running large-scale market trial in Raleigh-Durham Clearwire launched in Jacksonville, FL and St. Cloud, MN Sprint also owns spectrum, deferring decision

Nextel in Raleigh-Durham
Flarion Flash-OFDM technology Mobile within RDU area Downlink 1.5 Mbps (burst to 3Mbps) Service starts at $34.99 (750/200) Combo Wi-Fi/Flarion device: Netgear & D-Link Developing technical & market knowledge

Clearwire in Jacksonville, FL
NextNet preWiMAX technology Up to 1.5 Mbps Starts at $24.99 (512/128) Easy self-install Licenses in >80 markets

Metro Wi-Fi
High-volume, low cost, low margin Based on off-the-shelf consumer Wi-Fi adapters Not carrier class service Disruptive to MSOs?

Wi-Fi Gaps Being Filled

Issue
Spectrum usage Security QoS Interference Roaming performance Throughput Mesh techniques Range Connection persistence

Specifics

Progress
802.11a 802.11i/WPA, WPA2 802.11e/WMM 802.11h, 802.11k 802.11r 802.11n 802.11s

City-wide Hot Zones

Already deployed in some smaller cities Big cities preparing to deploy soon Public safety a major driver, digital divide another Near-term threat and opportunity for MSOs

Rapid Pace of Innovation and Market Entry

Mesh Networking
Tropos Networks MeshNetworks PacketHop Nortel Motorola

Smart Antennas
Vivato 5G Wireless

City-Wide Wi-Fi in Chaska, MN

City operated, 16 square mile coverage area Public safety, low-cost residential broadband service 7500 homes passed, 1100 pre-registered 200 cells, <$500,000 CapEx

Is Metro Wi-Fi Disruptive?

Disruptive Technologies*
Simple, cheap Target lower performance markets Commercialized in emerging market Fast technological progress

Subsequently become performance competitive against established products

* The Innovators Dilemma, Clayton M. Christensen

Is Your City Next?

Philadelphia Grand Haven

Spokane

Jacksonville