WiMAX Around the Globe: APAC
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The Asia-Pacific region (APAC) may be the laboratory and proving ground for WiMAX, but so far the results are a tad disappointing.
Despite strong government mandates in markets, such as India and Taiwan, aggressive build-outs in Korea and Japan, and a relatively large number of commercial operators, WiMAX has still not had the kind of impact players in the region had hoped.
APAC is a microcosm in the sense that it includes both very mature markets (especially from the point of view of connectivity), such as Japan, Korea, Taiwan, and Australia, as well as important emerging markets, including India and China.
WiMAX faces problems in both worlds, for somewhat different reasons, says Bettina Tratz-Ryan, research VP responsible for carrier network infrastructure, in Gartner Inc.s Technology and Service Provider Research group.
That has caused delays in roll-outs in some markets and disappointing results where WiMAX has been rolled out.
Tune in Tokyo
According to WiMAX Forum, over 70 WiMAX networks had been deployed across the region by April of this year. 4G Counts, a service of BWA Research UK and Maravedis Inc., says there were 58 operators as of Q4 2008.
Gartner, which does not count the number of operators, but which does track WiMAX equipment revenue by region, shows Asia/Pacific ahead of North America, the next most active region. It forecasts revenues of $432 million in 2009, compared to $375 million for North America.
But Gartner does not include Japan in Asia/Pacific and it forecasts that Japanese operators will spend $228 million this year.
According to 4G Counts, more than 50% of operators are deploying in the 3.3 to 3.8 GHz range of spectrumsmost, with a couple of notable exceptions, in the standard 3.5 GHz band. Almost 30%, though, have access to and are deploying in the 2.3 to 2.7 GHz range.
WiMAX Forum, interestingly, claims that 2.5 GHz is the most common band for WiMAX operators. It also says that over 30 of the 70 operators it counts are using 802.16e, the rest 16d, with the balance steadily shifting to 16e.
APAC is also well ahead in terms of subscribers. According to BWA, it accounts for 853,012 of 3.16 million broadband wireless and WiMAX subscribers worldwide as of Q4 2008, almost half of them added since January 2008. Average quarter-over-quarter growth since Q4 2007: 24%.
Gartner, which counts WiMAX connections rather than individual subscribersone subscriber could have multiple connectionsshows Asia/Pacific plus Japan with over 1.5 million connections in 2008 (compared to 870,000 in North America) and over 3.5 million by the end of 2009.
All of which sounds promising. And Tratz-Ryan concedes that the adoption rate in Asia has been quite strong, especially in Southeast Asian countries, such as the Philippines, Viet Nam, and Indonesia, where WiMAX is mainly used for DSL fill-infixed wireless broadband accessto bridge the digital divide.
But in some of the most important marketsTaiwan, Korea, IndiaWiMAX has hit roadblocks.
In Korea, two providers, KT Corp. (Korea Telecom, the incumbent) and SK Telecom have launched aggressive build-outs using WiBro, a national variant of WiMAX. They offer very high-speed connectivity (to 40 Mbps), mobile connectivity at up to 75 mph, voice, gaming, multimedia applications the whole nine yards, as Tratz-Ryan says.
But the Korean roll-outs have been very disappointing, she reports. The government expected to have millions of subscribers by now. The reality is its still well under a million. In fact, Korea Telecom, which BWA says has the largest subscriber base in the region, had only 160,422 customers signed up as of Q4 2008.
What went wrong? A few things.
First of all, a large percentage of the population in Korea already has very high-speed wireline Internet connectivity and 3G mobile. Higher-speed mobile connectivity might be attractive. But consumers are not willing to pay the rates for [WiMAX service] that are justified by the cost of the build-outs, Tratz-Ryan says.
What is lacking, she says, is a killer app, a compelling application that only WiMAX enables or that WiMAX enables better than other technologies.
Its clearly not voiceor not so far. In fact, another of the problems in Korea is that there arent enough (or good enough) WiBro-capable mobile phones and the voice experience, in general, is not up to consumers expectations.
