Despite predictions of its decline, WiMAX continues to attract interest especially in the United States, after equipment vendor Alvarion teamed up with ISP Open Range Communications to build a WiMAX network that could reach up to 6 million people.
Under the terms of the $100 million (£61 million) deal signed this week, Alvarion will provide radio access equipment, customer devices and systems integration for a new network being built by Open Range and partially funded by the Rural Utilities Service, the federal government agency in charge of building out key infrastructure in rural parts of the United States.
Earlier this year US operator Sprint said that it planned to deploy its WiMax services to 10 major US cities in 2009. Last year Sprint Nextel and Clearwire formed a joint venture worth $14.5 billion to deploy the first nationwide mobile WiMax network.
When completed, the Open Range network is expected to span 17 states and 546 rural communities, making it one of the largest WiMAX deployments in the United States.
Open Range is planning to light up the network and offer services in certain areas for it sometime in the fourth quarter. The company estimates that the entire network will take roughly five years to complete.
Open Range began making concrete plans for deploying its network this past January, when it secured $374 million to build out the network. The company received $100 million from One Equity Partners, the private equity arm of JP Morgan Chase, and also received a $267 million loan from the Rural Utilities Service. The company's wireless network will cover rural parts of Western states California, Colorado and Nevada; Midwestern states Wisconsin, Illinois, Indiana, Ohio and Nebraska; Southern states Arkansas, Alabama, Florida, Georgia and South Carolina; and eastern states Pennsylvania, New York, New Jersey and Delaware.
WiMAX technology is often touted as a good way to provide wireless broadband services to consumers and businesses living in rural areas. Typically, major telcos have said they can't build broadband networks in rural parts of the United States because the economics just aren't feasible; in other words, states such as Idaho and Montana have too much space and are too sparsely populated to justify a massive investment in rural wireline broadband networks.
WiMAX, on the other hand, is a better fit for these markets because the cost to deploy and maintain a wireless broadband network in rural areas is vastly less than the cost of maintaining a wireline network.
Based on original report by Brad Reed, Network World (US)
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