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The authoritative source of WiMAX information: real data, no hype

Volume 1, issue 17: January 7 2005

DoCoMo’s Super 3G group takes on Samsung and WiMAX 2
Flarion could gain as 450MHz challenges GSM’s grip on Europe 9
Critical success factors in WiMAX’ make or break year 13
MobilePro seeks to cash in on cableco interest in wireless 17

News highlights: 20

Airspan acquires ArelNet
NextWeb joins Forum
WiMAX operators to gain from FCC ruling
Navini adds OSS partner

Super 3G is a part of DoCoMo’s efforts to domi-
nate the 4G market
LG Electronics

WiMAX Watch

DoCoMo’s Super 3G group takes on Samsung and WiMAX

• Super 3G backed by Vodafone and DoCoMo to fend off WiMAX
• Asian 4G initiative splits between Samsung and NTT
• Korean vendors look to dominate 4G through 802.16
• LG hits out at DoCoMo’s agenda
• But the gulf is political, not technological

The start of the new year saw two important, and not unrelated,
events in the world of next generation wireless networks. A
group of companies spearheaded by Japanese operator NTT
DoCoMo announced plans to develop ‘Super 3G’, while Korea’s
Samsung finally joined the WiMAX Forum.

The reason these two events cannot be viewed in isolation is that
they show the Asian-led move to create the fourth generation net-
work being split down the middle. The two main movers and
shakers to date in creating platforms for future 4G, DoCoMo and
Samsung, are taking very different paths to achieving their aim of
a new mobile generation that will be driven from the East, not the
US and Europe.

DoCoMo has to stay faithful to its W-CDMA roots and Super 3G
shows it marshalling the forces of this market to stand against
threats from WiMAX, while Samsung is embracing WiMAX as
the most likely future basis of 4G, and seeking to take a dominant
position in that community.

These two developments highlight several conflicts whose out-
come will shape mobile communications in the second half of the
decade. The Super 3G group, which also includes Vodafone and
many large vendors, is technologically redundant, when set
against the existing 4G development efforts (by individual ven-
dors like Nokia and bodies like 3GPP), plus the emergence of

2 Distributed in North America by TrendsMedia

the Japanese giant merely aimed to launch new technologies ahead of the world. In the past. it is a clear signal from the domi- nant players in cellular networks that they aim to stop the devel- opment of 4G falling into the hands of factions with different agendas from their own – particularly the vendors that are back- ing WiMAX as the next generation network. However. threatening to reduce the cellcos to bit carriers. with few really fundamental differences of approach between WiMAX. Last fall. a popular approach for WiMAX that employs arrays of antennas to send data in multiple paths. it recognizes. Technologically. just a month after Siemens showed similar performance us- ing WiMAX-like OFDM. like Intel in the WiMAX camp. and Qualcomm’s plans for a future for CDMA2000. MIMO (Multiple In Multiple Out). DoCoMo admitted the distances were short. Both would seriously threaten the business assump- tions on which large cellcos built their expensive plans for 3G and beyond. In the DoCoMo demo. that it needs to work with its international rivals to influence global stan- dards rather than staying in its own technological island. The stakes are highest of all for DoCoMo. NTT DoCoMo’s technology: The Super 3G members claim they will have specifications. by mid-2007 and working systems by 2009. Copyright Rethink Research Associates 2005 3 . a downlink speed of 1Gbps was achieved in a laboratory experiment using a combination of VSF (Variable Spreading Factor) Spread OFDM and the smart an- tenna technique. and the focus – as in Wi-Fi – will be on the device rather than the network. in a car running at 30 kilo- meters per hour at around 800 meters from the 4G base station. DoCoMo demonstrated down- stream data rates of 300Mbps with an average rate of 135Mbps. the various factions are far closer together than they are politically. based on the current W- CDMA technology. new operators will be able to enter premium mobile services with relative ease. which has invested more than any other company in 4G and seeks to drive the global agenda. DoCoMo’s 4G experi- ments for next generation W-CDMA. and that its techniques are mainly focused on rapid downlink. This was clearly shown by DoCoMo’s demonstration of 1Gbps 4G connections in its labo- ratories just before Christmas. In that model. Now. its FOMA proprietary implementation of W- CDMA 3G. with uplink speeds not disclosed. since the experiment was indoors. often in a ‘pre- standard’ mode that was incompatible with other networks – most famously.WiMAX Watch broadband wireless.

