4G: Here It Comes, Ready or Not — Part II

Certainly it’s a breakthrough, and a hopeful sign of things to come. Subscribers are experiencing download speeds from 2 to 4 megabits per second (Mbps) with seamless hand-off between cells when moving at speed.

But as we saw in the first of this multi-part series on 4G and its impact on the enterprise, Xohm is not, strictly speaking, 4G.

Many use the term loosely to include today’s WiMAX, but as analyst Phillip Redman, a research vice president at Gartner, points out, the International Telecom Union (ITU), a United Nations agency, will define 4G, as it did 3G. And it hasn’t done that yet.

The ITU’s standards-setting process has barely begun. However, it has set objectives. They include delivering orders of magnitude more bandwidth than current-generation WiMAX. So in that respect alone, Xohm is clearly not 4G, Redman argues.

The Institute of Electrical and Electronics Engineers (IEEE), the standards body behind the current WiMAX technology that Xohm uses, 802.16e, is developing a next-generation standard that will meet the ITU objectives.

But as we also saw last time, most observers are picking LTE (Long Term Evolution), a technology being developed by the 3rd Generation Partnership Project (3GPP), as the dominant 4G technology, at least in the developed world, at least among established mobile operators.

So Sprint, by adopting WiMAX, is definitely going against the 4G current.

Xohm is also not a fully mature 4G service in one other important respect. Although subscribers are free to use voice over Internet (VoIP) services such as Skype when connected to the network—something 3G operators often block – there is no conventional voice component to Xohm.

It’s a data-only service, and intended as such. At least for now. In fact, Sprint and Clearwire are targeting the residential fixed broadband Internet access market as much as the mobile data market.

All this being said, the fact remains that Xohm is out there now—a good two years ahead of the first expected LTE deployments. It’s fast, it’s mobile. And it’s a serious play. The two main partners, as well as others, including Intel, have invested billions.

If nothing else, Xohm’s progress should offer useful insights into how 4G might play out in the longer term, and how it could impact users.

But it’s still early days. Baltimore was the only Xohm market officially up and running at the time of writing, and even it is not entirely covered.

As of late October, only 180 of an eventual 370 cell sites had been built—although Sprint vice president of broadband Bin Shen says the company is “expanding pretty rapidly.” Eventually the network will cover 70% of the Baltimore population, or about 1.4 million.

How will the build-out proceed after Baltimore? On the big picture, Shen will say that the company hopes to have 60 to 80 million in population covered by the end of 2009, 140 million by the end of 2010 and 200 million by the end of 2012.

Chicago and D.C. have been tagged as the markets it will launch next. It already has 500 cell sites in place in Chicago, Shen says. “We’ll be in position to launch very soon. It’s just a matter of making sure we can deliver great performance and have sufficient coverage.”

It is the performance of the Xohm network so far that has people excited. According to Shen, subscribers are experiencing download speeds of 2 to 4 Mbps on average, with bursts to 10 Mbps, and upload speeds of 500 Kbps to 1 Mbps. Independent testers corroborate this.

More importantly, they’re experiencing that kind of network throughput in moving vehicles. It may not be 4G speeds by the ITU definition, but it’s fast enough to view flawless near-broadcast quality streaming video in a moving vehicle, as Xohm and independent testers have demonstrated.

A couple of interesting features of the fledgling service give hope for the 4G future, even if WiMAX 16e can’t offer the 100-Mbps speeds expected with true 4G technologies.

One is that subscribers have an option to pay $50 a month for access – apparently unlimited: the Xohm Web site mentions no download caps – both at home (with the purchase of an $80 modem) and on the go. And that fee is guaranteed not to go up as long as they keep the service.

Will this set the pricing bar for data-over-4G? If so, the future looks bright indeed.

Such low pricing is possible in part because of the spectral and other efficiencies of WiMAX 16e networks. And those efficiencies should carry through to true 4G networks, which are expected to use a lot of the same technology as today’s WiMAX.

Still, it sounds too good to be true—which means it probably is.

Another hopeful sign is that the network is “open” in a sense that traditional mobile networks, at least in North America, are not. Anyone can access the Xohm network at any time as long as they have a compatible WiMAX device.

Yes, Xohm is pushing monthly contracts but, like Wi-Fi hotspot operators, it will also provide access for a day (for as little as $5).

The network is open as well in the sense that there are no unreasonable restrictions on how you can use it – including to make VoIP calls.

“Any Internet application should be able to work on this network,” Shen says. “Voice over IP applications such as Skype are just one of the existing Internet applications out there today. So we’re not going to shut them down or block them.”

“We’re really trying to create a data business and we want it to be open.”

This raises some interesting questions about the business models that might prevail in a 4G world. Will other operators be forced to adopt the same open network approach as Sprint? Indeed, can Sprint continue indefinitely along this path without risking damage to its core business?

“I think the carriers should move to more open networks,” says Zeus Kerravala, a senior vice president at Yankee Group. “Open-ness breeds innovation. It’s good for everyone.”

Maybe. But guaranteed not everyone will see it that way.

Because of its third-place position in the U.S. cellular market, Sprint has “nothing to lose and everything to gain” by opening up, Kerravala says. But front-runners AT&T and Verizon are much more likely to want to hang on to the tight control they have over their networks today.

Shen consistently refers to services “like Skype” when talking about VoIP over Xohm, and points out that the quality of service required and delivered on the Sprint CDMA network is much higher than subscribers using Skype over Xohm would expect or, he implies, experience.

But this ignores the fact that there are other more mainstream VoIP providers that are at least perceived to offer better quality of service than Skype—Vonage, for example. And they currently work quite well over wireline broadband connections with similar bandwidth to Xohm.

It’s true that WiMAX powered mobile handsets aren’t available yet, so users would have to use soft phones on laptops. But dual-mode handsets with, as Shen says, perhaps wishfully, “CDMA for voice and WiMAX for data,” will be available early in 2009.

Why wouldn’t subscribers use such devices to make VoIP calls over Xohm rather than more expensive cellular calls? And if they do, wouldn’t that disastrously cannibalize revenue from Sprint’s core business?

Shen also says, “We reserve the right to introduce a hybrid of mobile voice services to our customers and have a better integration with the devices and the network and the applications. So we always want to be competing in these areas and make sure customers have a choice of premium services.”

Huh? What this means, we think, is that in the short and possibly medium terms, Sprint will offer CDMA/Xohm bundles. That’s almost a given. The two networks, for the foreseeable future, will be “complementary,” Shen insists, albeit with “a little bit of overlap.”

But ultimately, if Sprint expects to transition into a true 4G world, it will have to deliver voice over some IP network, as IP voice. Because that is one of the objectives of 4G—to move to much more efficient flat IP network architectures, and VoIP for mobile voice.

Where does all this leave us?

As a 4G mobile service, Xohm lacks essential elements. And we’ll have to wait for the other foot to drop on how voice and data will mingle in the Sprint world. For now, Xohm is simply a glorified city-wide hotzone, having more in common with Wi-Fi networks than cellular.

Still, assuming Sprint can roll it out at the pace it claims it will and keep prices as low as they are now – big assumptions – Xohm could be a serious challenge for other carriers hoping to evolve in an orderly fashion to LTE-based 4G networks.

Even if it remains purely a data network, and even if it ultimately can’t support large-scale ad hoc use of VoIP by subscribers – entirely possible – it may still be able to grab market share from AT&T, Verizon and T-Mobile by offering a better mobile data solution than 3G.

That in itself is an opportunity for enterprise users—as we’ll see next time when we look at the larger question of how companies can and will use 4G.

This article was first published on SmartPhoneToday.com.