Voice over WiMax set to challenge existing DSL implementations, say analysts

Posted on 3 May 2005 at 12:16

Making phone calls via WiMax has the ability to rival DSL and cable-modem VoIP services for the attentions of broadband subscribers, according to market research company In-Stat.

InStat estimates that by 2009, three per cent of total broadband subscribers (which will run to around 8.5 million subscribers worldwide) will be using WiMax-based broadband wireless access services. Of these, the company says that nearly 4.5 million of these wireless broadband subscribers will also subscribe to Voice over WiMax (VoWiMAX) services.

Many in the high tech industry believe that WiMax has a big future - particularly in large urban areas - as a technology for broadband access. Currently, WiMax supports point to multi-point (PMP) broadband wireless access rates of up to 2 Mbps, over a minimum coverage area of 5-8km. Recently chip giant Intel launched its own WiMax chip, which it hopes will become the foundation of a first generation of fixed-point wireless broadband services.

The WiMax specifications envisage a theoretical capacity of up to 40 Mbps per channel, both for fixed and portable access applications. Future mobile connections will support speeds of up to 15Mbs at radiuses of up to three kilometres. As such, WiMax developers say the topology of the future is not multiple small private base stations connected to DSL lines as with WiFi but large stations covering whole towns and cities.

The ability to cover whole regions is expected to be attractive to developing countries where the infrastructure can be built from scratch. If VoWiMAX is added to the mix, the potential becomes even more compelling.

However, InStat is less certain whether there will be mass migration to VoWiMAX. 'The market success of WiMax is far from certain,' said Keith Nissen, an analyst with InStat. 'Consumer broadband markets cannot support an unlimited number of Broadband Wireless Access (BWA) service providers. Increased broadband competition, price compression and high subscriber acquisition costs threaten to drive margins ever lower.'

The company estimates that BWA service providers are likely to take a maximum 15 per cent market share in metropolitan areas.

Author: Steve Malone