Friend or foe?

Sections of the broadcast industry remain divided over whether the development of WiMAX wireless broadband networks will prove a blessing or a curse in the rush towards establishing mobile content delivery services. John Parnell investigates.
The WiMAX Forum included presentation from Milan Sallaba, partner at consultant Oliver Wyman.
The WiMAX Forum included presentation from Milan Sallaba, partner at consultant Oliver Wyman.
The WiMAX Forum included presentation from Chris Weasler, VP of global development at Sprint Nextel.
The WiMAX Forum included presentation from Chris Weasler, VP of global development at Sprint Nextel.
WiMax technology could prove a boon for the delivery of mobile content.
WiMax technology could prove a boon for the delivery of mobile content.

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Sections of the broadcast industry remain divided over whether the development of WiMAX wireless broadband networks will prove a blessing or a curse in the rush towards establishing mobile content delivery services. John Parnell investigates.

While the development of next-generation WiMAX network services remains a primary concern of the telecommunications industry, the significant costs associated with any implementation of the technology is forcing telcos to explore new potential revenue streams in order to safeguard a return on their substantial initial investments.

One potentially lucrative application of wireless broadband technology is the development of commercial mobile TV services delivered over WiMAX networks.

Some telcos argue that extensive WiMAX deployment could provide an alternative to establishing dedicated DVB-H infrastructure and offer the broadcast industry a new option in its pursuit of widespread mobile TV.

In the Middle East, DVB-H trials have successfully been conducted in the UAE, but the potential spread of WiMAX services may deter further investment. This would ultimately push back any theoretical timetable for a commercial launch of mobile TV services in the emirates.

However, some pundits argue that WiMAX boasts some inherent commercial advantages when compared to DVB-H.

A DVB-H-enabled handset would only be able to receive video content from those channels broadcasting via that particular standard. However, a WiMAX device with full broadband access, would be capable of receiving WiMAX broadcast services plus all the rival internet video offerings such as YouTube and the free streaming services many TV networks, including HBO and the BBC, already offer.

However, this is not just a problem for DVB-H based services - such offerings would also potentially cannibalise the market for WiMAX TV services.

How many WiMAX data subscribers would pay additional subscription charges or tolerate intrusive commercials for a WiMAX TV service, when they could find an illegal unlicensed version of the same show on the web using the same device?

Mobile broadband is in itself a rival to mobile TV regardless of the delivery platform.

Both WiMAX TV and DVB-H services would have to compete with online services that mobile broadband would make available anywhere, on any WiMAX-enabled notebook computer, PDA or mobile handset.

With so many territories in the Middle East having very little wired infrastructure in place, WiMAX is seen as a viable alternative means for delivering broadband internet services.

Network operators in Jordan, Saudi Arabia and Tunisia have already dabbled with small-scale deployments, while some of those servicing the Gulf States have revealed that WiMAX remains integral to their long-term plans.

The recent WiMAX MEGNA conference staged in Dubai saw over 150 attendees debate the viability of WiMAX, with international players such as Sprint Nextel and Nortel discussing the progress of their own roll-outs in key markets worldwide.

The event, endorsed by the WiMAX Forum, featured more than 20 keynote speakers from the region and abroad.

Nine operator case studies and multiple panel sessions dominated the conference agenda.

The high turnout among local operators suggested that the progress of WiMAX in the Middle East may be greater than many outside the telecom industry are aware.

"It's the first time the event has attracted such a large attendance including operators from within the region and also international operators like Sprint Nextel," explained Faissal Damaj, wireless business development director, Nortel.

"Clearly, WiMAX is high on the agenda in the Middle East."

Sprint Nextel's XoHM service came under particular scrutiny during the conference, with Milan Sallaba, partner at consultant Oliver Wyman, telling attendees that if Sprint cannot successfully deploy WiMAX, it would be difficult for others to do so.

Working through the various business models for WiMAX deployments internationally, Sallaba highlighted the potential for revenue generated by mobile TV services to offset the cost of developing network infrastructure.

Chris Weasler vice president of global development at US telco Sprint Nextel, remained optimistic in his assessment of the technology's commercial potential.

"WiMAX will hopefully lead to a classic win-win scenario," he said.

"Carrier service providers will benefit from an IP-based architecture and technology that drives a cost-performance advantage not provided by 3G networks."

"There are new revenue streams and models, and there's a time to market advantage. We anticipate the economies of scale from deployments will help lower costs and boost mass market adoption."

"Customers will benefit too as they gain access to new types of devices with expanded capabilities and applications," he added.

The nature of the Middle East consumer market, which is well-known for its high percentage of early adopters, ensure the region remains ripe for successful WiMAX deployments.

The provision of mobile broadband services should in theory drive sales of WiMAX-enabled handsets and create a ready made audience for video content delivery services. This audience would be a particularly valuable one. With WiMAX offering the ability to unicast (as well as broadcast), mobile TV channels could offer advertisers targeted access to an affluent consumer base.

However, with mobile TV services yet to bear substantial fruit in established markets worldwide, any commercial deployment in the Middle East would not be without substantial risk.

According to a 2006 report published by Ipsos Insight and Forrester focusing on mobile internet access in Western markets, only seven percent of mobile internet users accessed video services on a regular basis.

These figures are of course for narrowband connections. It is reasonable to assume that poor quality and slow speeds have contributed to the lack of interest in bandwidth hungry video.

The decrease in download time and the improved streaming that broadband would offer, may be enough to entice users.

This will only happen however if they are provided with high-quality streaming services and comprehensive signal coverage.

It is unlikely that the future of WiMAX will be decided by the implementation of mobile TV services alone.

The creation of widespread WiMAX networks providing broadband internet services would offer an alternative delivery platform for broadcasters.

A city-based WiMAX network with solid subscription rates represents arguably the ideal commercial environment for mobile TV services. Investment in separate DVB-H infrastructure would then be unnecessary.

The question for broadcasters and telcos alike is whether to press ahead with their DVB-H plans, or wait for the increasingly likely deployment of WiMAX and piggyback mobile TV transmissions on that platform.

Going global

Mobile technology provider NextWave Wireless and telecom services giant Alcatel-Lucent signed an agreement to develop WiMAX broadcast solutions for mobile operators worldwide.

"User demand for mobile broadcast services is rapidly increasing and we believe that the exciting new applications offered through this alliance will provide mobile operators a unique ability to deliver the key differentiating feature of 4G networks," said Allen Salmasi, CEO of NextWave Wireless.

Alcatel-Lucent will integrate NextWave's recently announced MXtv technology into their industry-leading WiMAX solutions portfolio, based on the 802.16e-2005 (Rev-e) standard.

The two companies plan to perform a series of interoperability tests with Alcatel-Lucent's commercial WiMAX infrastructure starting in the second quarter of 2008.

"4G networks can offer rich media content such as live television, movies and music on-demand, real-time video streaming and conferencing, radio, multi-player gaming and many other interactive streaming applications to mobile devices - anywhere, anytime. Given the expected advertising revenue from a wide range of live and cached rich media content delivered to mobile devices, we believe that MXtv will significantly drive network operator's ARPU and minimise churn with more sticky applications," Salmasi added.

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