KT is responding by rebranding its offering as a mainly data service for business users, adding security features and marketing elegant USB dongles for use with laptops and netbooks.
There is no indication yet whether this strategy will work, Tratz-Ryan says. But even if it does, it will be a niche marketa far cry from the WiMAX-as-mass-consumer-phenomenon originally foreseen in Korea.
Taiwan, where the government has subsidized and mandated WiMAX deployments, turning the country into a key supplier of equipment, especially terminals, consumer uptake has been similarly disappointing. In response, the government, in partnership with WiMAX Forum, has established an R&D center to develop applications.
The focus appears not to be on killer apps, however. The Taiwanese instead are developing niche and vertical applications.
Examples? An application that hotels and resorts could implement to allow guests to quickly and easily upload images and videos to social networking sites. Or using WiMAX to enable video surveillance and iris-scanning entry control systems, or to enable traffic and parking control in high-density urban settingsimaging vehicle license plates to police permits for inner-city access, for example.
Could an aggregation of such applications with compelling business cases for targeted business and government organizations be enough to drive WiMAX forward? It remains to be seen.
In the meantime, Tratz-Ryan says, the problems faced in Korea and Taiwan have obvious implications for Clearwire/Sprint which began later, but is now on a similar path, using WiMAX for mobile broadband access.
Also for Unwired Australia which has launched mobile service in Sydney and Melbourne. (Unwired, however, has fared relatively well. BWA cites it as having the second biggest subscriber base in the region as of Q4 2008.)
In India, the government mandated the use of WiMAX as a way to bridge the digital divide in suburban and rural areas. It issued seven licenses to ISPsbut in the non-standard 3.3 to 3.4 GHz range. This created problems right away because WiMAX Forum does not certify equipment in this range.
All the operators have trialed 802.16d technology, but not all have deployed networks and none with significant build-outs in originally targeted rural areas. One is using WiMAX mainly for backhaul of Wi-Fi hotspot traffic.
The Indian government will also allocate some 2.5 GHz spectrum, which would make it easier for operators to deploy fully mobile 802.16e networksbut it hasnt done so yet.
"It's the economy, stupid"
Delays in executing the original plan for WiMAX in India are hardly surprising, Tratz-Ryan says. The business case for operators simply wasnt there.
Well over 90% of households have incomes below $10,000 and few have PCs. You cant expect to be able to sell modems for $50, for example, when that represents more than a months income to many.
The technology has to be really, really cheap, Tratz-Ryan says. And to be able to do that requires a lot of scale.
Gartner believes a better first strategy for the government would be to encourage establishment of more community hotspots and Internet cafes powered by Wi-Fi for the last mile and plan to use WiMAX to backhaul the resulting traffic.
Across the region, most observers cite availability of appropriate spectrum and lack of choice in customer premises equipment as barriersas in other regions.
The global recession has also had an impact, though surprisingly small and localized. In fact, while Gartner has noticed some hesitation in WiMAX roll-outs in mature markets as a result of scarce credit, there has actually been an uptick in activity in some emerging markets, including China.
The Chinese government, as one of its recession-beating initiatives offered funding and inducements to banks to underwrite WiMAX roll-outs in underserved and unserved areas. The new policy has been in place for about six months and its beginning to bear fruit, Tratz-Ryan says.
If APAC is indeed a laboratory and testing ground for WiMAX, the early evidence appears to confirm what we have seen in other parts of the world. The business case for WiMAX is better in emerging markets where its being used as DSL fill-in, and for the same reasons.
But in markets, such as Korea and Taiwan, there is considerable sunk investment in WiMAX and a public stake in its use as well. It seems unlikely it would be allowed to whither on the vine.
Is it possible that initiatives thereespecially the WiMAX Forum-backed application development centermay yet help to forge a viable place for WiMAX in the developed world? Stay tuned.
Gerry Blackwell is a veteran technology journalist and frequent contributor to Wi-Fi Planet. For more on WiMAX in Europe, read "WiMAX Faces Tough Competition from 3G in UK."