Vertical apps key for WiMAX, says analyst

Vertical services will account for 24 per cent of WiMAX subscriptions and 14 per cent of LTE subscriptions by 2014.

This is one of the headline findings from a new report by Senza Fili Consulting: “Bringing Wireless Broadband to Vertical Markets: a high-margin revenue stream from operators and compelling services for enterprises.”

According to the report, vertical applications in 3G, WiMAX and LTE networks are ready to take off, and they represent a huge growth opportunity for operators facing flat ARPUs from retail individual subscribers. Enterprises, argues Senza, are finally ready to adopt vertical applications – such as M2M, in-vehicle telematics, mobile workforce support – which require wireless data connectivity.

Senza estimates there will be over 154 million connections supporting vertical applications within 3G, WiMAX, and LTE networks by 2014, generating more than $43bn in cumulative service revenue by that time.

“Vertical services can be very profitable for operators. They bring in a steady revenue stream generated by a small number of contracts, each with a high number of connections. And churn is low – contracts typically last ten years,” says Monica Paolini, the report’s author.

Senza warns operators, however, that they need to be well equipped to face the challenges of this highly fragmented market if they are to make a profit: customers expect deep application-specific expertise.

Among the vertical applications to emerge, Senza envisages vehicle telematics and support for the mobile workforce will be the most widely deployed because they require the bandwidth and wide area coverage that 3G, WiMAX and LTE support. Additional wireless broadband market growth will come from emerging consumer applications available in vehicles and in mobile and CE devices that will extend wireless broadband beyond individuals to connect the entire environment.