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High-speed wireless infrastructure.
Cellular infrastructure for converged networks.
Last-mile solution for broadband wireless access.
CAPEX of ~$3.7 billion needed to penetrate 97.2 % of USA homes (InStat/MDR).
DSL/ADSL technologies widely deployed.
Cellular penetration is very high and growing.
Possible wide deployment of 3G.
Widespread success of 802.20 standards.
There are many risks and uncertainties which confront new telecommunications technology development and its adoption. Not all telecommunications risks are recognized and addressed; however, the major risks and uncertainties are considered. The risks are categorized into four different sections: technological uncertainties, demand uncertainties, operational uncertainties and legal and regulatory uncertainties.
The digital divide is one of the key risk factors. It is important for operators to consider the risks of furthering the digital divide, as it represents potential high-level changes to the regulatory structures and perhaps service obligations which may not be economically attractive. Convergence is the second technology-related risk. Convergence is a
ECONOMICS OF WiMAX
supply-driven phenomenon; this change is the outcome of technological innovation. However, if the market is economically restricted, the potential for some features of convergence to be widespread must be examined.
Demand uncertainties involve the risks and doubts concerning customer reaction to a product or service and its acceptance. As demand is vital for success of any new technology, this form of uncertainty is also a key risk factor.
Most risks associated with new or improved products originate from technological and/or market uncertainties. There is never certainty about the consumers reaction to launching a new product, whether it is a radical or an incremental innovation. Technology-driven markets are more uncertain than purely demand-driven markets, since radical innovations are often based upon presumed or extrapolated needs, as opposed to existing, identified needs in demand-driven markets where the improvements are often incremental. Even where a great need for technology exists, the quality and dynamics of this demand are difficult to predict.
Legal and regulatory uncertainties
The success of attracting and keeping telecoms operators and service providers relies mainly on the stability and viability of the regulator. Should this environment be subject to political interference or mismanagement, the development and progress required of the ICT sector are unlikely to materialize. Licence obligations, while perhaps necessary to fulfil certain obligations made by government to the people, cannot be overly severe or inflexible.
Experience has shown that a flexible service obligation allows operators to fulfil obligations, achieve some profitability in rural areas and stimulate indirect benefits such as job creation and development of local industries. However, where licence obligations are subject to repeated change and the regulator is not independent or endowed with sufficient authority, the environment is likely to suffer. A second worry is corruption in the legal and regulatory authority.
Telecommunications disputes that require legal arbitration and judgement have the potential to severely impact the perception of the sector by investors, operators and businesses. This can significantly hamper growth.
Political, Economic, Social, Technical (PEST) Analysis
PEST analysis is important so that an organization can consider its environment before starting any new initiative. In fact, environmental analysis should be continuous and influence all aspects of planning. The organizations marketing environment is made up of:
the internal environment, for example staff (or internal customers), office technology, wages and finance;
the microenvironment, for example external customers, agents and distributors, suppliers, competitors;
the macroenvironment, for example political (and legal), economic, socio-cultural and technological forces. These are known as PEST factors.
Interconnection to other networks.
Network operations centre (status, failure alarms).
Network maintenance (equipment repair, interference resolution, hackers, viruses).
Customer support (access to the network, blacklisting users, help desk).
ECONOMICS OF WiMAX
Demography - urban, suburban, rural.
Development - underdeveloped or developed.
Radio Standards: Wi-Fi a/b/g, WiMAX, 4.9 GHz, etc.
Interference issues: these bands are not protected.