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WiMAXThe Business Case for Investors By Glenn Poulos mmwave Technologies Inc. A wholly owned subsidiary of The Wireless Age
Founded in 1991 ~ 30 employees Private, consistently profitable company Canada’s Profit 100 Ranked 8th in 2001 and 21st in 2002 Member of WiMAX forum on Broadbandwireless Focus on wireless, microwave and fiber optic communications and test solutions 6 Offices Montreal, Ottawa, Toronto, Calgary, Vancouver, Seattle ISO 9000 Registered Wholly owned by Wireless Age Communications Inc. mmWave Technologies Inc.
What We Do… • Turnkey Wireless Systems • Microwave Backhaul • Wireless Access • Hybrid Wireless/Fiber builds where required • Frequency planning and License application • Cellular/PCS/SMR Coverage analysis, optimization and enhancement • Maintenance and problem solving • Test Equipment & Systems
What is WiMAX? • New standard for broadband wireless access • ‘Worldwide Interoperability for Microwave Access' • WiMAX is similar to Wi-Fi • Spectrum Efficient • Flexible • Quality of Service
Is WiMAX different from Wi-Fi? • WiMAX is to Wi-Fi as Cellular is to a Cordless Phone • Primarily consumer • License-exempt spectrum • Low cost • Mass market product • Low Power • Carrier Class • Licensed spectrum • Higher Cost • High Power
What about 3G? • 3G is built on the foundation of a voice network • WiMAX (802.16e) will be much higher speeds • Does WiMAX help or hurt 3G? • WiMAX is very targeted for wireless data, not wireless voice.
More on WiMAX • Will primarily use licensed spectrum • Higher power increases distances • Kilometres vs hundreds of feet • Metropolitan area access technology • Quality of service • Triple play enabler
Is that it? • Cellular and WiFi took time to achieve interoperability while WiMAX will have interoperability from Day One • WiMAX will complement all existing and emerging 3G mobile and wireline Networks. • 3G is optimized for mobile voice and data • 802.16-2000 WiMAX is optimized for providing high peak rates to end-users while stationary.
WiMAX EV-DO GPRSHSDPA WiMAX 802.16e WiMAX WiMAX WiMAX The Wireless Lifestyle™ The Internet Cloud FUTURE
Security • Security concerns are paramount • WiMAX when released will be secure. • Wi-Fi typically uses wired equivalent privacy (WEP) • WiMAX will used enhanced encryption for: • Confidentiality • Access control • Data integrity • The system isn’t entirely foolproof but what is?
Bandwidth • WiMAX 802.16 equipment certified by the forum • Support shared throughput of up to 75 Mbits/sec • WiMAX can thus compete with existing technologies • 3G cellular • Copper based services • Wi-Fi
Performance • Unlike other broadband wireless technologies such as early MMDS systems: • WiMAX doesn’t require a clear line of sight (LOS) between the base station (BTS) and the customer premises equipment (CPE). • WiMAX can serve a much broader pool of customers than previous LOS solutions.
Coverage • WiMAX Forum certified base stations (BTS) will have a coverage radius of 5 to 8 km (licence exempt) • Depends on terrain and population density • NLOS – Non Line of Sight
Spectrum • Uses both licensed and license-exempt spectrum between 2-11 GHz • Future support for 66 GHz • Wider choice of deployment options based on geography, population density
Industry Support • More than 150 equipment vendors and service providers are currently members of the WiMAX forum, including mmwave. • This widespread support strongly suggests that the technology will go mainstream. • Unlikely to be a “Flash in the Pan”.
Interoperability • Primary appeal is interoperability • WiMAX does not use proprietary standards, unlike current technology • WSP and End Users alike can purchase equipment from different vendors. • Allows for competition and drives down prices.
