Opel pays $65m for Wimax spectrum

JOINT-venture regional broadband provider OPEL has shelled out US$65 million to acquire Austar’s 2.3GHz and 3.5GHz spectrum to set up its national WiMAX voice and internet service.

OPEL is the joint-venture company between Optus and Elders which won $958 million in Federal funding last year to assist the construction on a broadband network covering rural and regional Australia.

Access to the Austar licensed spectrum will allow the OPEL Venturers to build a state-of-the-art WiMAX network which will keep pace with the developments in international standards.

The OPEL network will ensure that regional Australians have access to a broad range of world's best broadband access technologies including WiMAX and ADSL2+.

The OPEL venture has been incredibly quiet since it was awarded the Federal funding last year. Even the $65 million acquisition of critical spectrum from Austar went unannounced (it was left to Austar to trumpet the sale.)

The awarding of the funding has been fraught with controversy and is now the subject of a Federal Court case between Telstra and Government.

The funding had consisted of $600 million Broadband Connect Infrastructure Program funding which the joint venture bid for. But it also included an additional $358 million in additional funding to extend the regional network that Telstra has cried foul over – saying it wasn’t given a chance to bid for the extended network.

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WiMAX: 80m subscribers in 5 years

THE number of subscribers to WiMAX mobile broadband services will start to boom in 2010, and will exceed 80 million globally by 2013, according to Junior Research.

The report says that more than 50 Mobile WiMAX 802.11e trials and network contracts had been announced in this year, and that the WiMAX market was active in all geographies.

Juniper Research’ report author Howard Wilcox says the value of Mobile WiMAX services revenues would grow to US$23 billion ($26.1 billion)

The ‘Mobile WiMAX: Global Opportunities, Strategies & Forecasts, 2007-2013’ found that the US, Japan and South Korea would be the three largest markets for WiMAX.

Australia is already becoming a WiMAX player – and per capita could become one of the biggest users, with large-scale plans already in motion to roll-out WiMAX nationwide as part of the previous Government broadband schemes.

Mr Wilcox said there were several wildcard factors could increase the size of the WiMAX market, including the emergence of low cost laptops, and adding broadband capability to devices like MP3 players, and games consoles.

“Mobile WiMAX will be a device-based technology, whether handsets, laptops, datacards, or other types of consumer device such as media players,” Mr Wilcox said.

“The twin challenges are for vendors to produce the right devices at the right time and price, and for Mobile WiMAX service providers to differentiate their offerings from existing mobile operators,” he said.

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Boom looms for mobile broadband

THE global trade association for the mobile industry, the GSM Association (GSMA), says there is a vast untapped worldwide market for an additional 70 million mobile broadband-capable notebooks.

The association published results of a survey conducted with Microsoft that shows a market worth US$50 billion (A$56 billion) in 2008 for notebook PCs in the high growth, mass market US$500 – US$1,000 price-range with built-in mobile broadband.

GSMA says the results suggest PC makers had not yet hit the configuration/price sweet spot in the mobile broadband market, and that there remains a lot of latent demand.

It reveals a gap of up to 46.5 million units between recent industry analyst forecasts and the new analysis, suggesting that PC manufacturers have yet to deliver the right mobile broadband PCs - bundled with pre-configured mobile connectivity - to appeal to mass market PC buyers.

The market research, by Pyramid Research, involved more than 12,000 consumer interviews across 13 countries, with input from notebook manufacturers, component companies and chip set suppliers as well as more than 200 field trials.

“With the right form factor, price and ‘out-of-the-box’ connectivity, the research has unearthed substantial demand for mobile broadband embedded notebooks that is not yet being met,” said GSMA chief executive officer Rob Conway.

“Now that we understand the market potential and consumers’ requirements, we are pleased to communicate the findings to the broader industry eco-system,” Mr Conway said.

Leading PC manufacturers, including Asus, Dell, Fujitsu Siemens, Lenovo, Twinhead and Vestel have welcomed the research report and expressed interest in working with mobile operators and the GSMA to fulfil this market demand.

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Govt broadband a sham: Thinktank

A conservative thinktank with close links to the Liberal Party has attacked Government’s WiMAX broadband plans, saying network coverage will be less than 50 per cent of the area government has claimed.

