This time last year, Wimax was poised for greatness. The Wimax Forum stormed the Mobile World Congress with commercial gear for 802.16e and 240 live networks, while its closest competitor, LTE, was at least a few years off.
One year later "&brkbar; well, not that much has changed, although one could be forgiven for thinking that Wimax was losing its mojo, given the recent spate of news.
For example, much noise was made over Nokia's decision to discontinue the N810 Wimax tablet, which was created for the US market, where Clearwire's Wimax offering has not exactly set the world on fire as Wimax proponents had hoped. Meanwhile, just before we went to press, Nortel Networks finally gave up on mobile Wimax, calling off its seven-month-old partnership with Alvarion.
In Australia, Wimax is still struggling, with Unwired facing further delays in its network rollout due to the rising cost of buildout, which is 10% to 15% higher than it was a year ago.
Then there was Hong Kong's wireless broadband spectrum auction, which wrapped up in late January. Telecoms regulator OFTA had 195 MHz of spectrum in the 2.3-GHz and 2.5-2.6 GHz bands up for grabs, and when the dust settled, three bidders - CSL, China Mobile HK and Genius Brand (a JV between PCCW and Hutchison), walked
away with 30 MHz of spectrum in the 2.5-2.6 GHz bands. Not a single Hz was sold in the 2.3-GHz band. No one even made an offer. And while the 2.5-GHz frequencies are compatible with Wimax, none of the winners have indicated that they intend to use it for anything other than LTE.
Still, it's hard to see how all this adds up to Certain Doom for Wimax. For a start, there's the 400+ operators who have actually rolled out Wimax (according to the Wimax Forum). Equipment sales figures are looking good as well - Dell'Oro Group reports that mobile Wimax vendors had a record quarter in Q3 2008 with revenues quadrupled year on year, while Q4 was expected to set another record as well.
Still, Infonetics paints a grimmer picture. Add in fixed Wimax to Q3 and compare it to Q2, and Wimax sales were down 21%. And both Infonetics and Dell'Oro reckon the global economic will slow down further Wimax spending in 2009. And while LTE will be no less susceptible to the downturn, it wasn't expected to see serious commercial service until at least 2011 anyway. In that sense, Wimax stands to lose the most ground as its main wireless broadband rival stays more or less on schedule.
A profitable niche
By the same token, however, there's still plenty of debate over just when LTE will really kick into commercial gear. LTE mavens like Ericsson have been pushing to get LTE out sooner, by the end of this year or mid-2010, but skeptics estimate that in most markets, it may be 2013 or 2014 before LTE really gets going. So Wimax's first-mover advantage window could be wider than it looks.
Even it's not, Wimax has never really been an either/or proposition. It can't afford to be. In terms of global scale, it was never going to outspend, outnumber or otherwise discourage 3.5G cellcos from upgrading to LTE.
But Wimax still has the time and the maturity to find a comfortable and profitable niche in the 4G world. To hear Nomura Bank analyst Richard Windsor tell it, that niche may be the fixed-services market, where Wimax already has a solid foothold in emerging markets (which may be why Nortel is actually holding on to its fixed Wimax business whilst abandoning mobile Wimax).
The Wimax Forum isn't likely to settle for that. In any case, it will be pushing the PR juggernaut hard this year with more Wimax devices, M2M apps (video surveillance being a current favorite) and support for roaming. The latter could make things especially interesting if HSPA operators continue to charge outrageous rates for data roaming. If Wimax accomplishes that much, 4G will be all the better for it.