WiMAX, or Worldwide Interoperability for Microwave Access, is one of the most promising new technologies on the IT and telecoms market. A high-speed broadband standard akin to Wi-Fi but with far greater range, WiMAX is still very new and relatively underutilised even in traditional early-adopter countries like the United States and Korea.
WiMAX proponents say the technology represents nothing less than a watershed in the way wireless data is carried. "This is one of the key trends in IT and telecoms in Ukraine," says Oleg Gorbachov of Intel Ukraine. Intel, as well as being a shareholder in Alternet, is the most prominent global WiMAX hardware developer and investor.
One Ukrainian company has got in on the ground floor and launched a WiMAX service. Alternet, the trading name of the Ukraine High Technologies (UHT) company, which is owned by Intel Capital and Russian technology venture capital funds, has over the last few months been incrementally rolling the technology out across the country.
Alternet’s rollout plan
Following a commercial launch in October 2006 in Kyiv and Kharkiv, Alternet announced in February that the service would be extended to all other Ukrainian cities with over 1 million inhabitants - Donetsk, Dnipropetrovsk, Odessa and Lviv. "The rollout plan is to have WiMAX available in all 27 regions of Ukraine by the end of the year, at least in the main cities of these regions," says Yuri Chuikov, Alternet’s General Director.
After six months of operation and USD 1.5 million of investment in its network, Alternet has 1000 subscribers "They are divided 50/50 between businesses and individuals," Chuikov says.
A thousand does not seem like many, but Chuikov explains that the company has ambitious growth plans. "A realistic target is to have half a million subscribers by 2011, though I personally believe it could be in the three to five million range."
Alternet had a long and frustrating startup period due to problems with obtaining the necessary licence from government regulators - a dispute which ultimately had to be settled in court. After a-year-and-a- half of legal tug-of-war, the company was finally given the green light in September 2006. "We now have a very good relationship with the government," Chuikov says. "We have a nationwide exclusive license for WiMAX in the 3.4-3.6 Ghz band until 2021, which gives Alternet a good opportunity to develop a successful business."
WiMAX is set to become a strong competitor for other wireless data standards such as Wi-Fi, 3G and satellite. It will also compete to some extent against wired high-speed systems such as CATV and ADSL. Chuikov says he is confident that WiMAX will emerge as a future leader in telecommunications. "By combining the best radio coding and IP-based architecture, it offers the best of both worlds," he adds.
Advantages over copper wires
The evidence is strong that he may be right. WiMAX has the advantage of range over its competitors, extending kilometres rather than the few hundred metres offered by Wi-Fi and with the kind of speed that existing 3G mobile technologies cannot compete with.
On how WiMAX stacks up against cable-based broadband systems, Chuikov says WiMAX is more likely to supplant them than become an outright replacement. "I am not competing with them face to face because they are faster, but they need the copper wire. If there is no copper wire, there's no possibility for cable and ADSL and we can still give access where they cannot. Our unique selling proposition is access; we can provide service where no one else can. This is why the most targeted areas for the technology are downtown areas and suburbs."
In urban areas, the existing telephone infrastructure is often unsuitable for high-speed ADSL as the copper wire diameter is not wide enough to carry the signal a reasonable distance without high levels of line noise, which cuts speed considerably. The cost of installing new wiring in city centres is often prohibitive, making such areas primary target markets for WiMAX.
Suburban areas, especially in countries with less developed legacy telecoms systems, also have a high potential for WiMAX penetration as they may not have any existing infrastructure at all. Of lesser potential are the zones between central and suburban areas consisting of newer residential buildings which are often served with modern fibre optic cable-based networks.
One initial sign of confidence in the system is that banks are entrusting WiMAX to serve their ATM networks, according to Chuikov. "Banks want to put ATMs everywhere and are often restricted by the availablility of a suitable line. We provide them with a wireless connection," he says. Alternet has just finalised a deal with several leading banks. The equipment has been under test for two months and the first wireless ATMs in Ukraine are scheduled to be installed later this year.
Mobile WiMAX coming next
Currently Alternet offers only WiMAX technology for fixed users via a wireless modem type device. Mobile technology in the shape of WiMAX adapters for laptops is due to arrive in Ukraine next year, which will drastically increase the appeal of the product.
Over the next few years, WiMAX will be embedded in laptops in the same way thatbuilt-in Wi-Fi has become a standard feature. "In Q1 2008 we will have PCMCIA [laptop] cards for mobile WiMAX and in Q3 we will see the first embedded chips," Chuikov says. Mobile devices are expected to be released in 2009, similar to mobile phones offering video, data and voice, while providing speeds of up to 2 Mbps.
Other telecoms still sceptical
These developments are putting some mobile and 3G operators on the defensive and WiMAX is not without its critics. “The skeptical people are those who work for GSM and 3G companies," Chuikov says. "I don't know of any drawback to WiMAX. It is the best state-of-the-art technology."
Trond Moe, head of the Ukrainian representative office of Telenor (the parent company of Ukraine’s leading GSM operator Kyivstar), says WiMAX will not be a serious competitor for at least the next five to ten years, despite it being a technology the company is watching closely. "We are interested, but it is too immature at the moment," he says.
Non-telecoms operators also have their reservations. According to Tatjana Papova, Chairman of the Board of the Ukrainian Internet Association, fibre optic cable will continue to dominate Ukraine’s growth in national internet penetration, which she expects to double over the next year from its current estimated level of 7%. She however adds that WiMAX could make a considerable impact in small cities without developed high-speed cable networks.
Future still uncertain
Maxon Pugovsky, Editor of the internet and online media magazine Internet.ua, is more reserved on making any judgements as to WiMAX’s likely impact. "It is still hard to predict the success of WiMAX as there is to date very low penetration in the Ukrainian market...WiMAX will not be an influential player on the market this year...WiMAX is mostly beneficial for people in rural areas but for the moment demand for Internet in these areas is not strong."
But there is good reason to believe in the success of the technology given the high profile of its backers. "Intel sees WiMAX as a key solution for broadband connectivity in the long term," says Gorbachov, who adds that over the next two years WiMAX is expected to be more widely available in Intel-based laptops and a variety of other mobile devices.
According to Gorbachov, the main advantage of the technology is that people all over the country will have the opportunity to access the Internet via a system that offers quick deployment and low investment.
Whether he is right or not remains to be seen, but then who had heard of the now-ubiquitous Wi-Fi ten years ago?
