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WiMAX delays dampen impact in SA

2 April 2008 News

Delays in the award of licences for providing the new WiMAX high-speed wireless broadband service to businesses and consumers has resulted in dampening of its potential impact.

This is the core conclusion of the first study on the impact of the technology in South Africa, conducted by World Wide Worx. The report, 'WiMAX in SA 2008: Year Zero', shows that only those companies that have already deployed WiMAX have appreciated its impact.

These companies are all using Telkom's scaled down version of WiMAX, which is provided only where its ADSL fixed line service is not available, and only at ADSL-type speeds. WiMAX can theoretically offer speeds of up to 70 Mbps, as opposed to ADSL's fastest option in South Africa of 4 Mbps. Even at far lower speeds, however, the potential offered by WiMAX is not yet on the horizon, since no serious competition exists to spur its roll-out, says Arthur Goldstuck, MD of World Wide Worx.

"The impact of such low roll-out is that expectations for WiMAX are being kept artificially low," he adds. "The long wait for the availability of the technology resulted in both frustration and suspicion that it cannot deliver."

The study reveals that a mere 8% of corporations had adopted WiMAX options as part of their connectivity mix in 2007. However, they did not use WiMAX as a preferred or only form of connectivity, but deployed it where no other options were available, such as in rural areas or areas with rough terrain that made fixed line connectivity impossible or uneconomical.

A number of factors, such as lower cost, smaller base stations and easier deployment, mean that WiMAX is an ideal solution for providing broadband data and even telephone services to rural and remote areas. It is also seen as a powerful technology for bringing affordable yet quality Internet access to isolated communities. In addition, it is regarded as an ideal technology for connecting corporate networks at high speed, and it is already playing a small role in this regard.

Projections for 2008 indicate a significant increase in WiMAX deployment, with 20% of corporations deploying it as an element of their connectivity solutions. Once again, it is not yet a primary form of connectivity, but rather being deployed where fixed line and digital line options are not available.

The fact that only those companies deploying WiMAX had appreciated its impact and importance, said Goldstuck, pointed to the damage that regulatory delays had inflicted on the WiMAX cause. Although WiMAX trial licences had been issued to a number of operators more than a year ago, and these licences had officially expired in January this year, the trial networks were being allowed to continue operating in pilot status until full licences are awarded.

However, this means that commercial services still cannot be offered by these licence holders.

While Vodacom has announced that it will include WiMAX among its new access services, it has not yet announced pricing or performance options. Meanwhile, it is already able to sell such services through a loophole provided by its shareholding in iBurst. The wireless broadband network has a licence that technically allows it to offer WiMAX, although it is not specified in its licence.

This adds to the confusion rather than supports the WiMAX case, says Goldstuck. "Another consequence of delayed roll-out is that few corporate customers, let alone consumers, are aware of whom the appropriate suppliers will be - further limiting their ability to include WiMAX options in their budgeting and infrastructure plans."

Even when WiMAX's importance is rated as an emerging technology over the next five years, from 2008 to 2012, its significance is not recognised outside those companies that have already deployed it, according to the research.

For more information contact Arthur Goldstuck, World Wide Worx, +27 (0)11 782 7003, arthur@worldwideworx.com, www.worldwideworx.com





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