WiMAX cheaper than 3G

WiMAX cheaper than 3G

But for how long?

WiMAX spectrum is significantly cheaper than 3G bandwidth and in some cases has been less than one thousandth of the cost of 3G for a given geographic area, according to figures from Pyramid Research.

The analyst notes that a correlation exists between the price per MHz per person and the GDP per capita of the country in which the license is used. In India, Brazil, and Ukraine, where GDP per capita is low, the price per MHz per person is less than $0.01. By comparison, in countries with high GDP per capita, such as the UK and Germany, the price per MHz per person is slightly over $0.01, while in the US it is greater than $0.03.

Dan Locke, analyst at Pyramid Research, said that bidders for WiMAX spectrum to date have been smaller players, with large mobile operators remaining faithful to the cellular technology roadmap.

“Deep pocketed MNOs have long felt that owning 3G spectrum was central to their strategic future. Few feel the same about WiMAX or are willing to enter yet another expensive auction,” he said.

And Locke believes that WiMAX spectrum is about to get a lot more expensive as more regulators release lower frequencies to be used for mobile WiMAX. These bands are attractive because they enable an increase in traffic capacity without the need for additional base stations.

In Britain, expectation that the 2.5GHz UMTS Extension band might be opened to other technologies has caused a stir and could be the starting gun for UK WiMAX. The move has also drawn interest from leading cellular operators, with Vodafone believed to have registered an interest.

Heavyweight interest could well push up the price of WiMAX spectrum, as operators are not averse to competitive bidding if they believe they will achieve a worthwhile return on investment.