It is not a secret that wireless technologies change the telecommunication character either among the common users or in corporate sector. However, for the retail segments moving to the wireless solutions connected with the expenses but for the corporate sector such expenses are only the minor part. Moving to the wireless technologies is connected with the number of the expenses and most of them influence on the philosophy and the strategy of the Company in the whole. Furthermore, according to the last research, corporate sector is not still ready to move on the new technologies.
Wireless telecommunications for the enterprises — trend or a plaything?
Nowadays the wireless broadband access (WBA) market in Russia consists of the several technologies. Along with the pre-WiMAX/WiMAX is the Wi-Fi, and also mobile technologies such as CDMA 1x EV-DO and HSDPA. And the WBA evolution is the following: GSM — WCDMA — HSDPA — HSUPA — LTE; CDMA — CDMA 1x — EV-DO Rev.0 — EV-DO Rev.A — EV-DO Rev.B — EV-DO Rev.C и 802 — 802.11x (Wi-Fi) — 802.16a — 802.16d — 802.16e.
Fact: wireless broadband access despite the obvious advantages for enterprises such as do not need to lay the cables, do not “tied up” the work place, and finally personnel can work at home, does not find the interest to be in use in the enterprises. On September 2007 less than 5 thousand organizations use the wireless solutions in Russia.
There are several reasons. Firstly, wireless access as the other kind of the work process organization conflicts with the traditional approaches and still is not a catalyzor for principles review. Secondly, wireless solutions lose the traditional by the transmission speed and this reason is the most vulnerable and ultimate reason. The applets requirements growth and this dictates the transmission speed increase. So, nowadays corporate clients demand the 100 Mb/sec connections. Premium class business centers not only in the capitals connect via 10 Mb/sec minimum. Wire technologies allow connecting with the 1 Gb speed. Wireless solutions do not drive such speeds. And this race can last forever.
Thirdly, despite the WBA development still the certified separate standards do not exist. So the WiMAX technology epoch without “pre” just begins. The delay in the new equipment appearance will influence the movement rates of the corporate sector on the wireless broadband technologies. So, by the Intel data, the WiMAX support will be realized on the laptops only this year and by the 2008 year end the half of the sold laptops will work in WiMAX networks without extra hardware.
The topic of the certified equipment is one out of the most sensitive for enterprises which should obtain the ability to choose the equipment of those producers which fits the corporate standards (as for large enterprises) or can be replaced by the analogs and/or expensive/cheap models. There is nothing that is why during the first years wireless broadband access plays role only of the niche solution.
“Does the abroad will help us”?
As usually, the tendencies come from the West. What does happen there? It turns out that analytics’ opinions used to be corrected by month to month. But nothing came true. Neither in the USA/Europe nor in Russia.
|Northern Sky Research||IKS-Consulting||Semico Research Corp.||Jupiter Research||Maravedis Inc. (research upon Russian market)|
|2005||WiMAX market returns 21,6 MUSD||WiMAX equipment market returns 27 MUSD|
|2006||WiMAX market growth 60% or 80% MUSD||WiMAX equipment market returns 597 MUSD||WiMAX equipment market returns 45-50 MUSD|
|2007||1,5 million subscribers|
|2008||4 million subscribers|
|2010||12,5 million subscribers||WiMAX market returns 3,3 BUSD||WiMAX equipment market returns 365 MUSD. 867 thousand subscribers.|
|2011||WiMAX equipment market returns 1,4 BUSD|
Northern Sky Research (research was published in July, 2005)
2007 — more than 1,5 MUSD WiMAX technology subscribers;
2008 — real boom. The number of subscribers will raise twice the previous rate and will become 4 million;
2010 — the total quantity of subscribers of wireless broadband access (WBA) will reach the point of 12,5 million subscribers.
