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NEWS
Long Time Coming; Mobile
WiMAX and
the Rest
Andy Fuertes and Larry Swasey, Visant Strategies
This is finally the year when a clear evaluation of most of the technologies we have gathered and vastly improved upon during the last decade-and-a-half can be accurately evaluated for what they are. Mobile WiMAX, WCDMA LTE and EV-DO Rev C are all air-interface realities in either development or roll outs in 2008. You are able to see what a big deal all this really is by stepping back a bit.
We Have Come Far
The evolution of the wireless
world has happened rather dramatically since the 1992 digital upgrades in Europe,
which dramatically changed results on both sides of the subscriber/operator
equation.
Do you remember fifteen years ago? It is very doubtful that unless you were a lucky European or a rich person elsewhere in the world that you carried a phone around with you that could be used on the go. And for the mobile and fixed wireless crowd, remember the speeds and the capabilities you were selling to corporations? We think perception of the mobile and fixed data markets have been somewhat negative only because they have been over-hyped for about, oh, say, maybe about those same fifteen years.
So as mobile WiMAX comes out we must remember how far we have come and evaluate both sides of the equation before completely deriding mobile WiMAX or calling it the next wireless savior.
Hype Up, Hype Down
Within this past year the
hype that was so evident concerning the WiMAX industry in previous years subsided
a bit likely due to many facts, with one likely the less than stellar WiBro uptake
(there are roughly 1,000 total WiBro subs in December 2007). And while Sprint
Nextel, the US mobile carrier with 54 million subscribers reported
3Q 2007, has said it is set to deploy mobile WiMAX, it has not happened yet and
no other major mobile carrier has set like plans.
While some of the shine may be off, that was because the WiMAX industry was believed to be stepping into the much lucrative world of mobile wireless more quickly than possible; the future is still quite good for the industry.
WiMAX is currently seizing and will grow into a multi-billion dollar fixed and portable wireless market regardless of its fortunes in the mobile cellular market. 802.16e may or may not capture a sizable portion of the mobile opportunity but that is hardly the end of the story. 802.16m addresses shortcomings of mobile WiMAX and will be published by a more open standard body than 3GPP or 3GPP2. It will also reach market at roughly the same time as LTE. The jury is far from out on this one.
Despite nearly three of years of publicity, mobility remains a negligible portion of WiMAX equipment sales and subscribers. DSL and cable modem replacement applications in the 3.5 GHz band are driving the WiMAX market at this point and delivering between 40% and 50% annual growth for WiMAX equipment vendors.
Sprint Nextel's potential deployment of WiMAX within North America could tilt the market in favor of mobility applications sometime in 2008, but we expect this migration to occur in 2009/2010.
Timing is Everything
Critiques regarding the
spectral efficiency of mobile WiMAX remain but we believe timing may be an
equal issue regarding 802.16e's ability to play a role in the mobility market.
Carriers who might have deployed 802.16e will pursue additional HSPA and EV-DO
network upgrades over the next three years suggesting that the real competition
for next generation mobility will occur in the 2010-2012 period and fall
between 802.16m and LTE. Qualcomm’s UMB will also be a player.
WiMAX is primarily replacing sales of proprietary gear at this point. It has not elevated growth in the fixed wireless industry beyond pre-WiMAX trends, as the sales of Alvarion and Airspan indicate. We believe the same is true for the majority of privately held WiMAX vendors. They are expanding sales at roughly the same rate that was expected from sales of proprietary equipment.
We believe this is the first step to increasing overall growth in the fixed wireless market, which further cost reductions and technology improvements to bring to fruition. Although we believe that WiMAX sales are primarily replacing those of proprietary fixed wireless equipment, as opposed to creating substantial growth in the BWA market, the growth in WiMAX equipment remains above 40% per year in both value and units, and this trend will continue through the end of the decade and the beginning of the next.
We will soon see about mobile WiMAX.
© 2008, Visant Strategies