WiMax Providers: Get Moving!

The mobile WiMax market shows positive signs of growth on a worldwide level, partially due to lower technology costs

September 8, 2008

2 Min Read
WiMax Providers: Get Moving!

WiMax continues to draw attention as a next-gen broadband, wireless technology option. However, network operators may actually be underselling one of WiMax's key attractions: its ability to accommodate mobile communications.

If mobile WiMax (IEEE 802.16e) seems rooted in cement, it is partly because of the way operators market their services. Operators are not reflecting what they are deploying: Most operators with 802.16e infrastructure are not yet marketing their services as mobile because they are waiting for the selection of mobile WiMax devices to grow in terms of models and price points.

The gap between infrastructure and end-user devices is one reason significant growth in WiMax may not occur until 2010, according to the latest edition of Unstrung Insider, "The Future of Mobile WiMax: Where, When & How Much?," which analyzes the global prospects for mobile WiMax deployment and uptake.

Inexpensive chips and base stations also are driving the WiMax market, and these technologies, depending on the company, might be good or bad news. Between complexity and commercial nascence, mobile WiMax base stations should carry a hefty premium – about 50 percent – over 3G gear. However, they do not since vendors are willing to eat margins to make sales. Meanwhile, chipset prices are plummeting, with sets costing roughly half of what they did a year ago. More price cuts are likely over the next six months.

For network operators, inexpensive chips and base stations are good news because they reduce overhead costs, thus improving the chances of pricing mobile WiMax services competitively, yet profitably. But pricing pressure is a mixed bag for equipment suppliers, because although it means more sales, it also can erode margins.

The prospect of less expensive infrastructure and user devices is a huge plus for service providers that want to use mobile WiMax to bring broadband to parts of the world where it is unavailable or too expensive for most consumers and businesses. In fact, emerging, unserved, or underserved (pick your adjective) markets will represent the biggest opportunities for WiMax.

However, for WiMax to compete effectively with Long Term Evolution (LTE) and even with wireline-based options such as fiber-to-the-home (FTTH), operators must emphasize the fact that mobility is a key component of their service. The longer they wait to push the mobile aspect of WiMax, the tougher it will be to position the technology as an attractive alternative to other broadband options.

— Tim Kridel, Contributing Analyst, Unstrung Insider

The report, "The Future of Mobile WiMax: Where, When & How Much?," is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.

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