MARAVEDIS

Article, September November 2006

By Robert Syputa, Partner, Senior Analyst, Maravedis

Among the confusion about where WiMAX and LTE fit with WiFi and cellular mobile are generalizations that these services will appeal to the same users or that they are mutually exclusive and will provide the same level of services. The thinking is actually like saying all transportation is the same and everyone will migrate to just one mode. Carrying this to the extreme begs the question, “When will we all ride bicycles?”:

• Since riding a bike is much cheaper than operating a car, bus or taking a cab and all these modes of transportation take you from one point to another, then obviously everyone will soon be giving up their expensive vehicles to pedal down the road.
• Cities can provide networks of bicycles to cover 90% of the area. Those unable to pay low cost rental fees can take bikes with signage advertising to subsidize the service.
• And certainly users will migrate to metropolitan Wi-Bicycle because cheap is always best.
• Wi-Bicycle Network providers will be happy to spend millions to offer free or cheap service because cheap and unreliable rather than more capable and productive is the growing expectation of the market.

Of course the analogy is ridiculous but perhaps is useful in getting the point across: There are already many forms of communications services and devices, each with pluses and minuses. WiMAX is a new entrant designed to fulfill an emerging set of needs using a more efficient and reliable system of wireless technologies. WiMAX is designed to be a wide area system that provides a high degree of reliability and broader coverage areas. It is unlikely to be offered as advertising based service or otherwise be free to the user. It is developed on the premise that users will continue to scale up expectations for higher bandwidth, ‘always on’ mobile services and are willing to pay for a higher quality service than cheap or free WiFi or less efficient cellular networks can provide.