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WiMax Fights Nordic Brush-Off

The reluctance of Nokia Corp. (NYSE: NOK) and LM Ericsson (Nasdaq: ERICY) to commit to the 802.16a wireless MAN market is unlikely to bring about a WiMaxdämmerung, according to analysts.

But the absence of the two Nordic mobile monsters -- that between them dominate 40 percent of worldwide mobile network infrastructure revenues -- does suggest that the technology could end up as strictly a fixed wireless, cable/DSL replacement, rather than the challenger to 3G that some boosters are already positioning it as.

WiMax, for those of you that missed the memo, is the WiMax Forum's marketing moniker for the 802.16a wireless MAN standard. As well as promoting the technology, the Forum will conduct interoperability testing when products start to arrive late in 2004 and 2005.

Initial products bearing the WiMax badge are going to be based on the 802.16a revision d specification, due to be ratified sometime soon and intended as a high-speed fixed wireless technology. The future 802.16a revsion e specification should support faster handoffs between base stations, facilitating mobile applications (see Working for the MAN).

But despite the mobile angle, Nokia and Ericsson aren't biting.

Neither firm is investing in WiMax technology or participating in the Forum (see Ericsson Cool on WiMax and Nokia Chills on WiMax). But their network rivals Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Siemens AG (NYSE: SI; Frankfurt: SIE) are (see Alcatel, Intel Team on WiMax, Siemens Plans WiMax Move, and WiMax Gets Serious).

This tends to suggest that the technology may end up more focused on fixed wireless than mobility. Alcatel -- in particular -- does plenty of business in the cable/DSL market and would be naturally inclined to support a fixed wireless technology that complements its existing business.

Some analysts believe that Ericsson and Nokia may be leery of WiMax because it could hurt their existing cellular businesses.

“3G and WiFi have for long been touted as complementary technologies, but WiMax is less clear cut. Companies like Nokia and Ericsson have staked a lot of interest in 3G, and I can understand why they don’t want to be seen promoting WiMax," says John Delaney, from Ovum Ltd.

And all analysts we spoke to believe the WiMax market is going places -- with or without the mobile bigshots.

“I’m not sure the absence of Ericsson and Nokia really hurts the industry too much,” comments Current Analysis’s Peter Jarich. “Even without them, there is no shortage of WiMax players -- big guys like Alcatel and Siemens as well as would-be WiMax leaders like Alvarion. Look at WiFi. Though less carrier-focused, it has done pretty well without significant activity from the top two mobile players.”

[Ed. note: Although wireless LAN infrastructure is easy for home users to install by themselves, WiMax basestations -- at least initially -- are likely to be bigger and therefore something that service providers will deal with.]

“It’s to be expected,” opines Andy Fuertes, senior analyst at Visant Strategies Inc. “WiMax is still a new technology, the market for which is quite small. From an economic viewpoint it might not be wise for them to jump on... Certainly their omission isn’t holding the industry back.”

Fuertes adds that Nokia and Ericsson could later reconsider their position, if demand for the 802.16a version e standard booms.

“If mobile carriers show real support for it then I would expect them to rejoin [the WiMax Forum].”

Mohammad Shakouri, Forum board member and VP of marketing at Alvarion, certainly hopes so. “Nokia has closed their [wireless broadband] division but are still keeping abreast of what’s happening and looking at the benefits,” he tells Unstrung. “I believe that down the road we might see Ericsson, but at the moment it is the system integrators making the first moves.”

— Justin Springham, Senior Editor, Europe, Unstrung

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