The New Nation - Internet Edition

A new report from Arthur D. Little - 'HSPA and mobile WiMAX for mobile broadband' - examines the roles of HSPA and WiMAX and brings clarity to decision makers. The following is an overview of the report's key findings, operators, regulators and vendors are developing their plans for mobile broadband access based on an incomplete picture of the technology choices available. In particular, the relative advantages and disadvantages of choosing HSPA vs. mobile wiMAx remain unresolved. To help decision makers, Arthur D. Little conducted a qualitative research project amongst 31 HSPA and wiMAx equipment vendors, operators running the networks, government regulators and financial investors around the world.

The findings can be summarized as follows:

HSPA will account for the majority of mobile broadband networks worldwide over the next five years;

Mobile wiMAx is a competitive technology for selection by operators over this period in only a limited number of circumstances where conditions are favourable; There are 94 commercial HSDPA networks in operation today, while the first commercial mobile wiMAx networks are expected to enter service towards the end of 200712; In the long-term, mobile broadband wireless systems will be characterized by technologies such as FDMA and MIM, whose development is being actively pursued throughout the industry while future mobile wiMAx systems could potentially achieve data transfer rates of 16.8 Mbps in urban areas, mobile wiMAx cells will tend to be significantly smaller than HSPA cells, at only half to a quarter the cell radius of the equivalent HSPA cell. HSPA bandwidth falls away slowly, which allows for larger cells. Typically, the radius of HSPA cells is 2-4 times larger than wiMAx, which means the cells range across an area 4-16 times greater; this gives HSPA a significant mobility advantage.

Initial indications are that capex for current wiMAx technology can be up to 5- 10 times HSDPA capex on a like-forlike basis.

A powerful momentum behind HSPA over the next five years many factors will lead operators to deploy more HSDPA networks than wiMAx. Since 2005 more operators have either deployed or plan to deploy HSDPA ahead of wiMAx. HSDPA has gained a significant time-to-market advantage. with a large HSDPA base established, economies of scale have come into force, particularly on handsets and other user devices.

A growing network of global suppliers of components, subsystems, equipment and network design and implementation services now support the HSDPA base.

HSDPA (and upgrades) form a natural migration path for the many GSM and uMTS operators who already operate commercial networks in 3G spectrum. For most operators HSDPA offers the least risky route to offering mobile broadband services, with speeds comparable with first generation DSL access services.

Today's powerful Internet-based interests (Google, yahoo! and MSN) create demand for mobile broadband access, with operators coming under pressure to deploy available infrastructure and handsets capable of achieving similar speeds to those users experience with broadband at home wiMAx lags behind HSPA but has supporters over the past year wiMAx has made significant progress in building a comprehensive "ecosystem" of supply, albeit one which has not yet established the depth and breadth of the HSDPA equivalent.

A major factor which operators considering mobile wiMAx will have to take into account is the cost of wiMAx user terminals in certain markets. because of low wiMAx volumes and the limited choice of devices, the prices of wiMAx handsets will remain significantly higher than those of other, much higher volume, cellular terminals, which are being developed and offered in increasingly lower cost versions.

In fact, wiMAx is in the difficult position of having to prove its business case in advance of proven performance.

This is due to two key factors:

Attractively priced notebooks and PDAs with wiMAx-embedded capability, coupled with acceptable power consumption, will not appear in quantity until 2008, with handsets arriving in 2009 or later wiMAx lacks the economies of scale that benefits HSPA.

In addition, operators will have to note the cost of wiMAx handsets in price-conscious, emerging or developing economies where no significant voice revenue exists for them. That said, a small number of operators will choose wiMAx in certain situations where:

The operator does not have access to 3G spectrum but does have spectrum at other frequencies such as 3.5, 2.3 GHz The fixed operator wishes to deploy broadband to areas where wired alternatives, such as DSL, are neither available nor economic to deploy.

The operator wishes to enlarge their 'hotspot' broadband In this last example, the capex costs deter the operator from offering national or wide area coverage.