This report analyzes the current WiMAX operations worldwide, evaluating operator business models, network economics and the overall market opportunity relative to UMTS/HSPA and LTE. The objective is to assess which technology delivers the most popular and profitable mobile voice, broadband and video services in the context of specific market conditions: case studies examine UQ Communications (in Japan), Clearwire (the US), Mobily (Saudi Arabia), Digicel (Caribbean), Tata (India), Umniah (Jordan) and Yota (Russia).

Key findings include:

- The number of WiMAX deployments – currently more than 500 across 145 countries – is greater than that of any conventional 3G technology and more than 50% greater than the number of HSPA network commitments. However, most WiMAX deployments to date have been small, serving targeted communities, businesses and private institutions. As a result, WiMAX covers only 6% of the world’s population, which is far behind the 85-90% that conventional mobile networks cover. We do expect WiMAX coverage to increase, although rather slowly on a global basis, with 10-12% population coverage by year-end 2010. Many of the larger WiMAX deployments are still underway, and many large countries such as India, Indonesia and Vietnam are just beginning to issue WiMAX licenses. Some of the largest WiMAX operators in the world in terms of coverage will be Clearwire (US), UQ Communications (Japan), Globe Telecom (Philippines), Yota (Russia) and Safaricom (Kenya).

- More than 80% of all WiMAX deployments are fixed networks that use 802.16d, a standard that leading vendors such as Alvarion and Huawei no longer ship. Going forward, we expect all WiMAX operators to use 802.16e equipment even if regulatory bodies restrict them from offering mobile services. The first available WiMAX devices were PC cards and USB dongles, followed by laptops with embedded modems, leaving operators no choice but to first go after mobile broadband customers. Those markets with the lowest broadband penetration rates represent the most upside, and we estimate that roughly 70% of WiMAX deployments are in emerging markets, led by the Africa and Middle East region with more than a quarter of global deployments.

- Factors driving operators to deploy WiMAX are speed to market, surgical network deployment opportunities, mobility, multiple-use scenarios, its IP architecture, and the cost of spectrum and deployment. WiMAX operators in competitive markets look to differentiate themselves from existing fixed and mobile broadband options by promoting a combination of the following benefits: portability, mobility, flexible pricing plans offered without contracts, enhanced applications, simplicity of service activation, service quality and security, superior customer care and higher throughput. Mobile virtual network operators (MVNOs) will be an instrumental piece of many WiMAX operators’ business models.

- On average, WiMAX pricing tends to be more expensive than DSL pricing, but the difference has already begun to diminish, and the two will blend further by 2014. In contrast, prices for WiMAX-based broadband service are generally US$15-25 lower than for conventional 3G (UMTS/HSPA, EVDO) service at similar download speeds. In general, WiMAX operators target different markets than other 3G players, which boast a substantially larger addressable market of voice customers.

- If an MNO is concerned about the service quality of its core services due to an overloaded network, a straight 3G upgrade is more suitable than adding WiMAX as a parallel data network, because mobile voice customers represent a larger target opportunity than fixed broadband customers. Mobile voice is still the most important driver of revenue for mobile operators worldwide, comprising 75% of total global service revenue.

- Certain emerging market operators would benefit from bypassing 3G in favor of moving to LTE in a few years. But this decision depends on spectrum resources, the competitive landscape and the need for better spectral efficiency, which is impacted by voice and data traffic levels.

- Increasing volumes of WiMAX customer premise equipment (CPE) shipments and improvements in production are reducing device costs and increasing affordability. Just a few years ago, the CPE cost was more than $300, but these days it is reportedly less than half of that amount – about $50-150. In the Cayman Islands, Malaysia and the US, for example, WiMAX operators offer WiMAX CPEs for $60-100 with minimal subsidization.

- WiMAX is a better technology for providing broadband access than HSPA and boasts higher spectral efficiency, a lower cost per bit, as well as lower costs for spectrum and intellectual property rights (IPR). Despite HSPA’s greater scale, WiMAX USB dongles are priced competitively and even less expensive in some cases compared with other 3G USB dongles. WiMAX benefits from having a more centralized ecosystem in which interoperability does not have to take place on an operator-to-operator basis as it does with HSPA. Despite these positives for WiMAX, scale, coverage, roaming potential and the device ecosystem, not performance, determine the popularity of mobile broadband access technologies.