The Institute of Public Affairs has released a report that redraws the network coverage maps with a more conservative estimate of WiMAX range capabilities and taking into account topographical features. Its conclusions are grim.

The Mebourne-based Institute of Public Affairs is described by the web site sourcewatch.org as being closely associated with the Liberal Party, with its executive director having been pre-selected by the party in a number of elections.

IPR Research Fellow Chris Berg says the estimates of WiMAX range were overly optimistic when government was considering regional broadband proposals. The awarding of a $950 million in government subsidies to the Optus Elders joint venture Opel were overly optimistic as a result.

Originally, Government claimed WiMAX range could be as high as 70 kilometres – wildly optimistic. It later wound this claim back to 20 kilometres, which IPR says is still far too generous and does not take into account topography.

“When the maps of WiMAX coverage that were paraded around by the Communications Minister after the Opel announcement are redrawn with a more realistic range, the difference is stark,” Mr Berg says.

“A more likely range for the WiMAX deployments would be in the region of five to ten kilometres. To be uncharitable, when considering environmental and topographical factors, a maximum range of as little as one or two kilometres is entirely possible,” he said.

The IPA report also notes that: “The need for a fibre-optic network in Australia is manifestly clear.”

Labor Communications spokesman Stephen Conroy seized on the IPR report, and called on Government to come clean on the real coverage of its broadband plan.

“Only Federal Labor has a plan to drag Australia out of the digital dark ages, ensuring all Australians – including those in rural and regional areas – have improved broadband services at an affordable price,” Senator Conroy said.

“Federal Labor’s network will be open access, creating a competitive framework to drive consumer prices down,” he said.

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Cisco acquires Navini, targets WiMAX

AFTER years of disinterest, network giant Cisco Systems has thrown its weight behind the WiMAX standard, buying Texas-based WiMAX specialist Navini Networks for US$330 million (A$358 million).

The Richardson, Texas-based Navini is a leader in mobile WiMAX 802.11e-2005, announcing during the week that it had signed a definitive acquisition agreement with Cisco.

Navini has been a pioneer in the integration of “smart beamforming” technologies with Multi-Input, Multi-Output (MIMO) antennaes, a combination that improves WiMAX performance and range while lowering operational costs for service providers.

Cisco said in a statement that Navini’s products would extend Cisco’s WiFI and WiFI-Mesh product range. The company said it expects the broadband wireless market to be one of the fastest growing and that Navini expertise would help realise its IP Next Generation Network (IP NGN) plans.

After years talking down WiMAX systems, Cisco has changed its view of the technology.

Cisco senior vice-president and Service Provider Technology Group general manager Tony Bates said WiMAX had matured, and that Cisco had been listening to the demands of its customers.

“Recently, the WiMAX radio systems to deliver broadband wireless have matured, customers are deploying live networks, and overall investment and demand as increased,” Mr Bates said. “Therefore, Cisco views this as the proper time to add licensed WiMAX products to our broadband wireless offer.”

“Also, given the IP-centric nature of the WiMAX technology, it is a natural fit for Cisco's strategy, experience, expertise, and IP NGN product portfolio,” he said.

“Licensed WiMAX radio systems represent a strategic opportunity for Cisco to quickly address the pent-up demand for broadband connectivity in emerging countries where penetrations are comparatively low.”

Under the terms of the agreement, Cisco will pay approximately $330 million in cash and assumed options. The Navini acquisition is subject to various standard closing conditions and is expected to close in the second quarter of Cisco's 2008 fiscal year.

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Israeli WiMAX goes bush with Allegro

QUEENSLAND-based Allegro Networks says it will have Australia’s first business-grade WiMAX broadband network operational within 90 days.

The company said it had selected Nasdaq-listed Israeli WiMAX vendor Alvarion as its technology partner after the completion of months of technical and commercial trials with several vendors.

Alvarion was also the WiMAX technology of choice in the recently announced plans of OPEL, the Optus/Elders joint venture rolling out services in regional and rural Australia.

The Allegro announcement, coupled with the Federal Government’s backing of the OPEL business plan, suddenly makes Australia one of the biggest backers of the WiMAX standard in the world. And it will shortly be one of the biggest users.

