The risks of all-IP
Such a strategy gets to the heart of the way in which Wimax could set itself apart from HSPA and LTE. At its core, Wimax is designed to be an open IP-based network. That means it has the freedom to try out new business models such as open access - i.e. as long as it's certified by the Wimax Forum, your device will work on our network, and you can include more than one under your service contract - and selling devices through retail consumer electronics stores. It also means the ability to offer more flexible tariff packages, where one can buy a day pass, for example.
To be sure, LTE is also designed to be all-IP and can exploit many of the same benefits. A number of vendors are already urging cellcos looking at LTE to make sure their core networks can handle the QoS functionalities on an end-to-end basis.
"There are several important aspects that are crucial to the LTE core," says Francesco Masetti-Placci, VP of solutions, strategy and marketing at Alcatel-Lucent China. "The first is latency requirements, less than 10ms, which cannot be supported with current architectures. Also, as you can expect a larger number of simultaneous users, you need more sophisticated processing power in the routers. And the architecture needs to be designed in a more distributed way to support the four classes of QoS under UMTS, which has to be mapped into the new architecture. Then policy based end to end QoS can be enforced."
However, for cellcos moving to all-IP, the potential snag may not be the technology to enable it, but the open-access business model that comes with it and runs counter to the existing cellco model of locked devices and two-year contracts.
To date, cellcos have been slow even to adopt IP models like flat rate access. UQ intends to exploit this to the limit, says Tanaka, who says that Japanese mobile users aren't just unhappy with the handsets as Internet devices - they also don't like being locked into contracts and see 3G operators as "the bad guys".
All of this represents a major and crucial opportunity for Wimax to differentiate itself now, says Gabriel of Rethink Research.
"Of course, LTE will be closer to Wimax in many key areas, such as all-IP and spectrum allocations, but with widespread LTE several years away, the priority for the Wimax community in 2009 is to put clear water between its own platform and HSPA/EV-DO, and demonstrate that the systems have very different functions, all needed in the mobile broadband world," she says.