When design pilot projects fail, it endangers everyone’s willingness to adopt design methods. Over the course of doing hundreds of design projects and teaching our methods to more than a thousand people, we’ve seen that several reasons for failure keep showing up. A discussion of these reasons follows, along with some solutions to consider. Let’s start with the easiest ones and work our way up.

1. Poor choice of pilot project

When you first bring design into an organization, you generally have to convince others of its efficacy. The best way to do this is usually to pick a pilot project and demonstrate how design helped it succeed. However, if you pick the wrong project and can’t demonstrate success, you will certainly lose credibility and may also lose any further chance of persuading people.

Choose a relatively small project with a clearly measurable outcome. For example, if a particular part of your application causes 30% of your tech support calls, fix that part and track the decrease in calls. It’s also a good idea to choose a type and size of project your company has done several times before, so you can show the savings in development time and cost. Also, avoid ill-conceived projects—if it’s a product or function no one will ever use, there’s only so much design can do to help.

2. Not having one consistent project owner

Every design project needs a business decision-maker associated with it—someone who can make trade-off choices between desirable design directions and difficult implementation issues, and will shepherd the product from concept to completion. In many cases, this is a product manager. Companies that try to do this by committee, with no single person responsible for the project’s outcome, seldom succeed. Everyone thinks everyone else is responsible, so the process proceeds very slowly, if at all. Changing project ownership partway through the process is also an enormous risk, particularly if the new project owner has not been involved until now; you will need to revisit every project decision, and may end up throwing out quite a few and starting over. This will lead to a perceived project failure, and will devalue the design process in everyone’s eyes.

So, senior managers, choose a single project owner and be sure that person is someone you’re not planning to reassign in a couple of months.

3. Incomplete design or insufficient design communication

The best design in the world won’t get built if it’s incomplete or undocumented. When clients ask us to design to the framework level (major navigation and interactions) but not provide the detail, they are much less likely to succeed than our clients who ask for bitmaps and widgets. This is generally because the people who have to fill in the rest are not interaction designers, and don’t have the appropriate skills and context to fill things in. Likewise, your documentation must be very complete, because if anything is open to interpretation, trust me, it will be interpreted. It might seem obvious to a designer that my bank’s ATM shouldn’t offer me the ability to withdraw from a money market account if I don’t have one, but it apparently wasn’t obvious to the people who built the ATM software.

This kind of problem is relatively easy to fix; be sure to assign designers for the duration of the project, and make sure there’s someone on the team responsible for providing detailed documentation.

4. Not getting buy-in from top executives

Every time we interview stakeholders on a project, we ask whether there are any executives higher up the chain of command who need to approve the project’s direction. One of our worst nightmares is being told that no one else will influence the project, then having an executive we’ve never met suddenly object to our direction. On one of our projects a few years ago, we were told that a senior executive didn’t need to be part of the process. Sure enough, two days before the end of a multi-month project, he didn’t like the design because he hadn’t gone down the path with us. Several months of formal usability testing finally convinced him, but the opportunity cost to our client was tremendous.

Interviewing top executives at the start and involving them at each decision point will help you avoid this.

5. The wrong people doing design

If you wanted to persuade people that martial arts were an effective means of self-defense, would you hire me, or Jackie Chan? (Believe me, you’d want Jackie Chan.) Design won’t take root in your company unless people see it done by experts. The vast majority of companies I’ve seen try to bring design in-house by telling some programmers that they’re now designers, or by having the product manager do some design in his spare time.

Although the need for designers varies during the project life cycle, design is a full-time job as well as a profession that requires many years of practice. Good interaction designers are hard to find, but they do exist—hire them!

6. Not committing resources to design

Even with the right pilot project and the right people doing the design work, if the management team doesn’t provide support in other ways, it’s much harder to succeed. We often see companies that won’t give designers access to users, or that won’t allow enough time to understand the problem, solve it to the level of detail required, and document it in a reasonable way. Unfortunately, until they’ve seen its value demonstrated, many people view design as a cost, rather than a savings (and more importantly, a strategic advantage).