WiMAX Applications • If you can do it on cable or DSL you can do it on WiMAX. • Backhaul • Cable/DSL extension or competition • Fixed/Mobile Convergence • Mobile Services • Video delivery
So what can you “do” with WiMAX • Deploy markets where wired broadband is not cost effective • Allows spread of broadband more quickly • Allows higher speeds farther away • Easier to install
WiMAX Blurring the lines • CLEC’s and non-dominant carriers don’t need to re-sell ILEC facilties • Portability increases attractiveness relative to fixed-line DSL • People will be able to carry their personal broadband connection with them
Converged Wireless Networking • Wireless Service Providers can: • Leverage existing subscriber management system and network management capabilities • Reuse infrastructure, such as towers • Provide additional multimedia services
Converged Network Reality • Gives Service Providers a cost-effective way to offer new high-value multimedia services • It can support the sophisticated “Wireless Lifestyle™” services that are increasingly in demand • IP-based solution • opens up cost-effective new opportunities for extending bandwidth • delivering new revenue generating services such as wireless video streaming.
WiMAX Challenges • Number one is spectrum. • Will the volume REALLY be there to drive down the costs? • Meeting people's expectations. • WiMAX is on a very fast track • It will continue to add more and more capability every generation. But…. • It will take time to get these capabilities to where service providers and users can really benefit.
"anywhere, anytime connectivity” • You won't have to drive around looking for a connection • When people have a broadband connection • they tend to use their computer more • they leave it on • they integrate it more into their lifestyle. • Extends range of broadband access
WiMAX Rollout • WiMAX will be rolled out in phases: • Pre-WiMAX • IEEE 802.16-2004 technology - known subscribers within a fixed location • IEEE 802.16e - mobile users • This is the “killer app” for WiMAX and what will drive the volume
WiMAX, the Business Case • One of the most eagerly anticipated developments in a long time • Will significantly change the telecommunications landscape • CLECs can provide a real broadband alternative using their own infrastructure • ILECs can deploy high-speed access in formerly unprofitable regions • WISPs using Wi-Fi can evolve to higher speeds • Will provide a carrier-class IP-based solution that can scale to support thousands of users, and provide differentiated service levels.
The WiMAX Debate: When is it Ready? • The first 802.16d product certifications will be issued in Q3 2005 • Early WiMAX profiles include many different options • Volume will be driven by portability/mobility applications, such as notebooks and PDA's which comes with 802.16e • WiMAX-certified 802.16e products are scheduled will be 2006/7
This isn’t Wi-Fi all over again • Wi-Fi volume ramped quickly because millions made a small decision • WiMAX volume will be driven by a relatively small number of strategic decisions to deploy large-scale networks. • Long decision cycles • Large capital outlays • So what should carriers do today?
So what should carriers do today? • Many are deploying a pre-WiMAX solution now • Long-term upgrade path is a vital ingredient • Trade-off is risking instability to be first to market vs waiting for a stable WiMAX solution at the risk of losing market share • Most successful will be those who best navigate this period of uncertainty and risk
WiMAX Will Remove Roadblocks to Growth • Pre-WiMAX Wireless access equipment costs are high • Every broadband supplier has proprietary technologies. • Major operators will not risk large-scale investments without standardization • Line of sight (LOS) limitations overcome • Cost of “truck rolls” still high
Market Trends • Fixed Wireless shipments rising steadily since 2002 • Vendors and Service Providers have multi-million dollar contracts on the go • Bandwidth demands will continue to increase • Residential and business subscribers worldwide are constantly demanding faster connections. • Shipments of 802.16e will grow exponentially after 2007
WiMAX Trends • Mass production will allow economies of scale follow • Costs falling • Chipsets will no longer custom-built and expensive • Large volumes will drive down price for chipsets and other BWA components. • Cost reduction impact will likely be on the CPE in the first 1-2 years of WiMAX deployments
WiMAX Trends • Service providers need better coverage to make money. • The ability to deliver access without truck roll • Provides the ability to for triple play services The HOLY GRAIL is “Triple 50”
Mobility Trends • 802.16.e aimed at providing broadband access to the mobile user (PDA or laptop) • 802.20, if it materializes, addresses high-speed mobility issues and could emerge as a viable competitor • Most BWA vendors are committed to implementing 802.16e in their product roadmaps. • Laptops will have 802.16e chipsets.
