wimax has been on my radar for a while and with Intel’s investment in pipex today ($25m to create a joint venture called Pipex wireless) – wimax is suddenly in the limelight
As expected, I love this because the emergence of a technology like wimax is a positive force to the current stalemate in the mobile data industry
The article below is from theregister
Pipex WiMAX play to shake up UK market?
The UK market for broadband wireless services is set to become highly complex – and a possible proving ground for various technologies and business models – as the main holder of 3.5GHz spectrum, Pipex, shows its hand. Pipex holds the national license for 3.5GHz spectrum but, to date, has scarcely used the asset, leaving the PCCW-owned UK Broadband the only significant player in licensed broadband wireless services with its nationwide 3.4GHz holdings.
With UK Broadband slowing down its initially aggressive roll-out plans using its IPWireless kit (based on UMTS TDD technology), the UK has seemed ripe for shake-up, especially with spectrum trading soon to be permitted for the first time, and incumbent British Telecom expressing strong interest in WiMAX. It had therefore been speculated that Pipex would seek to sell on its spectrum, but now the UK’s seventh largest ISP has announced its own WiMAX trials, in partnership with Airspan.
This could indicate that, like some major US ISPs like EarthLink, Pipex will look to expand its customer base and add portable services to its bundles through wireless delivery (mobility is unlikely to be an option in the near term, since UK regulator Ofcom has so far proved hostile to allowing this in the 3GHz bands, and faces heavy lobbying from UK cellco giant Vodafone to maintain this stance). This could make the UK market less attractive for UK Broadband, which may seek to sell on its licenses, possibly – if Ofcom permits it – to BT.
This, in turn, could create a two-horse race in licensed spectrum for WiMAX-type services for business and high end residential customers, which would also be joined by some of the players using unlicensed 5GHz spectrum, such as Telebria, which has just announced new funding, and Libera. The market could be further complicated when Ofcom opens up additional broadband wireless spectrum from 2006, and especially if it decides to allow non-3G technologies into the 2.5GHz band, previously earmarked, when it is opened up next year, for 3G expansion only.
Pipex, set up in 1991, was the UK’s first commercial ISP and now mainly serves business customers with 100 points of presence (including 20 point-to-multipoint broadband wireless PoPs). As a wireless ISP, it has the advantage of readymade backhaul arrangements and established reputation for corporate class service levels. The question is whether it will stick to its business market – also targeted by Libera – with wireless or use the lower cost infrastructure to relaunch its efforts in the consumer space.
Fixed broadband wireless is in the early stages in the UK. Like most European countries, it experienced a bubble of interest when 3.5GHz licenses were awarded at the end of the last century, but few real services ensued. According to the Department of Trade and Industry, coverage is limited to only a few regions, with 45 per cent of the residential coverage in London and the South East, and 30 per cent in the Midlands. Regulator Ofcom estimates that there are 5,000 subscribers in licensed bands and a further 2,000 to unlicensed services (there are also 6,000 two-way satellite internet subscribers).
As in other countries, providers are divided between addressing underserved rural areas – as Telabria and Langreen are doing, as well as BT with its Alvarion-based pilots in remote areas of Scotland, Wales and Northern Ireland; and targeting businesses with lower cost alternative to T1 leased lines. This has been the approach of Libera, which aims to cover 75 per cent of UK businesses by the end of next year and recently launched in London.
Both business models can be served by unlicensed equipment – rural areas because there is little congestion or interference; businesses because operators can afford to set up base stations on high buildings to gain line of sight. For urban or suburban consumers, though, licensed bands will probably be essential because of the interference risks and the need for line of sight in 5GHz. Hence the increasing value of the 3.4-3.5GHz bands, whether Pipex and UK Broadband choose to keep or sell them, and the likelihood that Pipex might seek to use wireless to re-enter the residential sector.
In its 2004 annual report, Pipex indicated its reawakened interest in the 3.5Ghz-4.2GHz spectrum it acquired in 2003 along with Firstnet Services, one of the broadband wireless operators that rode the wave of the 1999-2000 boom and then failed. It points out that this band is newly interesting because of the potential of the WiMAX technology and, as part of a duty to finalize the fair value of the license in 2004, estimated this at £5m. In the provisional acquisition balance sheet of Firstnet prepared for the purposes of the 2003 financial statements this license had no carrying value attributed to it.
“In assessing the value of this asset at the acquisition date the Company has taken account of the significant progress, particularly in terms of specifying WiMAX global standards, that has been achieved in the post acquisition period and of the uncertainties present in the exploitation of new technology,” says the report. “The value now attributed to the licence at the date of acquisition is £5m and this has reduced the goodwill arising in Firstnet by the same amount. The licence value is being amortized over 20 years.”
The Airspan technical trial will last until February and will be focused on a base station at the equipment maker’s testing facility in Stratford-on-Avon in the Midlands, and a demonstration house about 1.2 kilometers away without line of sight, fitted with Airspan’s EasyST indoor WiMAX-ready modem. The equipment will work in the 3.6-3.7GHz band. The aim is to see whether a DSL-like experience can be achieved with WiMAX, and success will lead to commercial trials. Future trial phases will assess the performance of other WiMAX CPE types, including laptop cards and handheld devices for both fixed and nomadic applications.
All this reinforces the idea that Pipex is mulling a consumer service. Another motivator is voice over IP, which will also be tested in the trial. Pipex CEO Mike Read said: “WiMAX is an exciting new opportunity for Pipex and this test will help determine how we offer wireless broadband services to our customers using our licensed spectrum. Combined voice and data offerings using WiMAX will enable PIPEX to deliver differentiated products in addition to our existing services.”