According to a new report from analyst firm TelecomView, WiMax gives a better ROI than 3G. The firm says those greenfield operators deploying WiMax will be in a superior position, while existing carriers will push its adoption to remain competitive as well as to lower costs. The firm also believes WiMax will capture 16 percent of the subscribers and account for 16 percent of CAPEX in high-speed mobile networks in 2011.
I'm not sure what the assumptions are here, but there seems to be a lot assumed. First, when are we going to see the mobile version of WiMax actually in the market and working? WiMax certainly has gained momentum with the IEEE finalizing the 802.16e mobile WiMax standard in December and the WiMax Forum unveiling the first equipment certified for fixed WiMax in January. But mobile broadband technologies such as EV-DO and HSDPA are on a rapid deployment pace, which means coverage and economies of scale advantages are kicking in. WiMax proponents are counting on Intel to fulfill its promise of integrating mobile WiMax into laptops by 2007, translating into a potential competitive advantage that leads to deployments in the 2008 time frame. But that still gives mobile operators a two year advantage with 3G.
Then there is competition from other IP-based broadband competitors, such as QUALCOMM's Flash-OFDM, 802.20, TD-CDMA and the Chinese standard TD-SCDMA. Flarion, which QUALCOMM recently purchased, is the only company to show that it can make OFDM work in a commercial mobile environment. TD-CDMA is already deployed in several countries. Meanwhile, the power of the Chinese market means TD-SCDMA premise equipment shipments could easily dwarf WiMax equipment shipments in the next few years. All of these competing technologies create a fragmented market.
WiMax is not DOA. It certainly has all of the ingredients for market success: a solid standardization map, marketing muscle from Intel, backing from hundreds of vendors and interest from a broad range of telecom players. But whether it provides a significantly better business case than 3G is highly speculative given the head start of 3G and other IP-based technologies. And we all know very few new technologies make their commercial market debut on time.
My colleague, Brian, will be attending 3GSM next week in Barcelona and will be providing his insights from the show. - Lynnette