How Scalable?

Scalability of the network, the second factor, is no less important than total cost of ownership,
because it determines the long-term prospects of the network operator.
In terms of the ability of the central network management software to handle multiple
base stations and multitudes of customers, the scalability of 802.16-based networks is not a
problem. The real issue is how many base station sites can be secured and what arrangements
the operator can make for backhaul. Theoretically, a large network should be more profitable
to operate than a small one because central office costs are relatively fixed, as are access costs
for an Internet point of presence. Often, however, the network operator will be able to identify
only a few buildings with good sales potential and may not be able to sign up more than a few
hundred customers. The question then becomes, how does the network scale down? Unless
the network operator can upsell the customer on a lot of value-added services and applications,
the answer to that question may not be reassuring because the fixed costs of running the
network must be amortized among a relatively small number of customers.
Regarding the number of potential customers that are reachable, I have already touched
upon this topic. With the new non-line-of-sight equipment for the lower microwave region,
most potential customers can now be reached—if they are in range of a base station. With
higher-frequency transmissions, the ability to reach buildings remains a problem. The only
solution is to utilize a mesh architecture and place routers or switches at each subscriber
premises, but no company with the exception of Terabeam is currently making millimeter
microwave equipment that can operate in a mesh topology.