The Hindu Business Line : Head start for HSPA

The year 2007 is the time when the race for mobile broadband begins in right earnest. The two competing technologies - HSPA (part of the 3G, third generation mobile family) and mobile WiMAX - will be slugging it out initially for the mind share and later, the market share of consumers across the globe.

HSPA (the acronym for High Speed Packet Access) is a relatively more mature technology, with greater technology investments and infrastructure already made by players in Europe in recent years. Said to be a software upgrade to existing 3G networks, HSPA is likely to boost data speeds across networks. It has offered a significant head start to the aspiration of European players in their mobile broadband contest with WiMAX.

In contrast, mobile WiMAX (Worldwide Interoperability for Microwave Access), the new technology kid on the block, has been getting a disproportionate share of media attention in recent times. Touted as the stepping-stone to 4G or fourth generation wireless services, it is said to have the potential to shake up the otherwise well-entrenched market for 3G services in the years to come.

At the starting point of this race for mobile broadband (for high speed Internet access or high bandwidth video applications), how do these two technologies stack up on techno-economic parameters? Poring through a set of research reports on this subject shows that on at least three key aspects, HSPA comfortably scores over WiMAX in the medium term. These are:

Economies of scale: The momentum is clearly behind HSPA as compared to WiMAX. There are 94 commercial deployments (across 51 countries) that use this technology today, according to the Arthur D. Little February report titled "HSPA and Mobile WiMAX for Mobile Broadband Access."

This is likely to give operators significant economies of scale in operations, apart from access to a range of mobile handsets and user devices such as notebooks, PCs and PDAs. The GSM Association has also projected that by January this year, 140 mobile operators in 64 countries have committed investments in HSPA technology. This is likely to help the ecosystem develop at a brisk pace.

Based on a combination of variables, Deutsche Bank in a report titled "At the starting line - The race to mobile broadband" has projected that the terminal market (including handsets) will reach 450 million for HSPA as compared to 29 million for WiMAX by 2010.

Unlike HSPA, the large-scale deployments of WiMAX are at least a couple of years away. Unless these deployments happen, WiMAX will take time to catch up with its peer.

Capital expenditure: Since WiMAX cells are said to be significantly smaller, it will require more number of base stations and sites to cover the same geography, states the Arthur D Little report.

This is bound to have a far-reaching impact on the operator's capex and operating expenditure. As a niche opportunity, WiMAX will continue to be favoured in hot spots, fixed broadband alternatives to DSL and places where access to spectrum is not available easily in the licensed bands. Across the emerging markets, both scale of economies and capex will be crucial variables in decision-making by operators in a toss-up between HSPA and WiMAX.

Interoperability: The biggest strength in the evolution of HSPA is that it has been developed from the earlier GSM technology into Wide band CDMA, which, with software upgrade, will offer broadband capability on HSPA.

Since companies have already made significant investments in 3G, it is likely that they will explore choices that leverage and complement their existing network rather than consider new technologies. Since technology standards for 3G (including HSPA) have been clearly defined, the entire 3G ecosystem is likely to work to their advantage.

In the long run, however, 4G, as it evolves from WiMAX with its better spectral efficiency and higher data speeds, may be able to score over 3G LTE (Long Term Evolution from HSPA), if the standards for 4G emerge faster and WiMAX establishes its technical performance in the marketplace over the next couple of years.

maverick@thehindu.co.in

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