Case Study:
Data communications technology is one of the fastest changing technologies, if not the fastest changing, in all of IT. Substantial portions of the knowledge you gain from this chapter will be obsolete within the first 5 years of your career. Unfortunately, we do not know which portions that will be. Consider the example of WAN wireless technology. Three protocol standards are in competition: EVDO, HSDPA, and WiMax. Because WiMax has the greatest potential performance, we will consider it further in this case. Craig McCaw built one of the world’s first cellular networks in the early 1980s and brought cell phones to the masses. In the 1990s, he sold his company to AT&T for $11.5 billion. In 2003, McCaw started a new venture, Clear wire, by buying rights to technology based on WiMax to address what is called the “problem of the last mile.” Will WiMax defeat the other WAN wireless technologies? We do not know. But, when someone with McCaw’s knowledge, experience, and wealth starts a new venture based on that new technology, we should pay attention. To begin, what is the problem of the last mile? The bottleneck on data communications into homes, and into smaller businesses, is the last mile. Fast optical fiber transmission lines lie in the street in front of your apartment or office; the problem is getting that capacity into the building and to your computer or TV. Digging up the street and backyard of every residence and small business to install optical fiber is not an affordable proposition. Even if that could be done, such infrastructure cannot be used by mobile devices. You cannot watch a downloaded movie on a commuter train using an optical fiber line. The WiMax standard, IEEE 802.16, could be implemented by many companies, but only if those companies own wireless frequencies for data transmission. Hence the interest by people like McCaw and other cellular players such as Sprint. The WiMax standard includes two usage models: fixed and mobile. The former is akin to LAN wireless in existence today; mobile access allows users to move around, as they do with cell phones, staying connected. On December 1, 2008, Clear wire merged with Sprint Nextel and received a $3.2 billion outside investment. In the process, Clear wire gained access to Sprint Nextel’s spectrum holdings (authority to use certain frequencies for cellular signals). The merged company is called Clear wire and the products are marketed as Sprint Xohm. Clear wire already provides fixed use in many cities. As of June 2010, mobile WiMax services were available only in selected cities, but roll out to many more cities is planned in the near future.
Q1. Read the “Thinking Exponentially” Guide. Keeping the principles of that guide in mind, list five possible commercial applications for mobile WiMax. Consider applications that necessitate mobility.
Q2. Evaluate each of the possible applications in your answer to question 1. Select the three most promising applications and justify your selection.
Q3. Clear wire went public in March 2007 at an initial price of $27.25. As of April 2010, the price was $8.00. Go online and research the company to find out what happened to its share price. Explain why its share price has dropped.
Q4. AT&T and T-Mobile have endorsed HSDPA, but it does not have the same potential maximum transmission rates. Rather than jump on the WiMax bandwagon, those companies plan to deploy a different technology called Long Term Evolution (LTE). Search the Web for LTE versus WiMax comparisons and compare and contrast these two technologies.
Q5. Where will this end? On which of these technologies would you be willing to invest $100 million? Why?
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.