From robust and reliable backhaul, to applications tools for developers, to femtocells, Clearwire speakers covered a lot of ground at the Feb 10th IEEE ComSocSCV meeting in Santa Clara, CA. For backgrounder and slides:
Whither WiMAX Handsets?
For sometime, I've wondered if mobile WiMAX could succeed without any handsets (especially smart phones). I thought mobile VoIP would be the way to go, because there would be an opportunity to combine voice with various Internet applications and that voice calls would essentially be free as they'd be overlayed over the broadband data network. However, it does not seem to be happening at all. This despite one of our esteemed ComSoc Discussion Group members who wrote in a blog post earlier this year, "Mobile VoIP and mobile video are the 2 killer apps for mobile broadband in 2010. Both of these will drive the adoption of technologies like Mobile WiMAX in a way unseen like before."
We don't agree with this assessment and here's our analysis:
During our February 10th ComSocSCV meeting, Simon Ma asked the Clearwire speakers a very relevent question, "When you do release your WiMAX phone (later this year), will it use mobile VoIP or cellular voice." Clearwire's Allen Flanagan understandingly refused to answer that question, because the CLEAR handset has not been officially announced nor has the vendor been publically disclosed.
That got me thinking. Three of the four CLEAR network operators- Clearwire, Comcast, TW Cable-don't own a cellular network. So, to make any money from a voice service they would need to either use mobile VoIP or have an MVNO arrangement with another carrier. But there are evidently technical problems with mobile VoIP (do you know of any carrier that has a mobile VoIP service with paying customers?). More importantly, the CLEAR footprint is insufficient for good mobile VoIP coverage and that will be true till at least 2011 when they complete most of their WiMAX buildouts. And then there's the prickly issue of mobile VoIP/WiMAX roaming and handoff with cellular carriers. Is QoS inherent in the IEEE 802.16e-2005 standard, the answer?
We were surprised to learn that Clearwire has implemented QoS in their current network. Clearwire David Rees said, "Clearwire RAN vendors have implemented IEEE 802.16 specification for QoS and Clearwire is currently exercising QoS for fixed and mobile VoIP." But Clearwire is negotiating QoS with the FCC (part of the FCC’s Open Internet NPRM) and has yet to finalize a policy for offering QoS to application developers. They are targeting an early 2011 launch for that. So if mobile VoIP apps were to be offered on handsets before then, they could not use QoS.
Our first conclusion is that mobile VoIP will NOT happen over WiMAX anytime soon, if ever. Yet Clearwire and Sprint still plan to sell WiMAX enabled phones this year. Cleawire CEO Bill Morrow recently told the Financial Times that the company's ability to deliver high-speed mobile data to customers will remain its primary competitive advantage, he also acknowledged the company would need to offer traditional voice services to compete with rivals. "Voice is still very important . . . we will be in the smartphone business and will launch devices this year," he said. Morrow noted that there is "a natural affinity" between Google's Android operating system and Clearwire's all IP-based network.
So that leaves GSM vs CDMA for voice. Let us examine that issue. It's been rumored that T-Mobile might be an MVNO for CLEAR, in which case Clearwire could be an MVNO for T-Mobile's GSM based cellular voice service. But that seems unlikely. So our second conclusion is that the pre-announced Sprint and Clearwire WiMAX phones will use CDMA for voice. That implies that Clearwire will need to be an MVNO for Sprint's CDMA network. Yeah- reciprocal/ bilateral MVNO agreements between the two companies!
Is a multi-mode phone the answer- one that can work on any network. We don;t think so. Can you imagine the power consumption (high) and battery life (short) of a quad mode phone with WiMAX for data/video only, WiFi, CDMA and GSM? And how expensive would such an unsubsidized phone be?
Will there be a significant global market for a WiMAX phone that uses WiMAX for Internet access and CDMA for voice? For sure, the CDMA market is much smaller than the GSM market. And there's no new investment in CDMA infrastructure- its days are surely limited. But Sprint only has CDMA.
All of this has most likely been recognized by the device makers. It is probably why you haven't heard announcements from Nokia, Apple, RIM, Palm, Motorola and other smart phone players about making a WIMAX enabled phone. We think the only prominent WiMAX phone makers will be HTC (that already makes a WiMAX phone for Yota in Russia) and Samsung (that is heavily committed to WiMAX infrastructure equipment and is a leading cell phone maker).
Free Voice over 3G Networks?
And there will be much cheaper methods of making calls on mobile data networks available very soon. On a February 16th conference call, Verizon Wireless (VZW) and Skype announced an agreement whereby any smart phone on the VZW (EVDO based) data network can download an "always- ON" free application, that will make it possible to initiate and receive Skype calls without consuming any voice minutes. The hand held devices (i.e. smart phones) that can run this new app will include VZW's band of Research In Motion Ltd. devices as well as its trio of Google Inc. Android-powered devices, including the Motorola Inc. Droid, HTC Corp. Eris and soon to launch Moto Devour. Skype and Verizon Wireless said the new application was specifically tailored to maximize battery life on a mobile device, despite its always-ON nature. The app will integrate with the smart phone's address book and allow for Skype's presence capabilities. The smart phone address book would be much richer and deeper when integrated with this mobile Skype capability. This is because presence status would be available to all callers who would not be tethered to their PCs anymore.
There were said to be 580M Skype users and 90M VZW customers who could take advantage of this new "mobile Skype" app for smart phones, which is scheduled for late March 2010. While many think of Skype and VoIP as being synonymous, the aforementioned mobile Skype capability was said to use VZW's circuit switched data network (EVDO) and not VoIP to deliver the Skype calls. The call quality was said to be "terrific. All a VZW customer needs is a smart phone and a data plan.
For a very long time, this author has said that mobile WiMAX's main competitor was 3G and not LTE. With so many iPhone and Android apps, 3G has gotten a lot more attractive. With essentially free Skype calls over the VZW data network, 3G is even more compelling.
Mobile WiMax vs 3G? (Drum roll) The winner is……………………………………………………………………..
We'll leave it to the reader to answer that question.
Note: This author welcomes any comment, critique or challenge to this analysis.