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Group Forecasts Telcos Will Turn to WiMAX

Photonics.com
Aug 2004
STAMFORD, Conn., Aug. 10 -- The improving costs of worldwide interoperability for microwave access (WiMAX) deployment will spur alternative telecommunications carriers to turn to the technology as a viable business model as early as 2006, according to research by Meta Group, a provider of information technology (IT) research, advisory services and strategic consulting. Further cost reductions will accelerate WiMAX deployment through 2007, creating a third legitimate option beyond traditional copper wires and voice-over-internet protocol (VoIP) for local voice service, the company said.

According to Meta Group analysts, and as evidenced by the mass exit of long-distance carriers from consumer markets, rising access costs have reduced opportunities within local markets for nonincumbent operators. Leasing local copper lines from incumbent local exchange carriers (ILECs) has proven to be a flawed and unworkable business model for long-distance carriers.

With the departure of long-distance operators from the consumer market, the FCC projects that local voice competition will take the form of "intermodal competition," emphasizing the battle between wireless and wireline carriers, and between DSL and cable broadband operators. META Group said WiMAX will enable alternative carriers to regain a foothold in the market and offer consumers another service option.

"The economics of the 'wireless local loop' will drive alternative carriers to leverage WiMAX technology, resulting in enhanced competition in the consumer voice market," said David Willis, vice president with Meta Group's infrastructure strategies service. "Wireless economics have already proven true in mobile voice services, where the cost per line is 40 percent of the cost per equivalent wireline services. We expect these same economies to hold true in wireless data using WiMAX."

WiMAX technology is based on the IEEE 802.16 series of standards for broadband wireless. Although WiMAX does not create a new market, it enables standardization of the technology required for the volume economics that reduce costs and enable broader market growth, Meta Group said.

For more information, visit: metagroup.com



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