IKS-Consulting (2006, the first half results and forecasts up to 2010; research was published in August, 2006)
IKS-Consulting analytics expect that in 2006 the market of the wireless broadband access market will continue to growth on the level that higher than 60%, and till the end of the year will be close to 80 MUSD. The share of the wireless broadband access on the internet market will grow up to 1% totally and will be close to 6%. In 2007-2008 further growth of the WBA share is forecasted.
Semico Research Corp (research was published in October, 2006)
According to the marketing research of the Semico Research Corp. the WiMAX market returns could increase on 21,6 MUSD in 2005 up to 3,3 BUSD till 2010. it means that such numbers are strange for economics and the common fields are glad when have 3-8% per year.
Jupiter Research (research published in May, 2006)
2006 — WiMAX equipment market returns 597 MUSD;
2011 — WiMAX equipment market returns 1,4 BUSD
And the last forecast...
Maravedis Inc. (Artur Mironenko and Adlane Fellaha report)
2005 — WiMAX equipment market returns 27 MUSD;
2006 — WiMAX equipment market returns 45-50 MUSD;
2010 — WiMAX equipment market returns 365 MUSD. 867 thousand subscribers.
The conclusion is not so consolatory. Taking into account the methods of the WBA development trends we notice, that no one report of the famous international research companies doesn’t have anything common with the real situation. Why? This question is still opened.
The one out of the overall conclusion which is mentioned in the several researches is that the WiMAX and the other wireless broadband solutions deployment will be possible after the test operations in corporate sector. At the same time the corporate sector all over the world shows the lowest indexes of this field development.
The one conclusion of Russian analytics: WiMAX is from the beginning the retail technology which solves on the first stage of its development the last mile problem in the zones that are difficult of access for the optic channels. That is why the approach to the dynamics analysis such as “the corporate sector firstly, and by the technology cheapening — end users” — on the practice is not correct at all.
By the words of Tamara Sudakova, ComNews Research, “in Russia the wireless broadband internet carriers serve more than 2 million subscribers”. That is the all technologies. In closer view to the real business the all looks not so rosy. Along with the field researches which are carried out by Russian analytical groups the trends analysis of the wireless broadband solutions development the companies also do the same and realize the wireless solutions.
The one of the first telecom-companies that comes seriously to the wireless business planning is Golden Telecom. The Company on the wave of the mass увлечение of the wireless solutions carried out the research and by current days made the wireless part the one of the core in the development strategy. The company built the network of more than 7,5 thousand wireless spots in Moscow. But Golden Telecom bets on Wi-Fi technology which has the number of limits. And first of all — the radius of the broadcasting station activity, and also the broadcasting characteristics — the signal stretches only on the several tens meters and the every obstacle stops the signal. “Nowadays for the enterprises Wi-Fi can be actual only because of the circumstances: in the buildings where the spots are it is very hard to realize traditional networks. That is why the only way is the wireless”, — tells “Eldar Murtazin, Mobile Research Group analyst. However the corporate Wi-Fi users over the all Russia are not more than 50 thousand”.
Golden Wi-Fi has the perspectives. The scale and its architecture make the solution the most modern among the analogs. Golden Telecom Wi-Fi network is the biggest in the world and covers the biggest part of Moscow. At the same time Golden Telecom experience shows that Wi-Fi technology that not so long ago used to be the solution for the internal corporate networks forms the internet access retail market. And the biggest part of the subscribers is the common users.
The second wireless broadband solution is based on the WiMAX technology. The WiMAX networks services use for the “last mile” building in the little-sized offices and this segment is also closer to retail as the Wi-Fi than to corporate standards: for the small offices the price is more important than the quality. Solution realized by Sinterra Company is not the only but by the investments volume the Company leads that allows researching it as an example. But since the beginning less than 2 thousand corporate subscribers have been connected using the rather aggressive commercial policy.