but which now have a second bite at the mobile cherry. while others like Wi- Lan are showing off connections at high speed. run at 100Mbps while mo- bile and 1Gbps when fixed. from cashing in on cellular net- works. Once slated for commercial deployment in the 2010-2015 timeframe. Already companies like Motorola and Siemens are demonstrat- ing OFDM networks at close to 1Gbps. with very little consensus on what exactly a 4G network will comprise. by choice or market failure. Good news for all those equipment makers and operators that have been excluded. fixed and mobile network that could deliver 4G performance – as defined above . and span fixed and mobile communications. Instead. Good news for users demanding applications such as mobile television or heavy duty corporate data exchange – neither really satisfied by 3G – since these facilities could be offered far earlier than expected. as WiMAX holds out the prospect of a globally harmonized. should be IP-based. Now that has to change. There are basic definitions – 4G. support next generation applica- tions such as high definition television to the handset. and despite early stage demonstrations by DoCoMo and others. according to the ITU and other industry forums. WiMAX Watch The evolution of 4G: This will put new impetus behind the creation of 4G. 4 Distributed in North America by TrendsMedia . to gain return on their huge investments in 3G. and at better prices. the project has remained very much confined to the laboratories and standards bodies.before the end of the decade. technological consensus has not been reached. up to 100 kilo- meters per hour. Very bad news for operators – and for suppliers that are too heavily dependent on GSM or CDMA networks – who are stuck with a 3G technology that may have a shorter lifespan than expected. but they will not be able to exploit those technologies in moving to the next generation. But specifics on how this would be achieved have remained vague. but weighted down by a massive legacy burden. Not only will it be harder. if 4G standards are dominated by a different set of interests and technologies. they will be starting on a level playing field with the new en- trants.

Samsung’s decisions: This enormously important claim has been largely possible be- cause of the Korean vendors Samsung and LG Electronics. not risk another split. and some key vendors – is fighting back aggressively. One lesson learned must be that the two cellular communities must band together to create 4G. Vodafone. whose current dominance depends on the mass implementation of their 3G cellular networks – DoCoMo itself. is also a member. and argued that this should be the basis of the upcoming mobile version of WiMAX. especially since WiMAX can now of- fer the promise of the world’s first globally unified mobile stan- dard.16e. All of these have shied away from broadband wireless or any next generation technology that would involve a difficult migration from 3G. and mainly by W- CDMA. Intel and others initially resisted such a move. Sam- sung was the main force in developing the Korean Wi-Bro stan- dard for OFDM-based broadband mobility. 802.WiMAX Watch Cellular sector bites back: The cellular community – led by uber-operators DoCoMo and Vodafone. one for Asia and one for the Spectrum for ad- vanced wireless net- works Copyright Rethink Research Associates 2005 5 . threaten- ing to create two rival networks. the controller of the rival 3G stan- dard CDMA2000. although Qualcomm. US market leader Cingular Wireless and China Mobile lead the pack. The line-up of its 27 initial supporters is telling. This is very much a group led by carriers. Here are many of the world’s largest cellcos. with Super 3G just the latest defensive position against the rise of a 4G based on WiMAX.

the collaboration of China. they are now in a position to dominate. such as Samsung’s annual 4G Vision Forum. increase their own influence and revenues. Now. for some years. Samsung and DoCoMo have been. however. not only accelerating the standards process but holding out the prospect of a globally agreed standard. the most vo- ciferous movers behind 4G development. reducing the power of the European and US com- panies in this critical sector. whose suppli- ers are less technologically advanced. which it would argue will be the basis of 4G. With its actions. but disagree on the technologies involved. to raise awareness and attract industry interest. That number will rise signifi- cantly because of Wi-Bro. but consensus was reached last fall. Samsung and LG see WiMAX as a technology that. Asian-driven 4G: Their aggression has not just been about commercial leadership but about swinging the balance of power in the mobile industry towards Asia. the Korean giant. 6 Distributed in North America by TrendsMedia . with Intel and LG agreeing to lead the effort to harmonize Wi-Bro and 802. they have the important backing of China. and their corporations aim to take advantage of this to set the global technology agenda. Japan and Korea have the most ad- vanced deployments of mobile and broadband networks in the world. Japan and Korea to drive 4G is fragmenting somewhat. Samsung holds hundreds of patents related to 4G and says over 100 of its patents are incor- porated in 3G and 4G standards. In this. The main parties involved agree on the principle of an Asian-driven next generation. thanks to the Wi-Bro compro- mise. and to a lesser extent its compa- triot LG. with extensive R&D programs and initiatives.16e. WiMAX Watch west. has positioned itself to take the role of a Nokia or a DoCoMo in mobile WiMAX. and which could deliver real world 4G before 2010. The new friendship was sealed this week when Samsung offi- cially joined the WiMAX Forum as a principal member. but which is keen to ally with Japan and Korea and use the weight of its market size to gain bargaining power for the region. and reduce the burden of royalties to western suppliers such as Qualcomm.

