WiMAX - The new Wireless Standard

TELE 480Mike Davison11 Oct 2006

Presentation Outline:

1) Overview of WiMAX- Brief outline on what WiMAX is- How it is different to other wireless standards

2) What my researched has covered- What WiMAX is and how it can be used- Different IEEE 802.16 Standards- WiMAX versus competing technologies- Current Situation in New Zealand Telecommunications Industry- Potential for WiMAX in this industry- Study of potential Capital Expenditure in setting up a network

WiMAX - How it came about

In 1999 the IEEE 802 committee set up the 802.16 working group to develop wireless broadband standards. The charter for this group was to develop standards that:

• Use wireless links with microwave or millimeter wave radios

• Use licensed spectrum (typically)

• Are metropolitan in scale

• Use point-to-multipoint architecture

• Provide efficient transport of heterogeneous traffic supporting quality of service (QoS)

• Are capable of broadband transmissions (> 2 Mbps)

In addition an industry group, the WiMAX (Worldwide Interoperability for Microwave Access) Forum was formed in 2001 to promote the 802.16 standards and to develop interoperability specifications. If a piece of equipment has been WiMAX Forum certified it is both compliant with the 802.16 standard and interoperable with other vendors’ equipment that is also WiMAX Forum Certified.

Uses for WiMAX

WiMAX was designed as a Metropolitan Area Network (MAN) technology. This means it can provide a wireless alternative to cable and DSL for last mile broadband access. It will be able to connect Wi-Fi hotspots with each other and to other parts of the internet. WiMAX will provide fixed, nomadic, portable and eventually mobile wireless broadband connectivity without the need for direct line of sight to a base station. It is anticipated that WiMAX will allow broadband service provision of VoIP, video and internet access. Some cellular companies are evaluating WiMAX as a means of increasing bandwidth for a variety of data-intensive applications. WiMAX may also be an economic option for deployment in developing countries such as in Africa where no wired solution currently exists.

802.16 Standards

802.16 - This was the initial version of the standard that was approved in December 2001 for the 10-66 Ghz frequency range

802.16a - Was approved in January 2003, this does not require line of sight transmission and allows use of lower frequencies (2 to 11 Ghz). This standard can achieve a range of 50 km and data rates of 70 Mbps.

802.16-2004 - Was ratified in June 20004 and provides support for indoor Customer Premise Equipment (CPE).

802.16-2005 - Best known as 802.16e or Mobile WiMAX it was approved in December 2005 and its purpose is to add data mobility to the current standard, which is mainly designed for fixed operation. This standard allows data transfer on the go including while traveling in vehicles etc.

WiMAX vs Competing Technologies

With the release of 3G and the movement this has made to provide data at higher speeds WiMAX is certainly going to face some stiff competition.

Another potential threat could come from Wi-Fi as at first glance it looks like these are pretty similar technologies. In fact on many levels these will most likely be complementary technologies as Wi-Fi will cover for wireless LANs and WiMAX will be more involved with wireless MANs

Another technology WiMAX could come into competition with is cable and DSL

New Zealand currently has 1.3 million subscribers to the Internet. Although broadband has been on the uptake we stillretain very low levels of usage as compared to other OECD Countries (ranked 22/30). There are a number of reasons for this including the price which is relatively high because of the monopoly Telecom has over the infrastructure in New Zealand. Another problem users face are unpredictable speeds with some users finding they have dial-up speeds during peak times. Many experts believe if New Zealand wants to increase its productivity then it will have to look at more investment in ICT to keep up with the rest of the OECD.

Therefore the exists an opportunity for WiMAX to enter the market and potentially solve some of these problems.

Several New Zealand companies have already picked up on this and have started to investigate setting up WiMAX networks.

This includes:

CallPlus (Whangarei)

NATCOM (Auckland)

Woosh (Auckland)

BCL

Airnet (Hawkes Bay)

Smartlinx3 (Upper Hutt and Lower Hutt)

Nzwireless (Wellington)

All of these companies are looking at opportunities in the North Island so I thought why not look at how feasible it would be to set up a WiMAX network in a South Island city. I choose Christchurch as it is the largest city in the South Island as well as having a good geography for setting up a wireless network (It is predominately flat) it is also my home town.

Christchurch has a population of: 367,700

Its main urban land area is 11,600 Hectares = 116 square kilometres

How many base-stations (BTS) would be required for coverage of this area

Average base station coverage = 8 sq km

Land area to cover = 116 sq km

116/8 = 15 stations

How many base stations would be required for capacity?

Number of potential subscribers = 1% of population = 3600

Data rate per subscriber = 2Mbps

Over subscription = 20

Average data rate per subscriber = 100Kbps

Average data rate to be supported = 367Mbps

Average data rate supported per BTS = 40Mbps

367/40 = 9.175

Equipment Pricing

Year 1 Year 2 Year 3

BTS Price $200,000

Price Reduction 0% 30% 50%

BTS with price reduction

$200,000 $140,000 $100,000

CPE Price $600

Price Reduction 0% 50% 70%

CPE with price reduction

$600 $300 $180

Backhaul per BTS $10,000

Data & Network Mgmt ($/sub)

$100 $75 $50

Subscribers

Year 1 Year 2 Year 3

Number of Subscribers 3600 5000 8000

Peak Data Rate / Sub (Mbps)

2 2 3

Oversubscription 20 20 20

Average Data Rate / Sub (Kbps)

100 100 150

Revenue

Year 1 Year 2 Year 3

Revenue / Sub $50 $45 $40

Number of Subscribers 3600 5000 8000

Revenue (Incremental) $2,160,000 $2,700,000 $3,840,000

Revenue (cumulative) $2,160,000 $4,860,000 $8,700,000

Summary

Avg Data rate Supported (Mbps)

360 500 1200

Number of BTS for Coverage 15 15 15

Number of BTS for Capacity 9 13 30

Actual Required number of BTS

15 15 30

Incremental number of BTS 15 0 15

Incremental number of Subs 3600 1400 3000

BTS Total $3,000,000 $0 $1,500,000

Backhaul $150,000 $0 $150,000

Data and Network Mgmt $360,000 $375,000 $400,000

Captital Expenditure (Incremental)

$3,510,000 $375,000 $2,050,000

Captital Expenditure (Cumulative)

$3,510,000 $3,885,000

$5,935,000

Capital Expenditure Year 1 Year 2 Year 3

Revenue (Cumulative) $2,160,000 $4,860,000

$8,700,000

Captital Expenditure (Cumulative)

$3,510,000 $3,885,000

$5,935,000

Revenue - Capital Expenditue

($1,350,000) $975,000 $2,765,000

Thank you for your time!

I hope you enjoyed my presentation!