The Chinese government could start issuing 3G mobile licences as early as this week according to local press reports.

“2009 will see WiMAX find its place in the spectrum of radio technologies.”

So says Richard Windsor, analyst at Nomura Bank, but he adds it will be in fixed access (voice and internet) – using the 802.16d standard and later mobile WiMAX (802.16e) – that WiMAX will make most headway. (Although called mobile WiMAX, the 802.16e standard can provide a better fixed access performance than 802.16d.)

“Fixed-Mobile [802.16d] has seen the vast majority of deployments to date and is the only application that I think WiMAX will be used for in the long-term,” says Windsor. “In mobile, WiMAX is up against LTE where the only advantage it has is its commercial maturity. I have long believed that real demand for 4G is unlikely to materialise much before 2014/2015 and by then WiMAX will have lost this edge.”

Windsor further argues that as the level of commitment to LTE is high among tier one operators, it will have a substantial scale advantage over WiMAX when it comes to cost.

“This, combined with handset availability, is likely to mean that mobile WiMAX networks will quickly migrate to LTE once the LTE technology matures,” says Windsor. “This leaves only the fixed-mobile access market available to WiMAX, substantially reducing long-term expectations”

Nomura says the total WiMAX market is forecast to be $8bn by 2012 but removing mobile reduces that to $4bn. The market in 2008 was around $1bn. “A substantial lowering of forecasts could easily trigger further consolidation [Nortel and Alcatel-Lucent have already exited],” adds Windsor.

Windsor sees a potential upside for Israeli-headquartered Alvarion, however, if a further shakeout among major WiMAX suppliers occurs. “I think this would move the market more in favour of Alvarion, which is the market leader in WiMAX RAN,” he says. “The company is adjusting its cost base and should be in good shape to make money even with no revenues from mobile. Alvarion is a small cap [$233m] but I think it will do well once the above scenario has crystallised. Before that time it runs the risk of suffering as long-term market expectations halve.”