Advantages and cost effectiveness

WiMAX Advantages

  • Benefits to Component Makers:

    • Creates a volume opportunity for silicon suppliers.

  • Benefits to Equipment Makers:

    • Innovate more rapidly because there exists a standards-based, stable platform upon which to rapidly add new capabilities.

    • No longer need to develop every piece of the end-to-end solution.

  • Benefits to Operators:

    • A common platform which drives down the cost of equipment and accelerates price/performance improvements unachievable with proprietary approaches.

    • Generate revenue by filling broadband access gaps.

    • Quickly provision T1 / E1 level and "on demand" high margin broadband services.

    • Reduce the dollar risk associated with deployment as equipment will be less expensive due to economies of scale.

    • No longer be locked into a single vendor since base stations will interoperate with multiple vendors' CPEs.

  • Benefits to Consumers:

    • More broadband access choices, especially in areas where there are gaps: worldwide urban centers where building access is difficult; in suburban areas where the subscriber is too far from the central office; and in rural and low population density areas where infrastructure is poor.

    • More choices for broadband access will create competition which will result in lower monthly subscription prices.


WiMAX ADvantages and disadvanatges can be summarized as

Advantages :
1) Single station can serve hundreds of users.
2) Much faster deployment of new users comparing to wired networks.
3) Speed of 10 Mbps at 10 kilometers with line-of-site.
4) It is standardized, and same frequency equipment should work together.

Disadvantages :
1) Line of site is needed for longer connections
2) Weather conditions like rain could interrupt the signal.
3) 0ther wireless equipment could cause interference.
4) Multiplied frequencies are used.
5) WiMAX is very power intensive technology and requires strong electrical support.
6) Big installation and operational cost.


Cost-effectiveness analysis is a particular type of benefit - cost analysis in which the objective is to compare costs of two different means of generating the same information or end product.  Basically, it is a simple approach that compares the technical efficiency and cost of alternative methods to accomplish a given task, exogenously defined as required.  This approach is most useful when one is evaluating two systems, which yield comparatively similar outputs.  The basic steps in cost-effectiveness analysis are:

  • Define the objectives that must be attained;
  •  Identify the alternative methods of achieving the objectives or obtaining the output;
  •  Determine the costs of these various alternatives; and
  • Compare the costs and rank them.

Consider the following broad areas of WiMAX investment concerns:

Infrastructure includes the WiMAX base station equipment providing the downlink and uplink communication
channels as well as the WiMAX service edge network managed by the ASN Gateway supporting centralized
control functions for the network and negotiating the bearer path traffic through the core.

Device costs can contain subsidies for fixed and mobile WiMAX devices supported by the operator.  Devices may include outdoor subscriber units for improved coverage and capacity, self-install desktop subscriber units receiving signals through the building walls, PC cards to bring the WiMAX connection directly to the laptop for a nomadic experience, mobile devices featuring multimode/multi-band operations and broadband-like data throughput.

Core includes edge and core IP networking components supporting the IP traffic administered on the WiMAX network, content management and delivery nodes, and gateways to the Internet and public telephone net-work.

Site costs include site acquisition for deploying WiMAX base sites on existing properties, development of new towers and associated zoning, engineering and construction costs, as well as any enhancements or modifica-tions to existing sites to support the WiMAX equipment.

Backhaul considers the connections for backhauling traffic from each of the WiMAX base stations to aggrega-tion hubs in the wider area network via point-to-point links.  Traditional backhaul solutions have considered either T1/E1 leased line services or microwave links.  More recently, as backhaul requirements for high capac-ity systems like WiMAX have made leased line services economically unfavorable, operators are increasingly selecting more cost-effective, next generation IP wireless backhaul solutions.  

IT costs consider all aspects of systems architecture development and integration in support of the WiMAX network architecture and service.  IT may include operational and billing support systems, call record rating and mediation engines, and customer relationship management platforms.

Operating costs include ongoing network maintenance, support and warranty, subscriber acquisition costs, marketing and advertising, and general and administrative (G&A) expenses.

Capital Outlay versus Operating Expense
As in any major network deployment, the total cost of ownership of a WiMAX network will be comprised of both the initial capital outlay to procure the WiMAX equipment as well as the ongoing operational expense of managing and maintaining the WiMAX service.

While evaluation of the components contributing to the capital expense often consumes a large percentage of the operator’s WiMAX consideration, the operating expenses will over time far outweigh the initial capital outlay.

This  is  due  to  both  the  nature  of  telecommunication  operations  as  well  as  to  the  significant  capital  cost reductions engineered in leading WiMAX vendor solutions.  Such solutions may offer light infrastructure ap-proaches that benefit from an integrated design reducing real estate requirements and allowing for simple connections between components. Flexible hardware and software programmable radios provide the benefit of no-touch software updates. Integrated RF antenna design eliminates the need for costly and heavy coaxial cables between antennas and baseband modules and avoids power losses associated with heavy RF coaxial cables.  Additionally, the WiMAX network architecture can be realized as a simple, peer-to-peer network based on a flat, all IP design.  Such architectures can be significantly lighter and easier to install and maintain than traditional cellular based network designs and can substantially reduce the capital expense by leveraging IP
networking equipment.

Over the course of seven years, the capital expenses including components such as base station, core, and wireless backhaul equipment will contribute roughly 20% of the total cost of ownership while the operating expenses including maintenance, support, device subsidies, and administration will contribute roughly 80%.

This underlies the importance of designing and deploying the end to end service network with strong con-sideration  to  the  ongoing  management  and  service  support  requirements.

A  well  designed WiMAX  net-work must include a scalable approach to the infrastructure supported by common management elements to accommodate subscriber growth and usage over time, strong integration between network and systems architectures to support operating procedures throughout customer care and point of sale, effective backhaul strategies limiting ongoing lease costs traditionally encountered with wireline solutions, and versatile deploy-ment options to reduce site costs.

Why operators pick WiMAX
 The main incentive to deploy WiMAX has been growing demand for broadband connectivity, particularly in areas inadequately served by existing broadband networks. WiMAX operators have essentially identified a largely untapped opportunity in their respective markets and chosen a competitive broadband technology that is available today — one that is faster and less expensive to deploy than fixed technologies.

Other important factors driving operators to deploy WiMAX are:
•   Speed to market: Wireless networks can be rolled out much quicker than fixed networks. OneMax reports launching its network in six months in the Dominican Republic, and Umniah’s WiMAX launch in Jordan took less than nine months. Installing the network does not require the operator to acquire rights of way, which could take significant amounts of time. Moreover,
wireless networks may be the optimal way of providing connectivity in many emerging markets due to the lack of effective city planning.
•   Surgical network deployment opportunities:  With WiMAX, operators can build out their networks as they need to. Henc e, operators have been able to focus on specific areas where there is strong demand, allowing  them to generate a higher return on investment and to manage capex per subscriber.
•   Mobility and multiple-use scenarios: Many WiMAX operators are excited about mobility on WiMAX and the emergence of personal broadband. This is a key factor differentiating WiMAX from DSL. The mere fact that WiMAX operators can provide a range of applications that take advantage of the three modes of the WiMAX network — fixed, portable and mobile — could substantially expand their target customer ma rkets and enhance their value proposition, assuming these services can be priced at affordable levels.
•   IP architecture:  Because WiMAX is an IP-based technology, the introduction of new services should take less time, leading to new revenue streams. Besides, an IP core is future-proof: if need be, operators could deploy different technologies in the last mile.
•   Cost of spectrum: Compared with spectrum for 3G, Wi MAX spectrum has been less expensive worldwide.