Don't Overhype WiMAX Speeds, Analyst Warns

WiMAX operators who overhype their networks' peak speeds risk angering early adopters who feel their expectations haven't been met, an analyst from Pyramid Research said Wednesday.

During a Webinar on best practices for deploying WiMAX, Pyramid Research analyst Özgür Aytar said that one of the biggest potential pitfalls for WiMAX operators is emphasizing network speed too much in their pitches to customers. Although she acknowledged that overhyping peak network speeds is a bad practice for any network operator, she said it is particularly bad for those offering new technologies such as WiMAX because early adopters could quickly grow disillusioned if they find themselves frustrated by slower-than-expected speeds.

"The factors that lead to success for all kinds of broadband deployments come when companies haven't just been the first to market but have been the best to market," said Aytar, who recently completed a study of WiMAX deployment practices that involved interviewing executives from 17 WiMAX operators worldwide. "Early adopters are likely to generate backlash against ISPs if their expectations are not being me t… a number of operators that we looked at shy away from promoting actual data speeds to avoid customer backlash."

To demonstrate how to properly market WiMAX services, Aytar used the example of Curaco-based ISP Scarlet, which she said marketed its plans simply as "basic," "fast," "faster," and "fastest" rather than emphasizing their peak data rates. Aytar said that because Scarlet isn't "promising to over-deliver on bandwidth," it has "established a balance" between its marketing goals and its ability to deliver strong services. Moises Abadi, CEO of Panamanian ISP Liberty Technologies, agreed with Aytar and said it was important for operators to "understand what WiMAX can and can't do" and to set "realistic expectations" among customers. He said the most important part of setting expectations is conducting extensive propagation studies and understanding the geographic topologies of the areas that operators wish to cover with their WiMAX services.

"The way we sell our seamless coverage here is based on what we know the system will do more often than not," he said. "We don't do any guesswork in our coverage. It has to be very well tested and studied."

Aytar said that understanding network topology was particularly important for ISPs, as many of the companies she spoke with reported encountering early problems with achieving their desire WiMAX propagation.

"Operators say network deployment hasn't been without wrinkles," she said. "Some of the operators pointed out that WiMAX speeds and ranges have fallen short of the promised scenarios…. This can negatively impact geographical and indoor coverage, which means that companies have to make higher investments for indoor base stations."

In addition to recommending that ISPs set realistic expectations for network performance, Aytar said WiMAX operators would do well not to concentrate initially on setting prices for their services below those of rival DSL companies. Rather, she said it was important for WiMAX operators to "position their services as value for money" and to emphasize WiMAX's advantages over DSL, such as its ability to deliver both fixed and mobile connectivity and its relatively quick installation time.

However, Aytar acknowledged that some WiMAX operators she spoke with had to compete with DSL providers in a price battle by offering cheaper services that offered slower data speeds than their standard services.

Despite the potential pitfalls with WiMAX deployment, however, Aytar said that the technology should enjoy strong growth over the next five years as revenues for mobile broadband services are projected to double between now and 2014. Aytar explained that the best opportunities for WiMAX vendors will come in countries where there is a low penetration of broadband and 3G mobile services, such as China, Russia, Mexico and Turkey.

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