Although the hype around WiMAX is quickly dissipating, we believe the standard has gained enough backing and volume to serve as an alternative for the provisioning of mobile broadband access. It has begun to carve out a tight niche tied to certain target opportunities, it has inspired a new wireless business model, and it has a flexible, flat, all-IP network architecture better suited than HSPA to providing Internet-based services. In contrast, however, the LTE standard has quickly gained substantial momentum. Since WiMAX 802.16e and LTE release 8 will provide similar real-world performance, ultimately the decisions of the largest WiMAX players may determine the fate of WiMAX. For example, Clearwire has been forthright about its intention to choose the technology that provides the best business case given timing and end-user demand for service quality and devices, making its commitment to WiMAX rather unclear. Will the WiMAX opportunity reach a critical point to drive vendor backing of the next iteration of WiMAX, 802.16m, which we expect will be finalized in 2010? The OFDMA architecture of both WiMAX and LTE will pave the way toward 4G networks, which as defined by the ITU-R achieve 1Gbps or more, so it is possible we will see a blending of the two standards.
This record analyzes the current WiMAX operations world wide, comparing operator industry models, community economics and the entire market probability relative to UMTS/HSPA and LTE. The objective is to assess which technology delivers the most popular and profitable mobile voice, broadband and video services in the context of specific market conditions: case studies examine UQ Communications (in Japan), Clearwire (the US), Mobily (Saudi Arabia), Digicel (Caribbean), Tata (India), Umniah (Jordan) and Yota (Russia).
Key findings include:
– The number of WiMAX deployments – currently more than 500 across 145 countries – is greater than that of any conventional 3G technology and more than 50% greater than the number of HSPA network commitments. However, most WiMAX deployments to date have been small, serving targeted communities, businesses and private institutions. As a result, WiMAX covers only 6% of the world’s population, which is far behind the 85-90% that conventional mobile networks cover. We do expect WiMAX coverage to increase, although rather slowly on a global basis, with 10-12% population coverage by year-end 2010. Many of the larger WiMAX deployments are still underway, and many large countries such as India, Indonesia and Vietnam are just beginning to issue WiMAX licenses. Some of the largest WiMAX operators in the world in terms of coverage will be Clearwire (US), UQ Communications (Japan), Globe Telecom (Philippines), Yota (Russia) and Safaricom (Kenya).
– More than 80% of all WiMAX deployments are fixed networks that use 802.16d, a standard that leading vendors such as Alvarion and Huawei no longer ship. Going forward, we expect all WiMAX operators to use 802.16e equipment even if regulatory bodies restrict them from offering mobile services. The first available WiMAX devices were PC cards and USB dongles, followed by laptops with embedded modems, leaving operators no choice but to first go after broadband customers. Those markets with the lowest broadband penetration rates represent the most upside, and we estimate that roughly 70% of WiMAX deployments are in emerging markets, led by the Africa and Middle East region with more than a quarter of global deployments.
– Factors using operators to set up WiMAX are velocity to marketplace, surgical community installment possibilities, mobility, a couple of-use situations, its IP architecture, and the cost of spectrum and installment. WiMAX operators in aggressive markets glance to differentiate themselves from current mounted and cellular broadband options by way of promoting a mixture of the following advantages: portability, mobility, flexible pricing plans presented without contracts, greater applications, simplicity of carrier activation, service high quality and safety, superior purchaser care and higher throughput. cellular digital community operators (MVNOs) will be an instrumental piece of many WiMAX operators’ industry models.
– On average, WiMAX pricing tends to be more expensive than DSL pricing, but the difference has already begun to diminish, and the two will blend further by 2014. In contrast, prices for WiMAX-based broadband service are generally US$15-25 lower than for conventional 3G (UMTS/HSPA, EVDO) service at similar download speeds. In general, WiMAX operators target different markets than other 3G players, which boast a substantially larger addressable market of voice customers.
– If an MNO is anxious in regards to the provider quality of its core services as a result of an overloaded community, a directly 3G upgrade is extra suitable than including WiMAX as a parallel data network, as a result of cell voice consumers represent a larger goal chance than fixed broadband consumers. cellular voice continues to be an important driver of revenue for cellular operators around the world, comprising seventy fivepercent of overall international provider income.
– Certain emerging market operators would benefit from bypassing 3G in favor of moving to LTE in a few years. But this decision depends on spectrum resources, the competitive landscape and the need for better spectral efficiency, which is impacted by voice and data traffic levels.
– Increasing volumes of WiMAX purchaser premise equipment (CPE) shipments and enhancements in production are reducing software costs and lengthening affordability. only some years ago, the CPE cost used to be greater than $300, but these days it is reportedly less than part of that quantity – about $50-150. within the Cayman Islands, Malaysia and the united states, for example, WiMAX operators be offering WiMAX CPEs for $60-one hundred with minimal subsidization.
– WiMAX is a better technology for providing broadband access than HSPA and boasts higher spectral efficiency, a lower cost per bit, as well as lower costs for spectrum and intellectual property rights (IPR). Despite HSPA’s greater scale, WiMAX USB dongles are priced competitively and even less expensive in some cases compared with other 3G USB dongles. WiMAX benefits from having a more centralized ecosystem in which interoperability does not have to take place on an operator-to-operator basis as it does with HSPA. Despite these positives for WiMAX, scale, coverage, roaming potential and the device ecosystem, not performance, determine the popularity of mobile broadband access technologies.