WiMax Update

Barron’s writes:

Intel is expected to announce shipments of its first chip for WiMAX, a far-reaching wireless broadband technology. The chip has been sampling to equipment makers since the fall, under the code name “Rosedale.” A nascent wireless broadband industry hopes the chip will make WiMax service an economical proposition, by allowing production of WiMax modems that subscribers could buy for under $200 and install indoors without a technician’s help.

Gearmakers planning to use Intel’s chip include Israel’s Alvarion Networks (ALVR) and Airspan Networks (AIRN), a Boca Raton, Fla.-based company that announced Rosedale-based products last month. China’s up-and-coming networking vendors Huawei and ZTE are also jumping on the WiMAX bandwagon.

A proto-WiMAX service is already successful in Sydney, Australia, using equipment made by Navini Networks, a Richardson, Texas, startup. America’s first WiMAX services will appear in the second half of this year. They won’t give cellular service operators much to worry about, because they’ll only connect to subscribers in fixed locations — serving as alternatives to the phone companies’ Digital Subscriber Line service or the cable TV industry’s cable modems. Companies like Qwest Communications (Q) have expressed interest in offering WiMAX to customers in remote locations where its wires don’t reach. Other service firms, like AT&T (T) or the privately held TowerStream can use WiMAX to compete against local phone companies in big cities like New York. TowerStream has base stations on skyscrapers like the Empire State Building, and already offers businesses the wireless equivalent of the data service that phone firms call T1 — at less than half the price. Along with a fast data connection, most WiMAX services will layer on phone service, thanks to the up-and-coming technology known as Voice Over Internet-Protocol.

WiMAX promises to become a technology that could bring the Internet to the world’s next billion PC users in emerging markets, where wire and cable don’t exist. Intel’s Scott Richardson figures that it will take about five years before WiMAX is a really big thing.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.