Unwired to deploy national mobile WiMAX by 2010

Competition from 3G will squeeze ROI.

Australia's 20 biggest cities could be covered by a $500 million commercial-grade mobile WiMAX network within two years.

The network will be modeled on the Sprint Nextel WiMAX initiative in the US, in which Xohm, Intel, Samsung, and Nokia Siemens will deploy mobile Internet access to some 100 million people by year's end at a cost of $5 billion over three years.

Intel global general manager of WiMAX business development, Joe Nardone, told Computerworld that Unwired has mapped out plans for a national mobile WiMAX network, including cost estimates, technology roadmaps and potential customers and partners. Intel is an investor in Unwired.

Unwired's current wireless technology does not allow it to deliver mobile access -- in other words, users cannot sit in a moving train or car and receive a constant signal. However, this will change when it migrates over to WiMAX, where mobility is inherent in the technology.

The WiMAX network will help the Seven Network's plan to reinvent itself as a digital company by providing a medium for the delivery of broadband, Voice over Internet Protocol (VoIP) and television. Seven purchased Unwired outright for $127 million last year.

Seven could provide funds for the required network infrastructure in a deal that Nardone describes as a "leap of faith".

Telecommunications analyst Paul Budde said the Seven Network's plan to become a "digital company" through its engin, Unwired and TiVO businesses, will result in a failed overbuild of technology.

"I have looked at this from 15,000 angles and the idea simply can't work," Budde said.

"Both engin and Unwired are in trouble and are under performing, so if [Seven] can bring these together they deserve a Nobel Prize for innovation."

The mobile WiMAX network will not be able to compete with Telstra's established 3G network, according to Budde.

He said Telstra's established customer base will have no reason to migrate to the six-year old technology which Budde believes is inferior to 3G's High-Speed Downlink Packet Access (HSDPA), platform.

Unwired will have a tough time recouping ROI as competition from Optus and Vodafone's 3G networks drives down access prices, Budde said.

Unwired refused to comment for the story.

(Matt Hamblen contributed to this report.)

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