Many Malaysian broadband Internet users, including the broadband-starved ones hope that with more wired and wireless broadband service providers, they’ll enjoy faster speeds and better quality of service at lower prices than those by the incumbent provider but will especially the new wireless broadband services meet their expectations or will the song remain the same. Charles F. Moreira finds out from industry insider, Little Bird.
Our green and blue feathered friend, Little Bird, came fluttering in the other day: “Squawk! We’ve got to talk about Malaysia’s wireless broadband scene.”
Minister of Energy, Water and Communications, Dato’ Seri Dr. Lim Keng Yaik thinks Mobile WiMAX from the four 2.3GHz WiMAX licensees will take off from the middle of 2008. Considering the delays thus far, is that timeframe over optimistic?
Lim urged forming a consortium to build and operate a single shared mobile WiMAX network. Saving high capital and operational costs, the four only compete to provide services. They won’t have conflicts of interest, like those plaguing earlier attempts.
However, there could be other issues. So we asked our feathered friend whether WiMAX, especially the mobile kind, would fly in Malaysia.
HSDPA vs WiMAX
Generally Little Bird believes HSDPA will win over WiMAX, having marketed early with commercial service. 3G devices have a head start over WiMAX. Litle Bird says HSDPA has delivered on high-speed connectivity.
However, he doesn’t see a problem with availability of desktop WiMAX devices by mid-2008, like the kind Maxis now uses for its home HSDPA wireless broadband. But handheld WiMAX devices will come later.
“Intel’s announcement that it would put WiMAX on its Montecino chipset by the end of 2007 will give WiMAX a big boost, like its Centrino chipset in notebook PCs did for WiFi,” said Little Bird.
Intel has so far dropped the idea of coming out with HSDPA chips for notebooks. Little Bird feels this is shortsighted, as WiMAX might be big in the United States but HSDPA applies elsewhere. But this is not an insurmountable problem. Notebooks manufacturers could easily integrate HSDPA cards into their notebooks like what some have done with Bluetooth.
The hidden costs implementing WiMAX
While Little Bird sees a common infrastructure as a good move, he also sees problems differentiating between licensees.
Also, while he agrees that rolling out a wireless network is certainly cheaper than a wired one, there are other issues affecting Mobile WiMAX operators the same way as mobile cellular operators.
WiMAX proponents often cite the low cost of popular IEEE standards-based technologies like Ethernet and Wireless LAN. Thanks to economies of scale, eventual costs of IEEE 802.16-based WiMAX equipment could similarly become low.
“Equipment costs comprise only part of the costs of a WiMAX network. What many tend to overlook are the additional infrastructural costs, like those of the civil works, site acquisition, the towers, base stations plus operational and maintenance costs.
These costs are absent in wireless LAN (WiFi) and Ethernet installations but would make owning and operating a WiMAX network about the same as a cellular network,” said Little Bird.
These costs will ultimately determine what operators charge for their services.
“Also, while WiMAX operators can also use WiMAX in their backhaul connections and save costs, so can cellular operators. So they would be more or less on par in this respect,” he added.
Freebie WiMAX?
Also, WiFi is often provided for free, and people have grown used to not paying for services.
“However, who is going to operate WiMAX as a free public service?” Little Bird asked rhetorically.
While the Singapore government provides free public WiFi, there must be a reason, like benefiting businesses, banks, and others.
“For example, instead of people paying to do Internet banking, banks save money on hiring staff by implementing it,” said Little Bird.
He feels WiMAX will take time to roll out. But that’s not really the issue, as rather it’s the services carried over the network and their pricing.
“For example, GSM is just a technology but its selling point is roaming. So if a HSDPA operator wants to stave off WiMAX, it would have to come up with good roaming rates,” said Little Bird.
He also feels 3G operators could better optimise their spectrum and provide better data service by separating voice and data.
“Each 3G operator was awarded 15MHz of spectrum. But they currently only use 5MHz of that, when what they could do is use the existing 5MHz mainly for voice and another 5MHz for dedicated HSDPA-service,” he said.
Content in the driving seat
So far, the battleground between broadband service providers has been over providing access and in signing up as many subscribers for their HSDPA, iBurst, WiMAX and other Internet access services.
Little Bird feels that more important than merely having a 3G phone and being counted as a 3G subscriber is what the 3G phone is for or even whether there are any other services for them.
“Once everyone has wireless broadband access, content will drive the market. As more broadband becomes available, more people will try and bypass their call charges by using packet-based services like Skype. This will cut into their revenues, and is a grey area for regulators to control,” said Little Bird.
“Some operators like Vodaphone have taken their own initiatives to curb VoIP by detecting the type of data traffic used by subscribers and charge for voice calls. However, telcos should compete with services like Skype, like offering similar services at similar budget rates. Make calling simple - pick up a phone and dial. Not downloading and installing a dialer on a PC, using a microphone and headset,” he added.
He’d also like to see operators introduce flat monthly rates for voice calls. In the UK operators charge flat monthly rates for national or calls within, and around Europe and the US.
So far , Little Bird sees little demand for overall content in Malaysia, besides ringtones and logos, which people are willing to pay for.
“Advertisers could pay for services, as there is a market for infotainment services,” he said. “It’s like free-to-air TV, supported by advertisements. Or the government could provide the service and charge TV license fees.”
However, he believes people will be willing to pay for useful services, provided they are aware of them. So marketing departments must get it right by coming up with good portfolio of services.
What will succeed is a revolution in voice and messaging infrastructure, providing information on where people are and multiple communications options.
“For example, why send an SMS or an MMS instead of just a message, whatever forms it takes,” said Little Bird.
In case you’re wondering, Lim isn’t Little Bird.
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