The High-Speed Race for Broadband Billions

Look no further than the evolution of the cellular market to see what's going to take place in the world of wireless broadband.

The combination of technology innovation and new business models have had a profound impact on low-ARPU markets around the world. 

A number of things came together to make mobile phones more accessible to poorer people and trigger  rapid growth.The spread of mobile phones in the developed world, together with the emergence of two main technology standards, led to economies of scale with respect to network equipment and handsets. Meanwhile lower prices brought mobile phones to rich people - allowing the first mobile networks to be constructed in developing countries. Add to this the introduction of prepaid billing plans and we're off and running.  

The biggest need for a more cost-effective wireless broadband approach is in developing economies such as India, Southeast Asia, Eastern Europe and Latin America where fixed lines are sparse and broadband penetration is low. WiMAX, widely-considered the panacea to this problem, is considered too expensive, time-consuming and complex to use (there are only SO many Clearwire's in this world). Gartner says that the majority (54%) of the growth in worldwide broadband connections between now and 2012 will come from the emerging markets. We agree. These charts help illustrate the point (click to see larger view):

The same thing is happening in the broadband world. Better, lower cost Wi-Fi technology combined with new models for building broadband access networks are being combined to completely change the market. And no, this is not Metro 2.0 or the death of WiMAX.

Carriers Now Like Wi-Fi (hey Mikey)!

For the longest time, Wi-Fi has been poo-poo'd by telecom carriers because it:

• Uses unlicensed spectrum
• Lacks the range and coverage
• Delivers mediocre reliability
• Provides in consistent performance

What's more, there's been no unified or complete end-to-end Wi-Fi system solution (i.e. CPE, access, backhaul and management) to build a complete infrastructure needed to deliver a reliable carrier service.

So broadband operators have been forced to become their own systems integrators, cobbling together an assortment of disparate vendor products and then trying to managed it all as a cohesive infrastructure.  Forget it.

This has left operators with WiMAX. While an excellent backhaul technology, WiMAX requires spectrum licenses, special (and expensive) CPE (customer premise equipment) to support Wi-Fi devices, pricey, pricey cell towers, complex network design and massive amounts of resources and capital (typically associated with the likes of WiMAX) to build one of these networks BEFORE even one customer can be signed up (this chart pretty much tells the story).The good news is that ALL this changing - and changing fast.

With the introduction of dual-band 802.11n chipsets, MIMO technology, smarter meshing approaches and new technical breakthroughs that address interference avoidance and dynamic signal path selection, Wi-Fi is getting a second chance.

Add to all this a more pragmatic business model that lets broadband operators "build as they grow" (instead of the old metro "build it and they might subscribe" blanket approaches) by adding Wi-Fi capacity in high density areas, quickly and inexpensively as needed - and carriers are becoming Wi-Fi missionaries.

Because of these reasons and others, Wi-Fi is now viewed as one of the most viable and economical technologies to deliver reliable broadband access. It's estimated that outfitting one-square kilometer with Wi-Fi delivers more capacity, can be deployed in a fraction of the time and is one-fifth the CAPEX of doing the same thing with WiMAX (not even considering spectrum licensing). Look at this business model comparison (Download WBA_Business_Case_rd1).

So what's this next gen Wi-Fi broadband access network look like?

Tikona     (in India) and WiNet Broadband (in Malaysia) are just two compelling examples of how Wi-Fi is successfully being used to  deliver reliable wireless broadband access throughout their respective countries.

 Ultimately the emergence of such networks and low cost computing devices are poised to offer the benefits of full Internet/broadband access to people in the developing world in the coming years with the promise of narrowing the digital divide between emerging and mature markets.

Wi-Fi, once a "luxury item" is becoming a tool for global development.