October 7, 2008

WiMAX Trickling into Small Ops Space

By Craig Kuhl

The emergence of WiMAX as a viable technology and business model is prompting the small, independent cable community to explore its use as a new revenue source.

Linked to large telecom providers such as Sprint, which launched its much-anticipated Xohm service in Baltimore last week, WiMAX is also on the white boards of some smaller cable operators.

"Of our 1,100 members, including many small, independent operators, more are investing in new technologies that can be amortized across the entire subscriber base, and more are holding licenses for 700 MHz in certain markets," said Alan Tschirner, vice president of technology for the National Cable Television Cooperative.

The FCC's auction (No. 73) for that 700 MHz spectrum in June included some new players in the WiMAX space. Tschirner pointed to smaller cable operators such as Sunflower Broadband, S&T Telephone, Cable Montana, and a top-five MSO, Cox Communications.

"There were some cable companies and NCTC members in those cellular markets," Tschirner said.

Yet for most of the smaller, independent cable operators, actually deploying WiMAX technology and crafting a business model around it remains a stretch.

"With subscribers so widely dispersed, it's hard to aggregate, so it's more difficult to realize a return on investment for the smaller cable operators in the wireless space," Tschirner said. "Then with independent operators, capital resources are difficult, and general managers are usually second and third generation, with not many subscribers. Our role is still undefined, but if there is a role for us, we'll look at it."

WiMAX's trickle into the cable industry may open up, however.

"WiMAX is enabling us to expand market frequencies, and by new companies, not just by big cellular carriers," said Tom Gruba, senior director of wireless broadband access solutions for Motorola. "For cable, ISPs and phone companies, they can get spectrum in different regions and markets and expand their business into places they haven't been able to get to before."

Gruba also pointed to "a pent-up demand in developing markets." As noted in a CT report last week, demand in underserved international markets could help drive the WiMAX market. Those markets could include the traditional "developing world," or parts of rural, underserved North America.

This young technology market received another boost on Oct. 1 with the announcement that the WiMAX Forum had certified another 10 devices the 2.5 MHz profile. In June, the Forum certified four base stations and six mobile station modules, also in 2.5 MHz band.

The Forum expects certification of the first 3.5 GHz devices by the end of 2008.

- Craig Kuhl

Read more news and analysis on Communications Technology's Web site at http://www.cable360.net/ct/news/.