WiMAX’s opportunities: few and far between

Fierce competition from two flanks - fixed-line broadband and cellular - will limit the global deployment of WiMAX. So argues a new study from Sound Partners.

The market research firm has developed a business model based on the same assumptions as the WiMAX Forum as to what is needed to build a network. “We wanted to understand the key sensitivities,” says Alastair Brydon, Sound Partners’ CEO whose WiMAX report is to be published by Analysys. "In reality there are not that many cases [for WiMAX] that offer a good return."

The study looks at deployment scenarios in urban, suburban and rural areas in developed and developing markets. In developed markets, carriers’ digital subscriber line (DSL) deployments of ADSL2+, complemented with fibre-to-the node/VDSL2 to fill in coverage and enhance link speeds, poses a key competitive threat to WiMAX. Moreover, such DSL services are being offered by well-known brand names (Tesco, 3, Sky) as well as incumbents. “It will be really hard for anyone, using any [broadband] technology, to get 10 to 15 percent market share in five years,” says Brydon.

The same applies in rural areas where DSL coverage is being extended to nearly all exchanges. “BT is constantly expanding its service,” he says.

Nor is this solely the case in markets such as the U.K. China plans to use broadband wireless access to provide services where there is no fixed-line infrastructure but not WiMAX. “There are no plans issued by operators in China for the deployment of WiMAX,” Tian Wenguo, senior vice president of company strategy at ZTE, told NGN.

“Cellular is also rocketing,” says Brydon. “Terminals for cellular are dirt cheap as are DSL modems; WiMAX terminals are not.” Someone must pay for them, and if it is the operators it will prove a big expense. “We are not saying WiMAX won’t happen, just it will not be as big a business as some are arguing,” says Brydon.

WiMAX’s prospects would certainly be enhanced if a major mobile operator embraced the standard. But, if anything, cellular operators are looking to DSL to bolster their broadband offerings. Vodafone and O2 are adopting DSL in certain markets though as yet it is not a global decision.

“They are in the decision process now, which is why this is a critical time for WiMAX’s prospects,” says Brydon.

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