It’s the best and worst of times for WiMAX

The story of WiMAX is a tale of two markets: one in which WiMAX, as an emerging technology, has made enormous progress over the past year; and one in which its opportunities are being threatened by developments in the larger converging broadband market, such as the relentless advance of rival mobile broadband system HSDPA and the acceleration of LTE development.

To paraphrase the opening lines of Charles Dickens’ A Tale of Two Cities, it’s the best of times and the worst of times for WiMAX.

The WiMAX industry has gained significant momentum in the past 12 months, passing a string of key milestones, including product certification; the launch of services by major operators, such as Sprint Nextel; commitments to WiMAX by key Internet players, such as Google; and the long-awaited arrival of WiMAX notebooks and other devices.

WiMAX is also starting to take off in many major emerging markets, where all the pieces are falling into place, including availability of spectrum, huge pent-up demand for broadband, certification of mobile WiMAX equipment and the arrival of lower-cost devices, such as ultraportable notebooks and netbooks.

The second edition of Informa Telecoms & Media report WiMAX Broadband Convergence: Emerging Fixed, Portable & Mobile Internet Markets forecasts that WiMAX will account for 24% of India’s broadband subscriptions in 2013, up from 7% in 2008.

But rival technology HSDPA has become a runaway success in many markets worldwide, and the progress of emerging rival LTE has accelerated and gained the backing of most of the world’s major mobile operators, including Vodafone and China Mobile.

There’s no doubt that mobile WiMAX has come of age in the past year, with the launch of major services, such as Sprint’s Xohm, but it faces a tough fight against HSDPA and eventually LTE in key markets. As a result, many WiMAX vendors and operators need to reshape their strategies.

For example, mobile WiMAX pioneer KT of South Korea had 200,000 WiBro subscriptions at end-May, well below expectations, given that the service launched in June 2006 and had been expanded significantly by May 2007. In contrast, KT’s mobile arm, KTF, launched HSDPA services in March 2007 and had 4.8 million subscriptions a year later.

KT might be a special case, since it launched mobile WiMAX services early, in a competitive broadband market, but the disparity in the performances of mobile WiMAX and HSDPA in South Korea shows the challenges WiMAX faces in some major developed markets. To overcome the challenges and gain traction in fiercely competitive markets, operators will have to use WiMAX as a platform for innovative business models, devices, applications and services.

Mobile WiMAX also faces challenges because it is entering its capital-intensive deployment phase in the midst of the global financial crisis, which will make it harder for operators to secure funding for new deployments. Some operators, such as the new Clearwire, are already well-funded, but it’s a tough time for other WiMAX operators looking for capital. Of course, the credit crisis could also delay investments in rival systems, but HSDPA is already widely deployed, and LTE deployments won’t start until 2010.

There are significant opportunities for WiMAX in many regions and market segments worldwide, but the technology will struggle to compete with HSDPA and other broadband systems in others.

It’s the best of times for WiMAX because it has come of age in the past year and is taking off in some key markets, which is expected to result in a worldwide WiMAX-subscription count of 103 million in 2013. But in the context of the global converging broadband market, it’s the worst of times for WiMAX, because HSPA is booming and is expected to have more than 1 billion subscriptions worldwide in 2013, almost 10 times as many as WiMAX.

Mobile WiMAX still has a significant head start over OFDMA-based LTE. The result is that WiMAX will be the leading next-generation mobile broadband system in 2013, with significantly more subscriptions than LTE.

The bottom line is that WiMAX will take a significant share of the converging broadband market in some regions but will struggle in others, because of competition from HSPA and LTE. WiMAX operators and vendors need to understand the new realities of the market to make sure they’re on the right track.


One comment

  1. Avatar kamran 24/11/2008 @ 10:47 pm

    Hi Sir or Madam,

    What s your opinion about XOHOM system which is installed in baltymore,usa?

    Do you think this system can be compatible for mobile connectivity specially in this decade?

    Sincerely Yours,

    Kamran Moghareh Abed

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