For Motorola, WiMAX & Promise Of A Comeback

Motorola (MOT), once the dominant player in the world of mobility, has been going through a rough patch. No longer the leader in handsets, nor a prominent player in the global infrastructure sweepstakes, Motorola has become a middle-of-the-road player in the business it practically invented.
The Schaumberg, Ill.-based company is, however, betting big on WiMAX and the IP-based wireless broadband business to revive its fortunes. Motorola recently showed off its technical mettle at WiMAX World, held in its backyard of Chicago.
Motorola demoed a mobile WiMAX network capable of delivering broadband speeds that could handle multimedia traffic with relative ease. The demo network is a microcosm of Xohm, Sprint’s 4G wireless broadband network.

“This live demonstration provided just a glimpse of what WiMAX technology can deliver,” said Barry West, Sprint Nextel (S) CTO and president of its Xohm business unit. “We are on schedule to begin Xohm pre-commercial service in Chicago by the end of 2007, with commercial service planned in that and other markets beginning April 2008.”

motorolacto2.gif I recently caught up with Motorola’s chief technology officer, Padamsree Warrior, to discuss WiMAX and its impact on broadband in general — and Motorola in particular.

Om: It seems Motorola is betting very big on WiMAX and feeling pretty bullish about the technology?
Padamsree Warrior: WiMAX is no longer a big bet; it is a big business. We have 40 trials in progress. The reason we’re excited about WiMAX is because I think it is a disruptor. Never before has there been a wireless technology that has been deployed globally at the same time, be it developed or emerging economies. It is very affordable and as a result, you can now connect rural areas and metro areas. Furthermore, it is complimentary with existing technologies.
Om: Why do you see it as a disruptor?
PW: We think it is the next big step in wireless broadband, mostly because it is more data-focused and is a flat, IP-based technology. Cellular technologies were designed to offer voice services, and had data overlays. That is why 3G — despite all the progress — is still pretty inefficient when it comes to data.
WiMAX, on the other hand, has a pretty flat, IP-based architecture. The base stations don’t have to be huge, which means the real estate needed to house those base stations are quite modest. That is why they are called zero-footprint base stations. At the same time, Intel (INTC) is driving the chips’ costs lower. There are spectral efficiencies that allow you to drive more capacity. That lowers the cost on both the op-ex and cap-ex side.
Om: So from that standpoint, it makes sense for the emerging economies where WiMAX completely bypasses the need for copper-based infrastructure?
PW: Exactly. For instance in Pakistan, Wateen, one of the private telecom companies, set up a WiMAX network across the country in less than a year and is offering wireless broadband in nine cities. There are countries that are at a 2G level right now, and the operators there who haven’t invested in 3G spectrum are simply leap-frogging to WiMAX.
Om: But what about the developed world? Countries where people spend big dollars on wireless services, say, the U.S., or countries in Europe?
PW: If you look at Sprint [see video at the end of the post], I think what they are doing is something radical. Sprint is talking about unfettered access to their network. That is pretty disruptive. Similarly in the Netherlands, one of the highest broadband-penetration countries, people are looking for more connectivity on the go. There is a company called WorldMAX that is going to offer a wholesale service, and I think interesting business models are going to come out of it. Because of the cost structure, it isn’t difficult to imagine devices like digital cameras being connected to WiMAX networks in the future.
Om: Can you give us some insight into the kind of devices that are going to be connected to the WiMAX network? Do you think the handsets of today will just have WiMAX radios built into them, and we can seamlessly roam between 2G, 3G and WiMAX networks?
PW: We will have our mobile Internet device by the end of 2008, and it will have multimode capabilities and will roam between GSM or CDMA networks. I think initially it will be single-mode devices, and eventually become part of the multimode devices, including mobile phones. But I think the real role is using that bandwidth for Internet browsing and other such activities.