Chipset Vendor Trends: • Intel focusing on CPE and integration of chipsets into laptops • Fujitsu leads the charge for BTS development • They are to BTS what Intel is to CPE. • Canadian company Wavesat is targeting this market and has extensive experience developing OFDM chipsets • Can a small company triumph in this game?
Market Size Forecasts • Market growing from $430 million in 2003 to $1.5 – 2.0 Billion by 2008 • The BWA market will likely pass $1 Billion 2006-2007 • More multi-million dollar projects needed • Shipments of WiMAX chipsets will likely pass 1 million units in 2007-2008
Crowded Market • Crowded market has pro’s and con’s • Unlikely you’ll see the “wheels fall off” • Many Vendors however will fail. • Initial casualties will likely take place this year • Many smaller companies will not survive until the market takes off • None of the “big guys” are doing primary development (working with BWA specialists)
Equipment Pricing • Estimates vary these days: • From 10K to 150K for Base Stations • Initial CPE’s are pegged at US$750 however prices for CPE’s will ultimately fall but to where???? • Pricing pressures will squeeze a lot of vendors out of the market especially those already on shaky financial ground.
Where to Invest • Ask yourself: • What technology vendors are best suited to capitalize on the market? • What is the realistic timeframe for market development? • Is now the right time to jump into WiMAX? • Should we wait for the market to develop further before trying to determine who will win or lose?
New Market Opportunities • Addressing underserved subscribers beyond the reach of DSL and Cable • Providing “last mile” access from existing fiber point • Competing where wireline assets aren’t owned • Capturing new subscribers
The Killer App? • Is Mobile Wireless Data the new Killer App? • Industry participants can stake their market share claims • The outcome will be defined by what type of company evolves to capitalize on and provide the types of services, service packages required.
Blackberry • Another Canadian Wireless Success Story! • Blackberry is one of the top three brands of choice for both voice and data. • Can they hold this growth phase straddling both voice and data? • Will one of the huge players from either the voice or the data side break into the lead or just “buy them? • Other companies are close behind with similar features
Batteries • People have dependent on their phones and PDA’s • Combining both voice and data on one device creates a much a greater strain on the battery • Alternative Energy Cells (Fuel Cells) are ambivalent to whose device “wins” in the market if they can provide an alternative which drives longer life. Everyone will HAVE TO BUY FROM THEM! • As exciting as the market is for WiMAX in all its forms. A huge investment opportunity is available to us all in the companies developing the batteries of tomorrow.
Operating Systems • Will Microsoft win in this battle as well? • Companies want a consistent look & feel across all devices • MS-Windows has won the war on the on the PC side • People want to see this on the wireless side as well • There is not similar support however for a single hardware device. • Microsoft is considered to be a critical player in this market and they can capitalize on that.
WiMAX the Make-or-Break Year • 2005 will be the make or break year for WiMAX. • Every major wireless chip and equipment maker is now part of the WiMAX Forum. • Standards are ratified and the interoperability tests among vendors has begun Redline / Alvarion / Airspan • WiMAX has the potential to be as big as a hit on Wireless since Marconi but…. • Significant milestones must be achieved during the year ahead
WiMAX Critical Success Factors • Rapid certification - Certified WiMAX gear • The CPE price must come down. • Enterprise applications to drive corporate uptake • Spectrum policy • The IEEE needs to ratify new standards in a tiemley manner • Moves by major vendors. • Major chip vendors are on board. • Major equipment suppliers must also define and announce clear strategies.
WiMAXThe Business Case for Investors Thank you for your attention! By Glenn Poulos mmwave Technologies Inc.