The causes of the low dynamics of the technology development in the corporate sector are the same — WiMAX has the number of the limits. Capital network users complain that the signal is not stable and companies to provide the best signal have to place the base station on the window glass. Such a solution is suitable for the little-sized business because it helps to cut the expenses on the traditional services. These companies are the key audience of the wireless technology because of the connection operativeness, mobility in the case of the moving to another office, investments absence in the network building and the independence of the leasing holders and local telecom-monopolists.
However it is scarcely can be named as corporate solution. The serious business is not ready to consume these services. Dmitry Malov, “Corbina Telecom” Vice-President proves it concerning that WIMAX carriers can count on the own market segment. “Even in Moscow there are many industrial zones where it is profitless to lay the cable. This is a WiMAX niche, — explains he. — And the high price will not frighten away those companies that really need Internet access”. “WiMAX is for those who doesn’t have the alternative”, — agrees Alexander Shcherbakov, “Comcor TV” (“Acado” trade mark) representative
Customers have the own opinion
Analytical Department specialized on the corporate sector cooperation of Gars Telecom Company in the beginning of 2007 carried out research of the Russian companies’ readiness to move on wireless broadband access solution. The questionnaire was offered corporate clients. The answers showed the companies’ attitude to the wireless telecom-solutions moving. Within the bounds of the research Gars Telecom analytics determined the factors which have prevented the companies’ move on the wireless broadband technologies. Among them are the security limits (the risk to lose the data, unauthorized access); the high price of the service (economical factor); the reliability (signal interruption); the absence of the common and certified standard; the juridical limits; the law data transmission speed; the lack of the suitable equipment; the absence of the wireless solution demand, and also the lack of information upon the technology, its abilities and products.
Notable, that the Gars Telecom conclusions are in line with the InStat researches company analytical report (October-November 2006). So among the factors that prevent the WBA development InStat analytics noted:
- The uncertainties а the regulatory base and the accessibility of the frequency coverage;
- Scarcely the majority of the 3G carriers will use WiMAX;
- Information security: the WBA equipment that provides the access to the company corporate network and also the mobile devises used for the wireless connection demand the corporations to use different security mechanisms to protect the operations and assets.
“While the establishment process WiMAX is facing a lot of obstacles, the first is the competitive technologies on the market, — concerns Darrell Scholar, InStat analytic, — WiMAX should be the super service to conquer the customer. And now the early WiMAX success is possible in the third world countries”. “If we wan WiMAX technology to work successfully in the private meeting and back rooms, companies should activate different security mechanisms”, — tells Victoria Fodale, InStat analytic, — The only solution in this case will be the development of the data protection systems while transmission or storage on the portable devices, which should be equipped by the centralized software platform with the data encrypting applets“.
At the same time, by the opinion of Stanislav Rybalko, the Head of the wireless technologies department in CompTek, “Nowadays, it is the crucial point on the wireless broadband market. From the niche stage market threaten to become the mass owing to the standardization and cheapening. On the one hand, the all large equipment producers endeavor this market, on the other — current carriers are actively bought, merge and united in the one company. Within the bounds of the one company it won’t be such a variety and one or two vendors. And now we can observe that the equipment producers’ quantity is over the customers’ quantity”. In point of fact, many analytics expects that the real perspectives of WiMAX will determine the next year. It can be explained by the large carriers enter on this market segment such as American Sprint Nextel, South Korea KT and Telecom and the Japanese KDDI.
In Russia the only wireless broadband access which is step by step conquer the corporate market known as the wireless access based on the CDMA/Ev-DO. This technology is developed by the Sky Link Company, which is positioning this solution providing the 2,4 Mb/sec (comparable with the leased line) in the corporate sector. And Gars Telecom, which carried out the research, moved forward and realized the straight connection of its own network and the host operator (Sky Link) of the service, rendering the clients the secured wireless access into the corporate network.
We will see if it is possible for two companies to overcome the Russian companies’ stagnation. The next year results of the telecommunication market which traditionally Economic Strategies magazine will carry out definitely let us see it.