Mobile WiMAX is go, but going where?

Mobile WiMAX is go, but going where?

By Tammy Parker

Certifications of mobile WiMAX products this year will jumpstart expansion of the technology. Whether it will expand beyond delivering basic broadband access and VoIP is still moot.

Analyst predictions vary regarding the impending market for mobile WiMAX, though they all agree it will be big. Monica Paolini, analyst with Senza Fili, said there will be 15.4 million WiMAX subscribers by 2010, 57 per cent of which will use 802.16e-2005 mobile WiMAX.

Yankee Group recently forecast that there will be some 28 million mobile WiMAX subscribers worldwide by 2011. Although North America has been the focus of mobile WiMAX developments, thanks to Sprint Nextel and Clearwire’s plans to deploy the technology in the US, the region will only account for about a quarter of the global mobile WiMAX market in 2011.

Considerable interest in mobile WiMAX is expected to come from developing markets. Early signs of this can be seen in two contracts signed recently by Alcatel-Lucent, which will supply 802.16e mobile WiMAX infrastructure to Dominican Republic startup Onemax and Telmex Chile. Both networks will use 802.16e in the 3.5GHz band, will become operational in H207 and will enable broadband wireless applications such as high-speed internet, video streaming and VoIP using laptops, computers, modems or wireless handheld terminals.

Bruno Potdevin, vice president of business development for Alcatel-Lucent’s WiMAX activities, said mobile WiMAX will flourish due to the ability of 802.16e to serve mobile and fixed applications – termed universal WiMAX. He noted 802.16e will foster widespread use of lower-cost, self-installable CPEs (customer premises equipment) that can be used in fixed applications.

Though early purveyors of WiMAX are still pushing 802.16d fixed WiMAX, particularly in developing markets where operators may not be willing to pay a premium for 802.16e mobile WiMAX, Potdevin asserted that the market for 802.16d is drying up quickly. “2007 is the year where people will shift from d to e definitely. If you are really looking and are serious about the mass market, the only way to go is e; it’s definitely not d,” he said.

Potdevin splits the market for mobile WiMAX into four segments:

  1. users in un-served and underserved areas who need basic broadband access;
  2. business users who require widespread broadband access, including wireless VoIP in areas where there is no cellular coverage;
  3. small and medium size enterprises, often located in the fastest-growing countries, that need high-speed internet connections;
  4. consumers who demand connected entertainment devices.

Not surprisingly, operators in developing countries are focused on using mobile WiMAX to ease the digital divide for consumers and enterprises and to deliver VoIP.

What might be surprising, however, is that Craig McCaw’s Clearwire is initially following that line of thinking as well, rather than focusing on entertainment opportunities. Thanks to a $600m investment from Intel Capital, Clearwire intends to transition its proprietary wireless broadband networks to mobile WiMAX in the US as well as in Brussels and Dublin. The company reported 184,400 US subscribers and 21,800 international subscribers as of December 31st, 2006.

The business that Clearwire ultimately builds could have global implications for the take-up of mobile WiMAX. In addition to its international operations in Brussels and Dublin, Clearwire also holds minority interests in operators in Denmark and Mexico and has spectrum in Spain, Poland and Romania. In addition, the company secured a winning $25m bid during last fall’s 3.5GHz spectrum auction in Germany.

Furthermore, Clearwire has the second largest spectrum position in the 2.5GHz band in the US, just behind Sprint Nextel, with spectrum rights covering 214 million people. The company is also paying $300m for the 2.5GHz spectrum held by AT&T in the south eastern US.

But while Intel, and its minion Sprint Nextel, have lately emphasized mobile WiMAX’s role in a new category of ultra-mobile devices powering new applications in consumer electronics, Clearwire indicates it will stay true to its main business of providing a wireless broadband alternative to traditional DSL and cable-based networks and delivering VoIP services. In a recent filing for an initial public offering on NASDAQ, through which it hopes to raise $575m, Clearwire explained that it hopes to continue its existing business while possibly expanding into: “Premium services and applications, which may include wifi hotspots, public safety services, security services, and subscription-based technical support.”

The company left the door open to entertainment services, noting that its mobile WiMAX network may eventually be used to deliver communications capabilities to a new generation of, “notebook computers, ultramobile PCs, PDAs, game consoles, MP3 players, and other handheld devices.”

Following the “if we build it, they will come” philosophy, Clearwire explained: “We further believe that commercial deployment of mobile WiMAX will lead to the development and availability of mobile products that are compatible with our planned mobile WiMAX network.”