"Super 3G plan seems to be a part of NTT DoCoMo’s global strategy. Qualcomm and other key Copyright Rethink Research Associates 2005 7 . Lucent and Motorola. We expect current CDMA operators to gain a far smoother path to ‘4G’ than their W-CDMA rivals.tion to a similar pro- tiatives. to work outside the industry standards proc- ess. has to pursue a different technological route. are of course in the ject while 4G stan- new body. but a need to keep a toehold in a fundamen- tally hostile camp. “ Super 3G is a part of its efforts to dominate the 4G market by Super 3G is a part of drawing attention to a similar project while 4G standardization is DoCoMo’s efforts to under way. DoCoMo’s friends.WiMAX Watch Reactions to Super 3G: DoCoMo. such as NEC. However. one that aims to preserve the W-CDMA heri- tage.” dominate the 4G mar- ket by drawing atten- Most vendors. once again. the presence of these two CDMA giants does not indi- ” cate genuine support. Such moves are likely to drive Qualcomm and the CDMA sector even more rapidly towards creating a migration path for CDMA2000 that will move smoothly to WiMAX or other OFDM technologies. but so are Alcatel. excluded from this party. all dardization is under companies with interest in WiMAX but with a need to follow any way. The efforts of the various technology groups should be pooled to create 4G. Samsung dismissed it as “just a DoCoMo event”. it ar- gued. The companies involved in Super 3G project did noth- ing but declaring their intention of starting something. not allowed to fragment the standard. Siemens. Even Samsung itself is said to be joining. hence the creation of the Super 3G group. will keep a watching brief on both ini. alongside Qual- comm. This is not unusual behavior – Samsung’s usual policy is to sup- port any potential standard and see what the market demands.” technology that could be demanded by their key customers in LG Electronics future. On announcement of the Super 3G group. so we don’t take it seriously. LG Electronics said: "Considering DoCoMo has always been the first to develop new technologies but failed in expanding market share due to staying away from global trend of standardization. Qualcomm has shifted in this direction al- ready with its OFDM-based FLO platform and has started filing patents enthusiastically in this area.” said a spokesperson to the Telecom Ko- rea publication. of course. claiming the Japanese company was trying.

leap on to a technology that. is just around the corner. for all its faults. Hybrid mo- bile networks will be a possibility from 2007 and a true 4G sys- tem will be viable before the end of the decade. OFDM than the GSM world. as the CDMA carriers. Clinging to it and taking on the expense and risk of a whole new standards path could be suici- dal. and will be held back by conflicts with other developments. WiMAX Watch CDMA suppliers are more focused on integrating with. and are focus- ing on a technology that is already highly developed. While this may have more in common with W-CDMA and so offer a smoother technological upgrade once it arrives. it is likely to take many years to evolve.which cannot be ignored by the ven- dors – down a route to a shiny new 4G technology. There is already a strong feeling that W-CDMA operators may be stuck with an inferior technology. 8 Distributed in North America by TrendsMedia . and a huge group of new entrants to mobility. By contrast. and even- tually migrating to. including WiMAX and other 4G pro- jects. all of which will cause confusion and will dilute the R&D resources of the supplier community. W- CDMA operators face being pushed by the decisions of the heavyweights among them .

Flarion is also relevant to the other main area of challenge to GSM hegemony. And spectrum is now becoming available for some of these alter- natives. over the US and Asia. and Flarion Flash-OFDM. to give opera- Copyright Rethink Research Associates 2005 9 . Europe was widely regarded as a GSM-only zone. that uniformity was one of the chief advantages of the region. these bands can now also support Flash- OFDM. Now they are being driven by various trends. the main contenders are WiMAX. and it is not inconceivable that WiMAX would look to create a profile here too. For high bandwidth applications.5GHz auctions going on around Europe. which can work in many bands. in communications terms.WiMAX Watch Flarion could gain as 450MHz challenges GSM’s grip on Europe • T-Mobile and Inquam gain German 450MHz licenses • Gives non-GSM technology a foothold in Western Europe • T-Mobile likely to use Siemens/Flarion Flash-OFDM • Inquam to spread CDMA450 into new territories • Business PAMR market set for a revival with the new licenses Until recently. or the high price of the licenses. but because alternatives are looking more attractive in certain markets in terms of price/performance and the business model. which can take advantage of the rush of 3. Once the exclusive preserve of Qual- comm’s CDMA450. which excluded many players from an upgrade path for their services. But in its third generation. W-CDMA. Regulators are under pressure to auction licenses. GSM has been less obviously the right choice than it was in earlier iterations. The 450MHz technologies have remained obscure in Europe un- til the past year. This is not just be- cause of the well publicized delays and teething troubles in de- ploying the technology. Indeed. technologies that operate in the 450MHz spectrum formerly occupied by ana- log mobile telephony.

