The WiMAX monetization challenge: When and how?

Logo WiMAXWhile some WiMAX players, such as Sprint, are still just dipping their toes into the waters, others are already gaining an early advantage by diving in to this wireless market, with innovative platforms that include supplemental ads.

Early deployments of WiMAX are now unfolding, but how do operators expect to monetize these 4G broadband wireless networks going forward? Although Sprint is indecisive so far about what to do with its Xohm WiMAX network, NextWave has already formulated a monetization model for MXtv, a recently unveiled mobile WiMAX platform aimed at 2.5 GHz wireless broadband networks such as Xohm, 2.3 GHz alternatives such as NextWave's own network, and regional wireless providers in both the 2.3 GHz and 3.4 to 3.8 GHz spectrums.

NextWave is poising MXtv to compete against existing 700 MHz mobile broadband wireless services such as Qualcomm's Mediaflo, said John Hambridge, the company's CMO, in an interview with BetaNews. Unlike these 700 MHz mobile services, he said, MXtv contains a built-in uplink capability that will allow for TiVO-like interactivity in terms of both personalized entertainment programming and targeted advertising services.

Beyond offering the mobile TV, radio, data, and advertising service via set top boxes, in-car systems, and other devices on NextWave's own regional broadband network in the US, NextWave is selling the platform to other providers, too.

"We have a full product suite," according to Hambridge. The suite includes the WiMAX System-on-a-Chip (SoC), along with MediaFusion, a multimedia content and advertising client-server software packaged produced by PacketVideo, an entity that became a NetWave subsidiary following its acqusition.

Meanwhile, on Friday, NextWave announced the issuance of $50 million in stock to 92 employees of IPWireless, through a deal offered last May as an inducement for those employees to stay aboard with NextWave after its buyout of that company.

In one of several pilots currently going on in the emerging WiMAX industry, NextWave will test MXtv in London with Orange and TK-Mobile UK during the second half of this year. It has also signed strategic deals with both Alcatel-Lucent and Chinese gear supplier Huawei.

Alcatel-Lucent will integrate NextWave's MXtv technology into its WiMAX portfolio, based on the 802.16e-2005 (Rev-e) standard. Huawei plans to integrate MXtv into its own WiMAX networking kit.

At the same time, WiMAX deployments are also heating up among other manufacturers and overseas providers. Last week, Motorola and Thailand-based fiber optic service provider UIH announced plans to test a mobile WiMAX service in Bangkok and Phuket, Thailand.

The 3.4 to 3.8 GHz piece of the spectrum targeted by NextWave hasn't really been tapped yet in the US, noted Jeff Orr, a senor analyst at Maravedis, a Montreal-based market research and analysis firm focusing on the telecom industry. The 2.5 GHz bandwidth might not be the sweetest spot for MXtv in the United States, since together, Sprint and Clearwire now hold the largest chunk of that particular part of that spectrum.

Ultimately, he predicts convergence between WiMAX and LTE (Long Term Evolution), an effort within a group called 3GPP (Third Generation Partnership) to upgrade the current UMTS standard to release 8 and an architecture known as EPS (Evolved Packet System).

Verizon and AT&T Wireless, two LTE adherents, have been busily nailing down the 700 MHz spectrum in the US. "LTE networks won't even become available until the 2010 to 2012 time frame," Syputa said. "And right now, WiMAX and LTE are incompatible at the component level."

But movements are afoot within standards groups to eventually create interoperability between the WiMAX and LTE protocols, as well as to allow WiMAX to operate in the 700 MHz bandwidth, he said. The WiMAX Forum is currently working on 700 MHz WiMAX profiles.

Generally speaking, the 700 MHz band is seen as offering advantages in terms of wider coverage range and greater ability to penetrate tree coverage and other obstacles. But services running in the higher bandwidths can carry much more data.

At the same time, silicon foundries are readying various combos of multi-frequency chip sets for broadband wireless.

For the moment, WiMAX players hold an early market advantage over their LTE rivals, according to the Maravedis analysts. Yet convergence between WiMAX and LTE could spell greater competition for these players, as well as more opportunities.

Source: BetaNews

Tags: WiMAX

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