Allegro will build the network utilising licensed 3.4 GHz spectrum, in the process achieving market leadership in the business grade WiMAX broadband market, ahead of the likes of Unwired, Austar and Opel.

The high-speed Allegro WiMAX network will provide converged voice and data services to thousands of businesses in the outer metro and growth corridors across south-east Queensland.

Alvarion’s BreezeMAX will be used for the deployment.

“WiMAX has a key role in establishing a robust, affordable, and efficient broadband network in Australia,” said Allegro chairman Ted Pretty.

“In broadband terms, regional Australia starts closer to the city than people think. In Brisbane it is about 10km away from the CBD. These businesses … can’t wait until 2009 or 2013 to receive advanced services,” he said.

“Alvarion was the one company able to meet our deadlines while maintaining the required quality of service (QoS). We chose Alvarion for its proven WiMAX network and the first base stations are to be delivered imminently,” Mr Pretty said.

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Asia reaches 1.1b mobile subscribers

THE fast growing Asia-Pacific mobile telephone market shows no sign of slowing and will boast more than 1.14 billion subscribers by the end of the year, according to research group Frost & Sullivan.

The company said subscriber growth in the region had been driven by dramatically falling mobile call costs, reduced handset prices, and the expansion of network infrastructure in key emerging markets like India and Indonesia.

The region remains one of the few truly fast growing regions in the world, with booming economies, large populations and still small mobile penetration rates.

The report highlighted the remaining potential for growth.

For example, with 142 million subscribers, India overtook Japan as the region’s second biggest mobile market after China. Yet mobile market penetration in India is just 13 per cent, meaning the market is still largely untapped.

The Frost & Sullivan Asia Pacific Mobile Communications Outlook 2007 study looked at 13 major regional economies. The report found Subscriber numbers across the region had growth at a compound annual rate of 24 per cent between 2002 and 2006.

“The impact of the emerging markets on the rest of the region is likely to grow in significance as regional carriers search for sustainable growth, and as economies of scale further drives down 3G handset prices,” said Frost & Sullivan industry manager Janice Chong.“

“Of the expected 190 million net subscriber additions in 2007, 90.8 per cent are likely to stem from the emerging markets” Ms Chong said.

Mobile broadband is likely to be the next killer application in the region’s promising mobile landscape. The business case for 3G may not lie in 3G itself, but in 3.5G – commonly known as high speed downlink packet access (HSDPA).

“HSDPA and WiMAX (worldwide interoperability for microwave access) are expected to play a prominent role in 2007, given the number of trials that have taken place in 2006,” Ms Chong said.

While the launch of HSDPA has taken precedence in certain countries, WiMAX may still be the focus in emerging markets like India and Indonesia.

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Business case for WiMAX remains grim

ONCE seen as a possible silver bullet for introducing broadband services, the WiMAX standard is losing its lustre, with new research saying there are few circumstances where WiMAX can be profitably introduced.

Early business cases from the WiMAX community showed attractive potential returns from a variety of environments – from both developing and developed markets, and in urban, suburban and rural settings.

But a report from UK-based researchers Analysys says “more realistic modelling reveals there may be very few situations in which WiMAX has a secure long-term business case.

The ‘Business Case for WiMAX’ report says that developing countries offered few real opportunities for WiMAX, despite being cited previously as the standard’s prime opportunity.

While WiMAX had the opportunity to “seize control” of broadband markets in developing countries that did not have fixed-line infrastructure, the report says a low-level of disposable income in those markets low PC penetration limited growth rates and limited attractive ARPU (average revenue per user).

Voice telephony would be the most important service to users in developing countries – and most already had low-cost mobile services with low-cost handsets. The relatively high cost of WiMAX customer premises equipment (CPE) was another barrier in developing countries.

Developed markets were attractive to potential WiMAX operators in only in a special set of circumstances.

“In developed markets, head-to-head competition with DSL could be disastrous for WiMAX. DSL performance is continually advancing, and operators are offering new services such as IPTV,” Analysys’ US Head of Research Jason Kowal said.

“WiMAX operators will struggle to carve out a significant share of the fixed broadband market, confining them to the much smaller, and somewhat uncertain, opportunity of mobile broadband access,” Mr Kowal said.

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