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There is also a wider picture, in which WiMAX becomes an enabler of a more seamless mode of communications, essentially built on Ethernet. In this, WiMAX provides blanket Ethernet coverage of an urban, suburban or rural area to make broadband ubiquitous.
New services are critical for service provider success moving forward. As voice and legacy data service revenue declines, service providers need new services to fill the revenue void. More importantly, enterprise customers are demanding new services from their service providers. If the incumbent provider does not have what customers need, they will redirect their money to a new service provider who does offer it.
Enterprises are demanding the following functionality and requirements from their service providers:
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Competitive freedom Figure 10.2 Leadership and competitive freedom matrix
higher-availability data services;
preservation of their existing data and voice services;
interworking between their existing data services and new data services;
lower price per Mbps of data transported;
LAN-like functionality in the WAN;
strong and specific SLAs for premium services (for which they are willing to pay more);
tiered options in terms of both bandwidth and SLAs so that services can be custom-tailored to their specific (and changing) network requirements;
large footprint so that all major and remote sites can be linked together without requiring a hodgepodge of different carriers and services.
Metro Ethernet is one new data service that is gaining momentum. Storage extension is another area of growing interest within the enterprise, as enterprises need to connect datacentres across distances ranging from tens of miles to thousands of miles, primarily for business continuity and disaster recovery purposes.
Fixed-line players who have been kept out of the wireless market because of regulatory fiat are likely to be excited at the prospect of getting a piece of the wireless cake (Figure 10.2).
10.4 NEW ENTRANTS
BWA solutions are becoming increasingly popular as operators discover their ease of deployment and build-out. A wireless network can be
deployed in parallel with the existing infrastructure or as a complete infrastructure for emerging operators.
Research has shown that the cost of deploying the last mile will continue to fall for wireless networks while it remains constant for copper-wire networks. Furthermore, WiMAX needs minimal access equipment to support a large number of subscribers - a single base station can support thousands of subscribers.
WiMAX provides the optimal choice for new operators seeking cost savings and rapid deployment, enabling them to competitively win customers through attractively priced services. WiMAX is especially well suited to new entrants as it provides the best opportunity to enter the data and VoIP market without dependence on incumbent providers:
it is possible to control the infrastructure;
WiMAX is cost-effective and quick to deploy;
capacity can be increased as demand grows.
New operators and wireless service providers see WiMAX as a way to break the cost barrier in the broadband market. However, wireless broadband may be more important to new rivals of the big mobile operators. Those new players could include cable operators who want to compete with telecommunications carriers by offering a suite of TV, Internet access, wireline phone and mobile voice and data.
10.5 ALTERNATIVE CARRIERS
The improved deployment costs equation will spur alternative telecommunications carriers to turn to WiMAX technology as a viable business model. Further cost reductions will accelerate WiMAX deployment in later stages, creating a legitimate option beyond traditional copper wires and wireless (mobile or cellular) for voice service. 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 ILECs has proved to be a flawed and unworkable business model for long-distance carriers. With the departure of long-distance operators from the consumer market, the local voice competition became intermodal, emphasizing the battle between wireless and wireline carriers, and to some extent between DSL and cable broadband operators. WiMAX will enable alternative carriers to
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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. Wireless economics have already been proved correct in mobile voice services, where the cost per line is 40 % of the cost of equivalent wireline services. These same economies will hold true in wireless data using WiMAX.