where 450MHz is far more com- monly used. T-Mobile is the largest operator yet to plan a 450MHz deployment. so that up to 80% fewer base stations are required for coverage. reducing some pressure on its other networks and giv- ing it the opportunity to develop specific services for corpo- rates. it would be a logical choice – though the German cellco says it is weighing up the CDMA450 option too. It will be fol- lowed by Sweden and probably the Netherlands. the trend is accelerated by the entry into the European Union of some coun- tries from eastern European. Flarion signed a development and OEM pact with Siemens to create a version of Flash-OFDM for this band. especially in rural areas. German licenses: The main advantage of the 450MHz spectrum is that signals use a broader cell radius. and since T-Mobile is an investor in the start-up. Finland and Ireland. Also. Germany is the most significant country to make this move. a major economic advantage in sparsely populated areas. and is trialling its gear in other bands in The Netherlands. Its main aim is to deliver business-oriented services in 450MHz. Last year. It will offer PAMR (public access mobile radio) services. without the expense of W-CDMA. WiMAX Watch tors a new option for expanding their networks. Cell coverage and ra- dius in 450MHz Source: Flarion 10 Distributed in North America by TrendsMe- . with the UK also expressing interest. awarding licenses at the turn of the year to T-Mobile and Inquam. and is widely expected to use Flarion’s gear.

healthcare and utilities. offering better security and quality of service than general access cellular.) The company claims there are 20m workers addressable by PAMR in Europe. it is likely that the overall market will grow signifi- cantly for all players in Europe.WiMAX Watch A wideband successor to narrowband PMR (professional mo- bile radio). or taking stakes in spectrum holders. PAMR also lies at the heart of Inquam’s business (Inquam owns the Dolphin PAMR network in the UK. France and Portu- gal and operates similar services elsewhere. Although CDMA is facing a competitor in this spectrum for the first time. construction. Key applications are in the blue/grey collar sector for functions such as security. Inquam’s major shareholder is Qualcomm and its business model rests on buying 450MHz spectrum. There are two technologies specifically aimed at PAMR – GSM-based Tetra2 and CDMA-based CDMA-PAMR – though Flash-OFDM could be adapted for this too. both for PAMR business net- works and general purpose cellular communications where W- 450MHz allocations Copyright Rethink Research Associates 2005 11 . in order to spread the CDMA450 and CDMA-PAMR technologies. or any job where workers are on the move or in non-office sites but need access to company data. both have grown from the public safety sector and are designed for use by non-office workers. logistics. Businesses pay for their own private network.

BelCel of Belarus. Hard on the heels of Germany. In Russia. Also pointing to the expansion of 450 out of a small niche is the roll-out of the first network using the EV-DO third generation version of CDMA in the 450MHz band. Other markets: The top four CDMA manufacturers (Lucent. the UK and Finland are also actively consid- ering how best to allocate and use the 450MHz band. It has three customers for CDMA450 so far . The license will be conditional on covering 80% of the landmass of each Swedish county and will be awarded in March. With its greater power. Huawei sees CDMA450 as a relatively easy route into Europe as it seeks to establish itself in the west in many areas of networking. Huawei and ZTE. as have two Chi- nese players. JSC Uzbecktelecom in Uzbekistan and the Inquam Dolphin network in Portugal. Moscow Cellular Communica- tions and Delta Telecom have both deployed CDMA450 net- works from Lucent while UralWestcom is trialling Nortel kit. Sweden’s regulator. it solves some of the problems of thin spectrum spread that affect x1 RTT in the 450MHz spectrum and could be par- ticularly valuable in rural regions where there is limited wireline broadband infrastructure. The EV-DO system has been supplied by Nortel to Czech carrier Eurotel Praha and will support data rates up to 500Kbps for a low capital expendi- ture compared to conventional CDMA or GSM. Motorola and Ericsson) have all launched 450MHz gear. PTS. Nortel. The Irish regulator has issued a consultation paper and request for expressions of interest for the 450MHz band and authorities in the Netherlands. WiMAX Watch CDMA is inefficient. has in- vited operators to apply for a 15-year national 450MHz license following lobbying by the cellcos. 12 Distributed in North America by TrendsMe- . All previous deploy- ments have used the current x1 RTT version.

