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The business of wimax - Pareek D.

Pareek D. The business of wimax - Wiley publishing , 2006. - 330 p.
ISBN-10 0-470-02691
Download (direct link): thebusinessof2006.pdf
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• Quality of service: if network is shared, who and what has priority?
Total Cost of Ownership
The broadband wireless access market is expected to increase dramatically over the next 10 years as the demand for high-speed Internet access explodes. However, currently, less than 10% of Americans have broadband; overseas, the percentage is even smaller.
When enterprises first started deploying wireless LANs, the cost justification seemed straightforward enough, once prices came down to a certain level. We still paid a premium for wireless LAN hardware and software, of course, but that was offset by the wired LAN (W-LAN) cabling and installation costs we avoided. Then there were all the soft-dollar W-LAN benefits associated with the convenience of being able to move around in a facility and stay connected.
Gartner pioneered the notion of a total cost of ownership (TCO) for technology. TCO takes into account all kinds of costs besides the equipment or software vendor’s price. As Gartner has shown over and over, capital costs are often only a small part of the total. The Gartner TCO model takes into account four broad categories of cost: capital, IT operations, administrative and user operational. For TCO analysis there are direct expenses and indirect expenses to be considered. Direct expenses associated with acquiring and deploying a mobile wireless solution may include the following:
• hardware - mobile devices, PC cards, SIM cards, extra batteries;
• software - hosted applications, middleware, security;
• services - design, integration, configuration, deployment, training;
• operations - airtime fees, technical support, user help desk, consumables;
BUSINESS CONSIDERATIONS
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• maintenance - software and hardware maintenance, repair, extended warranties, spares;
• building costs for wireless infrastructure as appropriate.
Indirect expenses for sustaining operations may include the following:
• downtime - back-up, restore, failures, lost work due to nonworking conditions (no coverage, etc.);
• IT support - troubleshooting, technical help desk, testing, logistics, change management.
Other indirect expenses, or savings, that may be more difficult to quantify include productivity losses/gains, impact of a faster/slower response rate, user retention rates, ease of configuration, ease of updates (software and firmware), ease of migration and end-to-end quality of service rates. The above expenses, from an accounting standpoint, can also be categorized as the cost of equipment (CAPEX), the cost of equipment installation (OPEX) and the cost of maintenance (also OPEX).
Existing technologies - DSL, cable and fixed wireless - are plagued by expensive installations, problems with loop lengths, upstream upgrade issues, line-of-sight restrictions and poor scalability.
WiMAX answers these challenges by offering a scalable, wide-area wireless broadband access network that leverages unique smart antenna capabilities, requires zero installation at the end-user site and offers true non-line-of-sight operation, with the added benefit of portability.
Further, WiMAX provides telecommunications carriers with the lowest total cost of ownership - up to 50 % lower than DSL and cable and up to 70 % lower than fixed wireless technologies.
WiMAX is an all-IP, all packet technology with no legacy circuit telephony, which makes the operational expenses very low, thanks to the transport efficiency of IP for short bursty traffic such as data connection and single direction traffic such as voice.
The use of all-IP means that a common network core can be used, without the need to maintain both packet and circuit core networks, with all the overhead that goes with it. A further benefit of all-IP is that it places the network on the performance growth curve of general purpose processors and computing devices, often termed ‘Moore’s law’.
Computer equipment advances much faster than telecommunications equipment because general purpose hardware is not limited to
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ECONOMICS OF WiMAX
Content and commerce originator
Content and commerce provider
Retail service provider
Mobile access provider Fixed access provider
connectivity provider
Figure 8.13 ROI for different service providers
telecommunications equipment cycles, which tend to be long and cumbersome. The end result is a network that continually performs at even higher capital and operational efficiency and takes advantage of third party development from the Internet community (Figure 8.13).
Return on Investment
Return on investment (ROI) analysis has served as a key decisionmaking tool for many organizations in new technologies, including WiMAX. The ROI for this new wireless broadband technology is significantly better than for DSL and cable as well as 3G.
The maths is not difficult. First, DSL/cable means truck roll for installation, which means a lot of investment in copper, trenching and finally the CPE. These difficulties are not faced with WiMAX, and also the cost of WiMAX installation is much lower than that of DSL. Second the installation of DSL takes weeks, while that of WiMAX takes hours,
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