Summary
Spread-Spectrum technologies are not interim opportunities. The Frequencies they use, the modulations and the companies that roll them out are. Digital Electronic Messaging Services is the first Spread Spectrum Network I rolled-out in 1984 along with hundreds of other companies. Locate was about the largest. I was the with a start-up telephone company that used the technology in my core carrier backhaul network.
Analysis
The common denominator of Spread Spectrum Frequency and use is the quick deployment and low cost to deploy in frequencies normally allocated as "No-Notice" Frequency coordination. Wi-Max has two set aside here in the USA. Carriers need to be in the licensed band which is slightly more efficient in data rates while less robust in the flexibility to connect around objects/obstructions.
In 1997 I was deploying Wi-Fi, in 2005, I did my largest a 600 node metro public offering for a carrier. By 2002, I was reviewing OFDM for Wi-Max and in 2003 testing chipset and system prototypes and by 2004, I was attempting to deploy Wi-Max. The deployment considerations in the USA by the end of 2004 could not be seriously considered because all the vendors were too busy with deployments and deliveries to overseas sites. Wi-Max is widely used, very successful in these overseas markets. If Wi-Max is slightly successful here in North America, is already be overseas.
Several have commented on the applications of Wi-Max but few have commented on the distribution channel. Wi-Max was critical to the ongoing success of Earthlink but not chosen. Wi-Max for carriers is the market entry tool. Build to scale, then deploy when penetration warrants doing so. Construction and Market Entry are one application.
A more rich and high margin generating application is the opportunity to deploy with packet QoS and priority while considering your partners. Clearwire has partners who could create applications which benefit from QoS tools that operate as packet prioritization, bending the rules of Net Nuetrality.
Finally, consider the rich communications to be developed such as GSM/LDAP architecture examples. Right now in Wi-Max development, without an industry body to address standards, a Clearwire partner could deploy quickly becoming a defacto standard.
On to other issues, wireless performance quality is a red-herring argument. The flexibility of the radios in frequency hopping, transmission correction and recovery are leading edge, so much so over cellular/PCS and Wi-Fi. The arguments made about Wi-Max radio is inherent in all wireless technologies. Wireless is always un-secure and subject to environmental inductance.
The area I am most concerned is while Clearwire avoided the Cellular One deployment financing issues by addressing the liquidity of early investors and the adoption of equity stakes by strategic partners, the harder issue of heavily leveraged is just as dangerous.
GST Telecom founders liquidated early but the control went to parties who did not respect the niche issue and innovation requirements. Just like Electric Lightwave. The new owneres became extremely vanilla in every aspect of the business. Clearwire and Wi-Max vendors have to develop and exploit the niches, ignore the matching products of other technologies. A wireless roaming handset is the last thing Wi-Max needs. It is questionable whether it could compete against the 105 million subscriber penetration of the other five operators.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
