UQC’s WiMAX 2 upgrade opens up new possibilities

By Tony Brown

Having lived the first half of my adult life in the UK and the second half in Australia, it is little wonder that I have such a strong affinity with the underdog in a given situation, since both countries have cultures that root for the little guy to succeed over a bigger, stronger opponent.

It is hard not to carry this attitude across into my working life, and there has been no better example of this in recent years than my writing about the Asia Pacific mobile broadband market, in which I have covered the gradual decline of Intel-backed WiMAX technology and the inexorable rise of LTE.

Of course, I have nothing against LTE as such; it is just that it has been really fun over the last couple of years to watch the WiMAX guys land the odd counterpunch and give themselves a bit of hope that they might just stave off Armageddon after all.

That’s Tokyo calling
If you are looking for a regional WiMAX champion, you don’t need to look much farther than KDDI-backed Japanese operator UQ Communications, which launched in July 2009 and within two years had more than 1 million subscriptions, and which expects to have 2 million by end-March.

Of course, even having reached the magic seven-figure subscription count, UQC remains a relatively small fish in the Japanese pond and a long way behind the big three operators – NTT DoCoMo, KDDI and Softbank – in the mobile broadband market. It even trails smaller player eMobile.

Nonetheless, UQC is not only offering faster downlink speeds than those offered by DoCoMo’s nascent LTE-based Xi service – which launched in December – but is setting its sights on launching 802.16m next-generation WiMAX 2 services in 2013.

UQC staged its first public WiMAX 2 trials in Tokyo July 6, demonstrating downlink speeds of 150Mbps. The firm says the launch of the next-generation technology will enable it to compete head-on with the market’s fixed-broadband providers.

What’s more, UQC’s management says WiMAX 2 will ultimately be able to provide theoretical downlink speeds of 330Mbps, comfortably matching the downlink speeds being offered by fixed-broadband providers – even over FTTH services.

UQC’s management says that when the firm upgrades to WiMAX 2 services in 2013, it will offer downlink speeds of up to 165Mbps, which will enable subscribers to download a full-length HD movie in just six minutes.

What does this mean?
There is little doubt that UQC’s heavy emphasis on the speeds available via WiMAX 2 is an effort to pave the way for a more serious assault on the market as a fixed-broadband replacement rather than acting as primarily a mobile broadband service.

The reasoning behind this move is clear: Japan’s mobile broadband market is already saturated, and the established mobile operators are already getting into position to go to the next level as they launch LTE services. Market leader NTT DoCoMo launched LTE services in December.

DoCoMo’s LTE services are available to less than 10% of the population but are set to be available to about 70% by 2014, offering downlink speeds of about 100Mbps.

Since UQC is not in a position to compete on a level playing field with the established big three operators in the mobile market – principally because it can’t offer the same range of handsets as the mobile players – it makes sense for the firm to target as wide a market as possible and try and make inroads into the fixed-broadband sector.

This ties in nicely with the fact that KDDI – even after acquiring a stake in leading cable MSO Jupiter Telecommunications – has only a limited fixed-broadband footprint compared with NTT East and NTT West, which on a combined basis have a nationwide fixed-broadband presence via xDSL and FTTx.

In addition, UQC’s management says the fixed-broadband market remains a relatively soft target, because fixed-broadband prices remain high and because IPTV services have yet to seriously take off on the country’s fixed-broadband networks, largely because of the strong free-to-air market.

UQC says many local fixed-broadband subscribers are far less attached to their services than in other countries in the region and are liable to defect to UQC’s high-speed mobile broadband services if they are of sufficient quality.

The Wi-Fi factor
UQC says subscribers are demonstrating an increasing demand for mobile broadband services, citing as evidence the moves by fixed-broadband providers such as NTT East and NTT West to provide widespread Wi-Fi coverage in urban areas.

As part of its Wi-Fi expansion strategy, NTT East has struck a deal with major local retailer Seven & I Holdings to deploy Wi-Fi hot spots in 1,300 of the firm’s stores by March and eventually expand to 8,700 outlets in eastern Japan. Sister firm NTT West is deploying hot spots in more than 5,000 Seven & I Holdings outlets in western Japan.

NTT East and NTT West say their huge fixed-line infrastructure will enable them to provide far better wireless-broadband connectivity via Wi-Fi than any of their rivals.

NTT East – the leading fixed-broadband player in the market – has already sold 90,000 Hikari Portable Wi-Fi modems, which give broadband subscribers access to its Wi-Fi network, taken principally by users of iPads and other tablets.

Second-ranked mobile operator KDDI is also deploying an aggressive Wi-Fi network rollout. The firm has already opened 10,000 hot spots and plans to open 90,000 more by March 2013.

This strong trend toward providing high-quality mobile broadband connectivity is clearly a positive one for UQC, given that the firm is able to provide a high-quality mobile broadband experience in comparison with the other mobile broadband operators in the market.

UQC, which has already deployed 5,000 Wi-Fi access points nationwide, might well be able to use the higher quality of its mobile broadband services to persuade a sizable – though still relatively small in terms of the overall market – number of fixed-broadband subscribers to switch from FTTx and xDSL services to its own offerings.

That really would give the WiMAX guys something to finally smile about. After all, everyone loves an underdog, don’t they?