operating with very different business models and cost structures. Two things are certain in this hazy picture – WiMAX has the potential to be the most disruptive communications technology since Marconi. while failure could enable the cellular community – Copyright Rethink Research Associates 2005 13 . in later it- erations. and all are to some extent dependent on the others. a phantom technology. Demonstrating concrete progress towards most of them in 2005 should ensure a high level of success for Wi- MAX. and it will only achieve this is significant mile- stones are achieved during the year ahead. WiMAX could quite realistically be the basis. We believe that the critical success factors for WiMAX are as follows. of 4G. Stan- dards are ratified but not equipment has yet been tested or certi- fied for compliance. Every wireless chip and equipment maker of note bar Qual- comm is now part of the WiMAX Forum. most of the assumptions about the pros and cons of WiMAX are based on experience with proprietary broadband wireless. All carry risk. at the start of 2005.WiMAX Watch Critical success factors in WiMAX’ make or break year • WiMAX must gain credibility and uptake this year or risk losing out • Rapid path to testing and certified products is vital • New spectrum choices will be more important than harmonization • Intel-style laptop card will not be the only important CPE • 2005 will decide whether WiMAX is one standard or one among many It is clear that 2005 will be the make or break year for WiMAX. Yet it remains.16e with Korea’s Wi-Bro could create the first unified global standard for both fixed and mobile communica- tions. the planned harmoni- zation of 802. in order to maintain confidence and momentum and fend off the challenge from the cellular community.

It has laid out an ambitious program for the evolution of a very low cost customer premises equipment (CPE). There is also a need to identify and develop usable applications that are distinct to Wi- MAX. rather than focusing on other important applications. Realistic CPE roadmap: Intel has done more than any other company to create interest in WiMAX. it is vital that the roadmap materializes and confidence in it is re- tained. so that its operators avoid competing merely on the basis of a price war with DSL or cellular. must be rock solid. since cor- porate uptake will help lure big service providers and instil confi- dence in the technology. Companies like Motorola are working hard to coordinate efforts to rectify this. Development of software and applications: The 802.16 standards cover only the physical and MAC layers and WiMAX still looks somewhat sparse in terms of higher level functionality and added value. Enterprise applications will be particularly important. 14 Distributed in North America by TrendsMe- . aspects such as security and quality of service. and start-ups focused on such areas should do well. Since the falling cost of CPE is the most critical factor in justifying the WiMAX business model. but it has also attracted accusations that it is driving the standards too close to its own agenda – creating a mobile broad- band wireless network that will spur sales of PCs and other de- vices. But to succeed in the enterprise. Rapid certification: Vague timescales for availability of ‘real’ certified WiMAX gear are damaging confidence and making it hard for would-be adopt- ers to plan. although already strong in WiMAX. WiMAX Watch those players with their fortunes bound up in UMTS. They have to make the choice of gambling on a ven- dor’s pre-standard gear. hopefully with a firm migration plan like that offered by Wi-Lan. embeddable by 2006 in a notebook card and by 2007-8 in a mobile phone. or delaying roll-out and potentially los- ing market advantage. for instance – to sideline it by gaining sufficient traction for their own alterna- tives that WiMAX loses its killer edge. as against proprietary alternatives.

Although all the vendors with whom these large customers are accus- tomed to deal. but these are tied up by a small handful of operators – including Clearwire and Sprint.WiMAX Watch Spectrum policy: Limited spectrum options could be a brake on WiMAX’ pro- gress. the Korean technology that will be the basis of 802. Intel and Fujitsu. and profiles. that may force a difficult upgrade path later.8GHz has lim- ited range and is no use for mobility. Moves to mobility: There is huge interest in the upcoming mobile version of the WiMAX standard. few have concrete product plans. but all will depend on the policies of regulators in different territories. from Lucent to Ericsson. while Siemens and Alcatel have OEM deals with Al- Copyright Rethink Research Associates 2005 15 . Wi-Bro. and in unlicensed 5. equipment will be available for 3.16e. To avoid an anti-hype backlash of disappointment. allowing full non-line of sight and cellular-like performance. The main exception is Motorola. In 5.16e.3GHz and companies like Intel are eyeing the ‘holy grail’ of sub-2GHz spectrum. which will lead to a goldrush in parts of Europe.5GHz for the US MMDS bands. while enterprise and fixed/mobile services will require the quality of licensed bands. are now in the WiMAX Forum. the IEEE needs to ensure that the standard is ratified in timely fashion and with minimal political battling. Initially. While unlicensed bands will be attractive for early. This will enable realistic roadmaps to be set and will prevent too many vendors fragmenting and confusing the market by launching ‘pre- standard’ proprietary solutions for mobile operations. 802.8GHz. but also a lot of hype and false ex- pectation. low risk experiments in deploying WiMAX. which look likely to create a duopoly in national broadband wireless networks that could be leased to other players.8GHz WiMAX will compete with Wi-Fi hotzones and this could turn into a price war. Availability of spectrum.5GHz. Moves by major vendors: There is no doubt of the commitment of the major chip vendors. The next profile will be in 2. was de- vised for 2. 5. for other bands will be critical to WiMAX’ mobility objectives. but for large operators to come on board – es- sential to establish WiMAX as a global contender – the major equipment suppliers must also have clear strategies.

