WiMAX is a tale of two markets - one being WiMAX as an emerging technology gaining significant momentum in the last year, and the other being the larger converging broadband market, where the runaway success of rival mobile broadband system HSDPA and the acceleration of LTE threatens the opportunity for WiMAX in some markets.
"It's the best and worst of times for WiMAX," says Mike Roberts, principal analyst at Informa Telecoms & Media and author of WiMAX Broadband Convergence: Emerging Fixed, Portable & Mobile Internet Markets - 2nd Edition, a new strategic report with uniquely comprehensive forecasts on the market opportunity for WiMAX.
It's the best of times because the WiMAX industry has undoubtedly gained significant momentum in the last year, 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 key emerging markets. "In many major emerging markets all the pieces are falling into place for WiMAX, including availability of spectrum, huge pent-up demand for broadband, certification of Mobile WiMAX equipment, and the arrival of new lower-cost devices such as ultra-portable notebooks and netbooks," says Roberts. "For example our forecasts show that WiMAX will account for 24% of India's total broadband subscribers by 2013, up from 7% in 2008."
But despite these successes, it's also the worst of times for WiMAX because its rival HSDPA has become a runaway success in many markets worldwide, and emerging rival LTE has accelerated and gained the backing of most of the world's major mobile operators, including Vodafone and China Mobile.
"The converging broadband market has changed dramatically in the last year due to the rise of HSDPA and the acceleration of LTE," says Roberts.
"There's no doubt that Mobile WiMAX has come of age in the last year with the launch of major new services such as Sprint's Xohm, but it now faces a tough fight with 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 had 200,000 WiBro subscribers at the end of May 2008, well below expectations given the service launched in June 2006 and was expanded significantly by May 2007, according to one of the detailed WiMAX operator case studies in WiMAX Broadband Convergence. In contrast KT's mobile arm KTF launched HSDPA services in March 2007 and had 4.8 million subscribers by March 2008.
Mobile WiMAX also faces challenges because 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 for other WiMAX operators still looking for capital it's a very tough time," Roberts says. "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."
WiMAX Broadband Convergence finds significant opportunities for WiMAX in many regions and market segments worldwide, but in others it will struggle to compete with HSDPA and other broadband systems. "It's the best of times for WiMAX because it has come of age in the last year and is taking off in some key markets, which will lead to 103 million WiMAX subscribers worldwide by 2013," Roberts says. "But in the context of the global converging broadband market it's also the worst of times for WiMAX because its rival HSPA is truly booming and will have more than 1 billion subscribers worldwide by 2013, more than ten times as many as WiMAX."
However Mobile WiMAX still has a significant head-start over its OFDMA rival LTE, which will launch commercially in 2010. "The result is that WiMAX will be the leading next-generation mobile broadband system in 2013, with significantly more subscribers than LTE," Roberts says.
"The bottom line is that WiMAX will take a significant share of the converging broadband market in some regions, but will struggle in others due to competition from HSPA and LTE," Roberts says. "WiMAX operators and vendors need to understand the new market realities to make sure they're on the right track."
Informa Telecoms & Media, http://telecoms.msgfocus.com
