WiMAX Takes VoIP by Storm

Tom Keating : VoIP & Gadgets Blog
Tom Keating
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WiMAX Takes VoIP by Storm

I predict WiMAX using VoIP will be your next home phone and your next cell phone. First, let me lay the groundwork, since you may not be familiar with WiMAX. WiMax is a wireless radio technology that promises to deliver two-way Internet access at speeds of up to 75 megabits per second at long range. Think of it as WiFi on steroids. It will require service providers to deploy WiMAX equipment and one might argue what is the incentive for them to build out another network that may even compete with their other data services such as frame relay, T1, 3G, or even cable or DSL broadband access. Now add Voice over IP to the mix, and you have a very compelling and potentially industry shattering technology that can change the telecom landscape. If you think VoIP over broadband cable & DSL has caused a paradigm shift and a price drop war, just wait until long-range, ubiquitous, broadband access from WiMAX starts getting deployed!

Just a few months ago, AT&T claimed it was dropping out of the residential market causing technology journalists and AT&T competitors to swarm over the "supposed" dead AT&T carcass like vultures. I can't tell you how many journalists fell for AT&T's trick and claimed AT&T was "surrendering" the residential market. I dispelled the myth about AT&T's "supposed" surrender here: http://blog.tmcnet.com/blog/tom-keating/voip/archives/att-the-sleeping-giant-awakens-to-blitzkrieg-the-voip-market.html
and here:
http://blog.tmcnet.com/blog/tom-keating/voip/voip-blog/att-surrenders-residential-market-i-dont-think-so.asp

The reason I bring up AT&T and two blog posts is becase at a recent tradeshow, AT&T's chief technology officer was quoted as saying AT&T has "8.5 billion reasons to embrace superspeedy WiMax wireless technology". $8.5 billion is the amount that AT&T pays other telephone companies for access to their networks, thus allowing it to provide communications services to customers. "We spent $8.5 billion on local access last year," Eslambolchi said. "I'm going to find any way I can to bypass that as fast as we can." $8.5 billion is certainly not chump change, and hey, anytime a Fortune 500 CTO speaks, I listen!

But what does he really mean? Why was he pushing WiMAX technology so hard? Was it simply to save the $8.5 billion dollars? Well, not quite. AT&T wants to get directly into your home with high-speed data access so they can provide VoIP access via their CallVantage service as well as other enhanced services, perhaps video-on-demand or even wireless TV.

What has AT&T and others are excited about is the low start-up costs for WiMAX. Typically, it takes $1,500 to lay down underground fiber to a single home whereas the cost of a WiMAX hookup is $75. This price-point is probably even more competitive with higher margins than even broadband cable or DSL. This certainly can make AT&T offer CallVantage as a lower pricepoint that Vonage, Packet8, Lingo, and other competitors. Which makes me wonder if Vonage will one day stop being just a "user" of broadband bandwidth and one day be a provider of broadband bandwidth using WiMAX - just so they can continue to compete.

AT&T plans to begin deploying the technology in 2006, and I should mention that Covad is also planning on offering WiMAX..

So getting back to my prediction, I predict that WiMAX will have a huge impact and that the next generation of cell phones will be WiMAX enabled. What this means is that expensive >$100 cell phone bills will be a thing of the past. Unless the WiMAX providers block VoIP (which I doubt), you should be able to make VoIP calls from your cellphone using a SIP softclient or other type of softclient - at least on smartphones (PocketPC phones, Treo, etc.). I also predict at least one cell phone will have Skype embedded which will offer free VoIP calling anywhere in the world across WiMAX.



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