Already. and Sprint likely to join soon.16. But clearer signals from other large players would be a major boost. and a major split over the mobile version was averted by the agreement by Intel and LG to integrate 802. Just the promise of WiMAX has been disruptive already. with big names like AT&T setting out ambitious WiMAX plans. and if the regulators take a sensible approach. by IEEE stan- dards.16-2004 specification was created with remarkably little delay and political upheaval. The WiMAX Forum has had some success in its goal of attract- ing operators to its ranks. Many milestones have al- ready been crossed – the 802. the specter of WiMAX is prompting the cellular sector to upgrade its technologies more rapidly than originally expected. volume and quality demands.16 and Wi-Bro. and to look towards future migration to OFDM platforms such as 802. 16 Distributed in North America by TrendsMe- . though it has been less effective in influencing regulators (perhaps focus- ing too much on trying to achieve global harmonization of spec- trum policy. however. WiMAX Watch varion and Navini. the technology needs to be tried and tested in a short timeframe. rather than on getting new bands opened up for Wi- MAX). All these criteria are capable of being met this year if the commu- nity remains focused. giving operators the confidence that they can buy from their usual manufacturers and that there will be a choice of suppliers capable of meeting their service. or it risks disap- pointing expectations before it is even launched in earnest. confident and reasonably united. For it to fulfil that disruptive potential.

Its business model is to build services expertise in internet ac- cess. either directly or leased to a lar- Copyright Rethink Research Associates 2005 17 . provide an ongoing revenue stream and generate cash to fund further development of the chips. founded as a designer of chips for the ZigBee short range wireless standard.WiMAX Watch MobilePro seeks to cash in on cableco interest in wireless MobilePro funds chip development through network of operators Basing future on WiMAX. which are still in the development phase. but it re- ceived a 100m capital investment from Cornell Capital Partners last May to buy up ISPs and small telcos. As well as its conventional wireless internet operation. which will offset high R&D costs. VoIP and other areas based on WiMAX and Wi-Fi. which holds CLEC licenses in 10 states and puts it in a po- sition to offer bundled services. The company. has been financing that project – and creating a viable business in its own right – by buying up broadband wireless operators in the US. In following this strategy. and then to partner with more capital-rich companies such as cable- cos. Now it hopes to attract cable partners to take this business to a new level. looking to expand into the wireless arena. it is building a far reaching network in underserved US markets. it has a voice divi- sion. MobilePro has yet to generate any revenue from its ZigBee chips and antennas. Wi-Fi and VoIP Has CLEC licenses in 10 states as well as ISP business Points to new combined business model as demonstrated by Clearwire With the cable industry increasingly interested in broadband wireless as a way to enter the ‘quadruple play’. MobilePro is one start-up looking to cash in. based on Wi-Fi and WiMAX. It is now explor- ing alliances with at least one cable operator for VoIP.

and the names include Shre- venet. ” "In December 2003. Michigan CLEC Affinity Telecom and Houston ISP Crescent Communications. An interesting acquisition was of Davel. On the CLEC side. and in other areas where “ it has resell arrangements.000 payphone make sense for us points by the end of this year. MobilePro announced its first ever revenues in March 2004. though some have been larger. As cablecos and other service providers look towards bundled packages of offerings from video to mobile telephony. such companies will be in an increasingly strong position.000. MobilePro has bought 10 ISPs in seven states with a total of 70. of around $310. while the ISP di- vision is running at about $525. MobilePro aims to ex- made this year start to pand out of its current residential base into small businesses.15] chip and other projects. with $50m a year in revenue and 25. seeing its stock price rise eightfold in the past year and its market cap 16fold.000 internet customers over the past six months. MobilePro is licensed in 10 states with 110. Louisiana. long distance. 18 Distributed in North America by TrendsMe- .000 customers and can offer local. Fiber Network. and fit together. following its first acquisitions. a Kansas City long distance provider with customers in 40 states. It aims to create public access hotspots in 2. MobilePro in Shreveport. as the larger example of Clearwire illustrates (see separate item). It has also signed purchase deals with Dallas-based CLEC CommSouth. an Ohio ISP. You can to use the payphones as Wi-Fi or WiMAX access points for also infer what addi. to the extent they remain profitable.000 payphones in 42 states. it closed acquisitions of Clover Computing. building hotzones and municipal networks in unlicensed spec- tional acquisitions may trum. such as the $25m Close Call. mainly in retail and The 14 acquisitions we commercial locations. Davel is expected to gen- erate $1m per month in EBITDA by this April. "These acquisitions are intended to provide revenue to us and. we decided to pursue a strategy of acquiring profitable broadband telecommunications service providers." stated an addendum to MobilePro’s 10K filing with the SEC last summer. WiMAX Watch ger brand." The strategy is starting to bear fruit. Now it has moved to a $100m revenue run rate with positive cashflow. and US1. Last July alone. Web One and T1 Connect. Most have had revenues of around $2m a year. Its first municipal hotzone deal is Jay Wright. With this network. Verizon Wireless and Covad DSL services here. provide cash to fund development of the ZigBee [802.000 per quarter in revenue.