Think about mini-projects you can use to demonstrate value, even with little or no budget. Use those small successes to ask for resources on a modest pilot project with an obvious opportunity for gain.

7. Failure to separate innovation from renovation

If you have one product manager and one development team, it makes sense for them to be responsible for the visionary new release 3.0 as well as the 2.x maintenance releases, right? Wrong. When that version 2.x deadline looms, no one has time or attention to spare for what the next major release should be, so the future product always gets shortchanged.

Instead, carve off a small team to focus solely on designing 3.0 in parallel with the implementation of maintenance releases. This might mean you throw away a little more of that 2.x code when you build 3.0, but it will save calendar time and increase what you can accomplish for the big upgrade.

8. The inmates are running the asylum

You knew this had to be in the list somewhere, right? It’s here toward the end of the list because it’s a big problem that takes a long time to solve. When we say the inmates are running the asylum, it means the programmers are making business decisions that should be made by executives. In most cases it’s not intentional, and the majority of people are unaware of the extent to which it happens. However, every time a programmer says “That’s not technically feasible,” he’s just made a business decision that’s invisible to most people, since “not technically feasible” really means “not in the tiny amount of time or with the constraints I know you’re going to give me.”

It’s a designer’s job to mediate this conversation. Changing the process on paper is relatively easy, but changing the attitudes and behaviors behind the process takes more time and effort. One way to help things along is to make sure that design doesn’t report in to engineering, but instead reports to a cross-silo manager who can balance marketing and engineering perspectives. Ultimately, responsibility for fixing this problem lies with senior managers, who have to ask, “What would it take to make it technically feasible?”

9. Unrealistic expectations

I can’t even count how many times someone has called me up to say “We need to design or drastically redesign the product that generates 100% of our revenue, and we want to ship it in two months.” For some reason, Fast Company or some other part of the Web boom hype created this perception that you can design, build, and launch a successful product faster than you can get a new driver’s license. While this may have been true for a couple of people who got lucky, it’s simply not true in most cases.

We seldom encounter this myth in companies that build physical products, because they’re much better acquainted with the reality that spending up-front time ultimately results in more efficient manufacturing and more profitable products.

Unfortunately, many companies assume their problems come with the territory, just like traffic noise comes with living in a big city. Have you ever noticed, though, how much more annoying the traffic noise is when someone points out that it’s there? You can do the same thing: bring the points of pain to the attention of the management team, identify the cause, and propose design as your solution. It may take a while to have an impact, but be persistent, tie the problems to dollars, and you’ll eventually get through.

10. Unhealthy corporate culture

For design to work in an organization, that organization has to be basically functional. By this, I mean there needs to be open communication at all levels of the organization, clear delineation of responsibility and authority, competent staff, and trust between managers and their teams. Some degree of risk-taking must be acceptable; otherwise, no one will be willing to stand up and say, “I believe we need to do this.” In healthy companies, certain kinds of mistakes are OK, as long as people learn from them. Senior managers challenge their teams to do better, but never ask the impossible, and they give their teams clearly stated problems to solve, instead of specifying solutions.

If your company lacks these qualities, work on fixing these major issues first before you try to implement design. Again, you’ll succeed in getting management’s attention if you tie these problems to dollars: talk in terms of lost productivity, employee turnover, and project delays. A good human resources manager will be your ally in this.

One step at a time

When you’re trying to bring design into an organization, it’s important to realize that you’re not just changing a process—you’re attempting to change the company’s culture and dearly held beliefs. It’s entirely possible to change any company, but it will take a clear goal for where you want to be, a plan for getting there, executive sponsorship, and excellent communication about the benefits of change. Change on this scale isn’t easy, but isn’t that true of just about everything that’s worth doing? Find allies within your organization, look to designers outside your organization for moral support, and don’t forget to celebrate your successes, because you will have some. Every time I get discouraged about the state of the industry, I remind myself that five years ago, no one know what interaction design was except those of us who did it. Today, marketers, developers, and executives call me up asking for interaction design. We must be doing something right, after all.

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