40 | June 2008 | www.wimax-vision.com/subscribe
There will be performance issues with HSPA dongles over the next
12 months as some of the cells get more congested
Brendan O’Rourke, Freedom4
Freedom4’s WiMAX positioning to date is one of its addressable market to generate a profi t. “We 2.6GHz spectrum auction (2.5Hhz to 2.69GHz),
of wholesaler, off ering ‘aff ordable’ symmetrical data think an 4-5 percent market share of the segment is which is expected to start in September 2008.
products for the SME market. reasonable target,” says Williamson. “It maybe niche Funding issues are clearly important considera-
Using 802.16d kit from Airspan, which operates but it can be a rich niche with the right business tions (spectrum costs and network capex), but
across Freedom4’s 84MHz slice of spectrum in the model, which we have created and are proving.” so is market positioning. “How important is true
3-6GHz-3-8GHz frequency band, the Intel-backed One of Williamson’s fi nancial targets is a cus- mobility to making the [WiMAX] business work?”
operator started commercial WiMAX in Manches- tomer payback time of between 5-6 months, but asks Intel Capital’s Patel. “We don’t yet have a clear
ter and two towns (Milton Keynes and Warwick) in the payback period is currently averaging out at answer to that.”
early 2008. 18 months. Th e lower costs that come from higher Both UK Broadband and Freedom4 say that,
“We don’t need a high subscriber take-up to volumes should make the 5-6 month target achiev- for urban environments, there are no signifi cant
make the business work,” says Brendan O’Rourke, able, says Williamson. signal propagation benefi ts at 2.6GHz compared
COO at Freedom4. “Typically, at the retail level, Urban WiMAX has a ROI on every base station with 3.5GHz. Th at being the case, there would be
we need 85 end-users to one base station to start within 10 months. “We have to do that otherwise no need for them to bid for 2.6GHz spectrum to
breaking even at an operational level.” In Man- we wouldn’t be able to effi ciently execute the busi- deliver nationwide mobile voice and data services
chester, Freedom4 has 6 base stations in opera- ness model,” says Williamson. “We have said that it (over 802.16e) if they decide their focus should re-
tion, which it will increase to 9 by this summer. would take around 2 years from billing services to main on delivering fi xed and nomadic data services
Freedom4 offers what O’Rourke says is “high net profi t and we look set to achieve that target [in in towns and cities.
quality symmetrical broadband” (1Mbps, 2Mbps, Spring 2009].” Urban WiMAX, as part of the Mobile WiMAX
4Mbps) for small businesses (5-50 employees). Acceleration Group (M-WAG), a collaboration
The company has yet to fully work out its prod- Mobile WiMAX nationwide? of companies (including Nortel and Alvarion)
uct pricing model but O’Rourke feels there is Ahead of the UK’s 2.6GHz spectrum auction, UK exploring the mobile WiMAX business case, has
plenty of scope to undercut current symmetrical Broadband, which is fully owned by Hong Kong also been evaluating the performance of 802.16e
DSL (SDSL) prices—around £200 per month for incumbent PCCW, is best placed to off er mobile at 2.5GHz through trials conducted in Maidstone,
a 2Mbps product—and still make attractive mar- WiMAX. Kent. Williamson is cautious, however, on the
gins due to the “low-cost structure of WiMAX In November 2007, Ofcom extended the condi- business case merits for true mobility services
technology”. tions of its 3.5GHz licence (40MHz) to allow UK based on 802.16e.
With WiMAX coverage currently extending to Broadband to off er nomadic and mobile services. “We’re beginning to become satisfi ed with the
50,000 premises, Freedom4 aims to increase that Although UK Broadband is trialling the technology technical performance but that doesn’t necessarily
number to 500,000 premises by the end of 2008; it has yet to give any fi rm commitment on when it mean that a new entrant will be successful [with
this could include rollout in other major UK cities, will commercially launch a mobile WiMAX service. 802.16e],” he says. “You need a disruptive marketing
says O’Rourke. In the meantime, UK Broadband continues to position. Th is could be off ering voice for free and
“Our market share target [for UK SMEs] is 5 provide fi xed wireless broadband using equipment having a superior broadband connection, but it’s
percent,” adds O’Rourke, “which we feel is very from IPWireless (UMTS in TDD mode) and UT too early to say. We need to understand more what
achievable.” Starcom (proprietary). people will buy.”
Privately-held Urban WiMAX, which oper- Th e PCCW subsidiary does not disclose Th ere has been speculation that the UK’s mobile
ates a 802.16e mobile WiMAX network (25 base subscriber numbers but markets its service as ‘no network operators will bid for 2.6GHz spectrum
stations) in London in the unlicensed bands phone line broadband’, which the company says is with a view to hoarding it and so block out poten-
of 5.4GHz and 5.8GHz, has a similar market especially suited to those who do not have access to tial competitors. “Th is would be the worst-case
positioning: exploit a gap in the SME market for a fi xed line telephone but yet still want broadband. auction scenario for WiMAX supporters,” says
aff ordable symmetrical data services. Off ering Freedom4, which is awaiting clearance from Ovum’s Grivolas.
symmetrical products that range from 2Mps to Ofcom to off er nomadic and mobile services, is un- Perhaps the best-case scenario would be for
10Mbps (in 2Mbps increments) Urban WiMAX is dertaking 802.16e trials using Airspan equipment. deep-pocketed BT to secure 2.6GHz spectrum
luring its ‘sweet spot’ business customer (between “All the 802.16d equipment we have from Airspan and use WiMAX to regain entry into the nation-
10 and 250 employees) with a combination of is soft ware-upgradeable to 802.16e,” says O’Rourke. wide UK mobile market. The UK incumbent,
high speeds, quick install time, as well as lower “We are also trialling USB WiMAX-enabled don- however, remains tight-lipped about its WiMAX
prices and better customer service. “We typically gles from Airspan.” intentions. ®
charge our customers 30 percent less than other Th e popularity of HSPA dongles in the UK
symmetrical data products,” says Sasha William- has, for O’Rourke, validated there is a market for UK country statistics, 2007
son, CEO and founder of Urban WiMAX. “Our nomadic broadband services, which enhances the
installation times are also much shorter. We take WiMAX opportunity. “We can compete with HSPA
GDP ($bn) 2,006.6
ten days but our competition can take between 90 by off ering a better broadband experience,” he says.
Population (million) 58.6
and 120 days.” “My feeling is there will be performance issues with
Households (million) 27.1
Williamson says Urban WiMAX has several HSPA dongles over the next 12 months as some of
PC penetration of households 85.9%
hundred customers and has an addressable market the cells get more congested.”
in London of around 100,000. And like Freedom4, UK Broadband and Freedom4 do not say Source: Informa Telecoms & Media
Urban WiMAX claims it doesn’t need a large share whether or not they will get involved in the UK’s
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