” The goal is to have $500m in revenue by the start of 2007. called Neoreach.” he wrote. Affinity brings us the Red Cross and Special Olympics brands. CloseCall America pro- vides a brand. while pushing ahead with the chip business. Copyright Rethink Research Associates 2005 19 .WiMAX Watch In a letter to shareholders in December. The ISPs bring us local pres- ence. “The 14 acquisitions we made this year start to fit together. a billing and customer support platform. CEO Jay Wright said that the key for 2005 will be integrating the various acquisitions. with 1m customers and over $80m in EBITDA.000+ access points for a potential nationwide wireless network. You can also infer what additional acquisitions may make sense for us. management talent and a large customer base. and a su- perior manager in Tom Mazerski. “Davel provides cashflow and 40. cashflow.

Airspan is also working to support mobile voice in compliance with the as- yet unfinalized 802. It has a clear 20 Distributed in North America by TrendsMe- . WiMAX Watch News Highlights: Airspan acquires VoIP specialist WiMAX was originally conceived as a data-oriented technology but.16e standard. approval of ArelNet's shareholders and the District Court of Tel Aviv. Airspan. New members such as NextWeb will help change this. whose product range also spans non-WiMAX bands such as 700MHz. Completion of the ArelNet transaction is subject to Airspan's completion of due diligence. and Airspan will pay $4m in cash plus $4.16 that will promise the same qual- ity of service levels as traditional telecoms networks. making soft switches. the largest fixed wireless ISP in California. signing names such as AT&T and BT. gate- ways and other products supporting all major VoIP standards. there is rising interest in its potential to carry voice over IP.7m in stock. is still often perceived as being driven by the agenda of vendors. The ISP has been highly active in launching broadband wireless services in California and in campaigning for measures to avoid interfer- ence and overcrowding in unlicensed 5GHz bands. NextWeb joins WiMAX Forum NextWeb. ArelNet specializes in VoIP infrastructure. Airspan will use this technology to enhance the voice aspects of its WiMAX-ready products and to develop new carrier class voice solutions based on 802. and regulatory approvals. as highlighted by Airspan’s announcement that it will ac- quire VoIP specialist ArelNet of Israel. as in the Wi-Fi world. The Forum. ArelNet is a provider of voice-oriented broadband wireless gear. The WiMAX equipment makers are rac- ing to expand their voice capabilities to address this nascent mar- ket. made its most recent sale last month to Neda Telecommunications of Afghanistan. which has set a target for 2005 of expanding its membership among operators. which put signifi- cant effort into attracting service providers last year. has joined the WiMAX Forum.

Its service is available in 175 towns and is posi- tioned as a low cost alternative to T1 or bigger leased lines.000 customers among medium-sized businesses throughout California and uses proprietary OFDM- based networks. NextWeb uses equipment from Axxcelera. It has made a string of acquisitions of ISPs. or upgrades to existing ones. Scalability is key to fixed wireless advantages. higher performance and greater functionality of fixed wireless broadband technology.” NextWeb recently signed a VoIP partnership with Level 3 Com- munications and will launch a voice service for its customers in the middle of this year. Camarillo.WiMAX Watch roadmap for basing new networks. and applaud the efforts of its members to further interoperability. Copyright Rethink Research Associates 2005 21 . with roof-mounted base stations covering a three mile radius. and will migrate these to WiMAX. By focusing on business rather than residential. In November it announced that it was upgrad- ing its backbone using microwave radio systems from Alcatel. with four in the past two years . and on SME in order to avoid the long sales cycles of the top enterprises. California. from another wealthy Californian area. by- passing the wireline network charges and also competing on the basis of rapid set-up compared to wired links – less than one week from order – and high speed.Innetix of San Jose. as that will only help our industry grow. We also appreciate the efforts the WiMAX Forum has made to increase awareness for this technology. on WiMAX equipment in future. NextWeb has 2. supporting 250 sub- scriber units each with user rates of 25Mbps. NextWeb now boasts ARPU of $470 per month and achieved positive cashflow a few months ahead of schedule. and systems can be scaled up to match six T1s without spe- cial equipment. to cope with expanding demand. NextWeb claims its users typically get 30% higher performance than a T1 at 70% of the price. CEO Graham Barnes commented: "We have been using a tech- nology platform for many years that is similar to what the Wi- MAX Forum is working to standardize. Currently. says the company. Oakland-based Libritas and finally SkyPipeline. which claims it can double the number of customers on its network for only 10% of variable costs. World Wide Wireless Networks of Orange County.

