An SIM Free Option for LTE Should Exist

In terms of general market perception, LTE has been stealing much of WiMAX's thunder of late. Now obviously we've seen the ascendance of LTE coinciding with one of the periodic nadirs of enthusiasm around WiMAX, and we should start to see the balance redress somewhat when Xohm launches and other smaller deployments also start to come online of the next 4 months.

My current expectation is that by 2012/2013, we will see LTE user numbers for mobile broadband approach or even exceed those for Mobile WiMAX. And both sets of figures will be dwarfed by HSPA and HSPA+ figures.

But I can't help thinking that 3GPP risks leaving a certain amount of money (and usage) on the table for WiMAX. In particular, temporary, session-based access.

There are two ways to buy communications services - through an account (postpaid or prepaid) as seen with most of today's mobile and fixed services. Or on a one-off basis, as seen with WiFi hotspots, hotel broadband & TV, Internet cafes, pay-per-use web conferencing, even payphones of the past. In this circumstance, the customer uses a local service provider to fulfill a particular need.

Accounts make most sense when linked to a particular identity - especially a phone number. This means it is in the user's interest to establish a long-term relationship with a service provider.

Taken as a % of the overall telecoms market, the one-off payment proportion is tiny compared to subscriptions or SIM-based prepay mobile. But as a proportion of wireless/"on-the-move" data, it is rather higher.

The problem with offering one-off payments for mobile data in 3GPP technologies is the need for a SIM - or a roaming relationship with a home "account" supplier's SIM, who will probably charge a healthy (or often unhealthy) premium.

WiMAX (like WiFi, and indeed CDMA EVDO) does not require a physical token like a SIM card. You could flip open a laptop and (assuming it supports the right frequency bands), choose a temporary provider on an ad-hoc basis.

Besides the roaming approach, the only way I can think to do this with a SIM-less 3GPP device would be to have some sort of software-type SIM, or use a secondary SIM-based device such as a phone as an authentication token. Neither are particularly ideal solutions in my view.

Now, I don't think that this is the "killer application" for WiMAX which will defend it against the onslaught from HSPA and LTE. But it is a gap in the market for mobile connectivity services that is currently served poorly by the current cellular approach.

 

Disclosure: None

Comments

[fatcat:]

Great article...having more options would bring down prices,indeed...

2008 Sep 08 07:03 AM

[vitaminc:]

Not sure the comparison of one-off transactions between WiMax/LTE and Wifi is valid. Most of those WiFi hotspot charges a ridiculous amount for one-off accesses (at least in US) and actually made using post-paid mobile data much more attractive. Hell even AT&T, T-Mobile USA and Sprint offers one-off hotspot free as an promotion to their DSL and 2.75G/3G+ wireless data plan packages.

2008 Sep 08 08:02 PM