Analyst firm Frost & Sullivan has sunk the boot into the much talked about high-speed mobile broadband service known as WiMax, saying it will play a secondary role to 3G in Australia in the coming years.
A key restraint of the emerging WiMax technology at the moment is its lack of mobility. While users can get fast Internet wirelessly, the moment they are in motion, for example, on a train, the signal drops out.
According to Frost & Sullivan analyst Tony Tu, this is one major hurdle the wireless industry needs to overcome if it intends to pick up customers.
In the meantime the ability of the current 3G networks by Vodafone, Optus, Telstra and Optus across metropolitan Australia to provide reasonably fast data speeds weighs against WiMax, limiting it to a supporting role, he claims.
"WiMax is complementary to 3G data services as it provides high bandwidth. But we see it as a nice offering," he said.
Furthermore, the ability of 3G to scale to the even faster HSDPA, known as 3.5G, may be a more worthwhile proposition for subscribers as the basic infrastructure already exists.
HSDPA is High Speed Downlink Packet Access, a mobile broadband standard capable of reaching downlink speeds of 14.4Mbs. In real life, users can expect actual download speeds of between one and 1.8Mbs, with peak upload speeds of 384Kbs.
"It is unlikely existing mobile carriers will invest in WiMax. HSDPA is a cost-effective alternative to existing mobile carriers," he said.
One of the key players in the wireless broadband, and soon to be WiMax space, Unwired, disagrees with Tu's assessment. Unwired's CTO Eric Hamilton said the assumption that WiMax will be in a supporting role is not proven.
"In fact, the question that needs to be considered is whether WiMax will intrude into 3G territory by offering voice, video and other applications."
Hamilton says WiMax will have better performance compared to 3G-based technologies. "This will be the case in terms of all three Cs - Coverage, Capacity and hence Cost."
He said this will be most apparent when customers seek to use a "true" broadband service, where significant uplink (from the customer to the network) capacity is used as well as downlink capacity (from the network to the customer). "In these circumstances the WiMax technology has a significant advantage," he said.
"If a large number of customers choose to take up wireless broadband services, the amount of spectrum and infrastructure needed to support services will be important. At this time suppliers of 3G-based services have significant spectrum limitations, while Unwired and Austar are extremely well placed to take advantage of their spectrum holdings to provide a wide range of broadband services to fixed, portable, nomadic and mobile users across Australia."
Tu said mass adoption in Australia of WiMax should take place in 2009, predicting 500,000 Australians will be subscribed to the technology. This is when chipset-embedded notebooks and Customer Premises Equipment drop to more affordable levels.