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HSPA vs. WiMAX - study says WiMAX will be a "niche technology"
Posted: 08-Feb-2007 [Source: Arthur D. LIttle]

[A new study by Arthur D. Little says "HSPA will account for most mobile broadband deployments while mobile WiMax may capture niche markets."]

London -- With over 93 commercial networks in operation, HSPA is likely to account for the majority of investment in global mobile broadband networks over the next five years, finds a new study by Arthur D. Little. By comparison mobile WiMax will be a niche technology within the overall global mobile broadband wireless access market, likely to account for at most 15% of this network equipment market and perhaps 10% of mobile broadband wireless subscribers by. In its latest report, "HSPA and mobile WiMax for mobile broadband" Arthur D. Little unveils a non-partisan view of both leading technologies to present an articulate guideline for operators, regulators and vendors, who are investing for the future amid a cloud of hype.

In this wide reaching study, Arthur D. Little consultants from its U.S. and European offices interviewed 31 HSPA and WiMax equipment vendors, operators running the networks, government regulators and financial investors around the globe. They also collaborated with Altran Telecoms & Media and Praxis HIS to collect some 300 parameters required for a quantitative assessment of the differences and modelled these in realistic deployment scenarios.

HSDPA (including HSUPA and HSPA+) is taking the lead as it is a natural migration path for a large number of GSM and UMTS operators already operating commercial networks in 3G spectrum. This will give rise to significant economies of scale on handsets and user devices and a large ecosystem of global suppliers of components, subsystems, equipment and network design and implementation services. Hence this is the least risky and best understood route to offering broadband mobile services which can offer speeds comparable to first generation fixed DSL services.

Commenting on the findings Michael Natusch, head of Arthur D. Little's UK TIME (Telecoms, IT, Media and Electronics) practice, said: "The momentum in HSDPA deployments has been stimulated by competition from other broadband wireless technologies and by the prospect of competition from mobile WiMax. However, there is as yet no convincing real-world evidence of the actual relative performances of these technologies in large scale deployments. Nevertheless, it is likely that these two technologies will achieve comparable levels of performance in typical real-world situations, contrary to the notion that mobile WiMax should be regarded as a "Killer" technology.

The results of Arthur D. Little's modeling work shows that WiMax systems are expected to achieve significantly greater theoretical peak data transfer rates when deployed than today's commercial HSPA networks deliver now, such as theoretical speeds of e.g. 16.8 Mbps in urban areas vs 2-3 Mbps for HSPA. However, the coverage a WiMax base station can achieve, is substantially lower than HSPA, hence HSPA operators will be able to deploy a smaller number of base stations and sites to cover the same geography. Indications are that radio access network capex for current WiMax technology can significantly exceed HSDPA capex.

Another consequence of this characteristic of these two technologies is that an HSPA operator will be able to match its growing investment more clearly to the development of demand than mobile WiMax operators who will have to install more cell sites at the beginning to ensure coverage.

Arthur D. Little acknowledges that in the longer term, well into the second decade of this century, mobile broadband wireless systems will be characterized by technologies such as OFDMA and MIMO. Development of these technologies is being pursued by the 3G/HSPA ecosystem within the framework of 3G LTE as well as by WiMax. The long term future relative roles of 3G LTE and mobile WiMax, both of which face major development hurdles before they achieve the full promise of new, so-called 4G systems, is uncertain and will be influenced by continuing expected shifts in the priorities and competitive alignments of major players in the wireless industry which has undergone a number of consolidations in recent months.

In contrast to many other reports on HSPA, mobile WiMax and other broadband wireless technologies, the Arthur D. Little study highlights and assesses all the factors - strategic, competitive, commercial, regulatory and political as well as technological that influence operators' choices of wireless network technology.

Evidence for the potential complementary nature of HSPA and WiMax can be seen in the increased interest in multi-mode user devices and roaming capabilities across the technologies. This development, which reflects the widespread anticipation of the central role of OFDMA and other technologies involved in WiMax and 3G LTE in all eventual future broadband wireless networks, is a welcome change from the provocative and misleading headlines that have appeared over the past two years which imply that mobile WiMax threatens the viability of today's HSPA and related technologies.

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