The question is, is Wimax going to have a siginificant place in Indonesian telecommunication market? Let me introduce a bit about our market. Currently we have 13 telco operators including the incumbent PSTN operator PT. Telkom. 12 of it are wireless operators with majority are in GSM camps. The rest are based on CDMA. 3 operators out of it dominate the market, and all of them are GSM operators, with 3G and HSPA networks as well. They dominate 90% of total subscribers. Their network has been extended to places where even you never heard of, I mean sub urban is really sub urban. Indonesia auctioned the 3G spectrum licenses in 2.1GHz in 2006. And aside of smaller 3G operators that have been allocated before, all big 3 got the license for the first 5 MHz. In the auction, 2 operators concentrate on building UMTS and will offer multimedia services, while 1 operator concentrate on mobile broadband and jump to HSDPA. And guess what, mobile broadband is a success, while video call and multimedia services doesn't take off. And therefore the other 2 are catching up to upgrade to HSDPA and offer mobile broadband as well.
And why it is like this? Because, Indonesia is one of the lowest Internet penetration in Asia. Poeple are hungry for bandwidth. Existing Internet service provider dominated by ADSL but the service are poor. People with mobility don't have too much choice (CDMA 1X though offers 153kbps service, and 1 operator even launch EV-DO). But the alternative is not that successful, considering the high price per KB. With the mobile broadband introduction, the price fall sharply, in order to promote the service, considering the HSDPA coverage is very limited. But after 2 years, with increased demand, the coverage is much improved, and throughput are improved. Many node Bs are connected with metro ethernet over fibre, though most of it are still using microwave transmission. And even one operator has upgraded the network to 14.4mbps capability.
Now, back to Wimax. Suppose that the tender has been completed, and either new comer or incumbent won this, they have to build the network. Suppose that Wimax could catcth the HSDPA coverage from the incumbent within the first year of deployment, would it be succesfull to compete with HSPA? the answer is No. Why? shouldn't it be accepted by the market due to Intel laptops will be naturally Wimax capability?
Several points are the reason why it does like that:
- First, in case the Wimax operators is not incumbent, they will have to build new sites or rent existing sites from tower operator. But, these towers are filled with many operators already (12 wireless operators, imagine that). And, transmission access will be a big challenge. Even existing operators have difficulties to increased the capacity on each sites.
- Second, suppose that Wimax is targeting residential area. They will be competing with not only HSDPA, but also ADSL and cable operators. Of course Wimax will have the advantage with their Intel laptop integration.
- Third, Wimax will have difficulties catching up the existing HSDPA network, therefore the coverage will be limited, compare to GPRS/UMTS/HSDPA. Why, even if the coverage is in par with HSDPA, but once you're out of Wimax network, what would you get? nothing. While HSDPA will either fall to EDGE network, or worst is GPRS. And you will still get your data connection. Please note that one of the big 3 has extensive EDGE network to backup its 3G. Most of users will satisfy with 100kbps when availability is in need.
- Fourth, HSDPA operators will not just sit in. They will evolve to LTE. Maybe a couple years late, but the transition will be no issue. Interim HSPA are able to provide from 3.6Mbps to 42Mbps when the MIMO variant comes out before LTE is arrived. Sufficient enough for most users when they just need for browsing and email.
- Fifth, voip over Wimax will be a challenge. It is not entirely 100 percent native, but it will need IMS to provide QoS control over it. LTE will have it also. While indonesian market are still dominated by voice, and UMTS still have advantage of it.
- Sixth, huge roaming infrastructure in the world, mobility is the big advantage. Remember why CDMA is not as succesful as GSM despite of more advance radio technology? One of the reason is roaming. GSM was invented by the European, and they need to travel accross countries without having to change their numbers.
- Intel Laptop, they will be natively wimax capable. Will help the penetration faster.
- Many vendors to choose will result to cheaper roll out cost (not including base station sites).
- Flat architecture, will give higher throughput and low latency. Good for video applications, and maybe IPTV.
- Strong suppport by the government.