since DSL is so price competitive. In 2004.” "The FCC ruling casts uncertainty over the CLEC industry for months and perhaps years to come. the company was named one of the 50 fastest growing Bay Area companies. This is good news for ILECs and good news for all true competitors. wireless providers like Towerstream. commented: “Fixed broadband wireless access solutions are a true form of competi- tion for the last mile.” 22 Distributed in North America by TrendsMe- . will now see their cost base rise. WiMAX Watch NextWeb also offers a sub-1Mbps. Cedar Grove Investments. like other providers. which could previously access the network at low rates. Phil Solis. which operates business-oriented services based on pre-WiMAX gear in major cities such as New York." TowerStream. grow into wanting the full platform – and will step up this focus when Wi- MAX subscriber equipment falls to commodity prices. making wireless even more attractive in terms of rates. in future. But it offers the option for companies that may. WiMAX operators to gain from FCC ruling Broadband wireless operators have welcomed the FCC’s Decem- ber ruling that incumbent local exchange carriers (ILECs) in the US no longer have to open up their networks at subsidized prices. This is not its key focus and. SLA-less offering for small businesses. which sell their services on the basis of undercutting the wireline vendors. Saints Capital. and Sunsino VentureGroup. It is profitable and is backed by strategic investors including Asset Management Partners. the RBOCs. and have now reached the point where ILECs will have no con- straints to raise their T1 prices in dense urban areas. While the major impact of this change in policy has been to spur the largest local carriers. Competitive local exchange carriers (CLECs). to step up their fiber net- work plans. "Subsidies have been steadily declining. Sage Venture Partners. be- lieve they will benefit too. it says it is hard to make a business model based on such services in the developed areas. and this will hurt their business. an analyst with ABI Research." said Jeff Thompson. Monet Capital. The FCC's ruling will force CLECs to raise their prices. Kaiser Permanente. the op- erator’s president. com- mented: “The only way to avoid the impending rise in prices is to bypass the ILEC's wires altogether.

Rodopi and Navini plan to work with operators to leverage their combined technologies. Rodopi's solution is a web-based application that allows online provisioning and network management. The Rodopi-Navini solu- tion enables automated online billing and customer care opera- tions. especially operations support systems (OSS) of the caliber operators expect in the cellular world. Copyright Rethink Research Associates 2005 23 . offering an automated platform for ser- vice providers. combining this with its Ripwave Ele- ment Management System.WiMAX Watch Navini adds OSS partner One of the possible obstacles in WiMAX’ way is a shortage of supporting software. aimed at small and medium WISPs. Pre-WiMAX vendor Navini is addressing this through a partnership with OSS specialist Rodopi Software.

Research Director and lead report analyst: caroline@rethinkresearch. analyst query and industry events focused on WiMAX. 24 Distributed in North America by TrendsMe- . please contact us at the addresses below: Published in the US by Trendsmedia. Caroline Gabriel. It also offers the opportunity for customized queries and research on behalf of subscrib- ers. 82 West Main Street Suite 2 Northboro. Inc. MA 01532 (508) 351 6553 x 101 Fax (309) 410 1286 Email info@trendsmedia. monthly in-depth research papers. This provides in-depth market sizing and breakdown and a regularly updated analysis of business models and projected ROI as markets evolve rapidly. or to enquire about site pricing or our other WiMAX Watch is part of Rethink Research’s full WiMAX service for operators and service Editorial is provided by Rethink Research Associates Research director and lead wireless analyst: Caroline Gabriel caroline@rethinkresearch. WiMAX Watch To order further copies of WiMAX Watch. cellular or fixed wireless Tel: +44 (0)207 403 3292 European sales director: Kit Maharajh Tel: +61 (0)2 9482 4926 Trendsmedia provides a complete mobile and wireless advisory service con- sisting of weekly newsletters.