Unwired sings the lonely WiMAX blues

commentary You can't blame wireless carrier Unwired for feeling a little left out in the last few weeks.

Renai LeMay, ZDNet AustraliaSeveral of the broadband seller's giant competitors have spent that time detailing their plans to provide mobile broadband over networks based on the 3G GSM standard, with some investigating next-generation HSDPA services on the back of the GSM networks.

In contrast, Unwired is the principal local champion of the WiMAX standard, the mobile version of which is expected to be ratified later this year.

However in the light of the billions of dollars Optus, Vodafone, Hutchison and especially Telstra have been and will be putting into 3G infrastructure, WiMAX's position in Australia is looking a little unsteady.

In particular, Telstra's media blitz this week, which highlighted the fact the telco will consolidate its three mobile networks to a single national 3G GSM network -- appeared to have Unwired rattled.

Telstra claimed the network could eventually deliver up to 14Mbps wireless broadband speeds to customers, using the HSDPA standard which Vodafone is already basing some international services on.

But shortly after Telstra's news hit the street, Unwired fired off a statement attacking Telstra's technology base.

"HSDPA/3G is an underpowered technology which will not meet the needs of people looking for a broadband equivalent wireless service," said the statement in the name of chief technical officer Eric Hamilton.

"While in theory a [3G connection] can support 14.4Mbps of traffic, tests have shown that the real throughput is little better than 3Mbps," he added.

This, Hamilton alleged, was well under the speeds offered by WiMAX as well as Unwired's current proprietary solution from vendor Navini.

There is some truth to Hamilton's statements -- WiMAX does indeed have the potential to offer both higher speeds and more reliable connections than services based on 3G GSM/HSDPA.

However you can't ignore the sheer billions of dollars of investment that the major carriers are putting into alternatives to WiMAX. In that context, Intel's recent AUD$37 million investment in Unwired seems kind of underwhelming.

And although neither Telstra nor Vodafone, which is trialling HSDPA, are actually selling HSDPA-based services yet, neither is Unwired yet selling speeds higher than 1.5Mbps itself -- and it's not selling anything at all outside Sydney.

When the larger telcos do launch HSDPA services, they'll be launching on the back of their rapidly expanding 3G networks -- which in Telstra's and its partner Hutchison's case already reach to all the major capital cities.

But Unwired's problems don't stop there -- its survival as a profitable business is still far from assured.

The company has so far signed up only half of the customers it needs to break even on its Sydney business, let alone elsewhere. Around 30,000 Sydney customers are still needed.

Sadly, it's a well-known fact that the better technology doesn't always win. And in this case the opportunity for the larger carriers to combine their mobile phone and wireless broadband services into one network is extremely attractive.

What do you think? Will wireless broadband based on 3G/HSDPA become a significant force in Australia? Or will WiMAX win the day? Send your thoughts to renai.lemay@zdnet.com.au.

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Talkback 4 comments

    The WiMAX Steamroller, I can SEE it! Roger Ramjet -- 18/11/05 (in reply to #120123445)

    I'm sure that you Aussies haven't been reading my posts on The WiMAX Steamroller. The speed and range of WiMAX will be the selling points, but the meshing process is the most interesting piece of the puzzle. After people have subscribed to WiMAX for awhile, and WiMAX becomes ubiquitous - there will become a point in time where someone will develop an open meshing software. People will then jump on the free MESH in droves - killing off commercial WiMAX and making the WiMAX MESH into the defacto internet. When this happens, "control" is no longer in the picture - as everyone is free to join in the MESH or drop out at any time. This makes "tracing" very difficult (read impossible). Add encryption, and there is no way anyone could reliably intercept data. Too bad for InterPol and the FBI - good news for freedom lovers.

    The WiMAX steamroller Renai LeMay -- 18/11/05 (in reply to #120123446)

    hi Roger,

    I am aware that you are a regular poster on WiMAX issues! I keep in touch with what's happening over on our sister site ZDNet.com in the US.

    I think you have some valid points, but at least in terms of Australia, I can't see commercial WiMAX dying and being replaced by a free mesh network. The cost of rolling out infrastructure in this nation continue to be prohibitive, and someone needs to maintain the stuff.

    I have seen a few examples of mesh networks (there was one in France announced a while ago), but they haven't delivered on high-speed promises yet, and haven't even delivered better speeds than 10Mbps ethernet as far as I have heard.

    But thanks for your comments!

    Cheers,

    Renai LeMay
    News Journalist
    ZDNet Australia

    3G GSM/HSDPA vs WiMAX Mitchell Crago -- 18/11/05

    Its hardly a suprise that the encumbent mobile carriers have spent huge amounts to leverage their extensive investment in mobile telephony for data services.

    Its a stretch to take this investment as an indication of the future of WiMAX based technology in Australia. Indeed, it would be illogical for them to not evolve their GSM networks to the data centric 3G paradigm.

    The Unwired network makes strong use of the spectrum they have secured directly, and with the recent Austar agreement. In fact, if they drive their customer base correctly - the Unwired/Austar WiMAX networks will prove to be a unique and frightening competitor for the Telstra local loop monopoly.

    3G GSM/HSDPA vs WiMAX Renai LeMay -- 18/11/05 (in reply to #120123451)

    hi Mitchell,

    thanks for your comments!

    I take your point and agree that the Unwired/Austar WiMAX networks are probably already causing Telstra to make plans against them. But at least for now, Unwired hasn't expanded out of Sydney, and Austar hasn't launched any part of its network yet. With the other carriers already have a lot of infrastructure rolled out, the game has just gotten a lot harder particularly for Unwired.

    In many ways Unwired's early success is a green light for competitors to enter its market.

    But it'll be interesting to see what happens anyway! Competition is always good for consumers.

    Cheers,

    Renai LeMay
    (the author)

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