December 08, 2006
Analysys: Place Your Bets on Fixed Broadband and Cellular, Not WiMAX
By Mae Kowalke, TMCnet Contributor
Of late, particularly in Asia, carriers and governments have expressed interest in the potential of WiMAX
technology to deliver wireless broadband services across large geographic areas. WiMAX shows potential for both satisfying the demands of customers and helping providers generate revenue.
technology to deliver wireless broadband services across large geographic areas. WiMAX shows potential for both satisfying the demands of customers and helping providers generate revenue.But in a recent report, research firm Analysys threw some cold water on the attraction of potential financial returns from WiMAX. Careful examination and modeling, the report says, shows that a secure, long-term business case cannot be made for WiMAX in most situations.
. Careful examination and modeling, the report says, shows that a secure, long-term business case cannot be made for WiMAX in most situations. “WiMAX operators and investors will have to select their targets with extreme care,” report author Alastair Brydon warned in a statement. “Small returns in many situations, from low ARPU or take-up, make high up-front investments in network infrastructure, marketing and customer premises equipment (CPE) highly risky.”
Developing countries where the penetration of fixed network infrastructure is low may seem like appealing targets for WiMAX, the report further cautions, but that appeal may be misleading.
That’s because in such countries disposable incomes and the penetration of PCs—both elements necessary for the success of WiMAX services—are also low. In these areas, cellular services also are a major competitor and do not face the same barriers.
Ah, but what about rural areas, another location where WiMAX often is championed? Here, too, Analysys is pessimistic. Because fixed operators are quickly extending the reach of DSL, even opportunities to establish a foothold for WiMAX in the boonies will be few and far between.
, even opportunities to establish a foothold for WiMAX in the boonies will be few and far between. In short, the Analysys report sees fixed broadband and cellular services as offering very stiff competition for WiMAX—so stiff that in most cases its not worth the fight.
“Developing markets are often cited as the prime opportunity for WiMAX networks, but voice telephony will be important to end users in these markets and cellular services have already gained a strong foothold, fuelled by the availability of cheap handsets,” report co-author Mark Heath said in a statement.
Heath added: “Furthermore, WiMAX businesses in rural areas of developed markets will face serious difficulty if DSL subsequently becomes available.”
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Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page. Also check out her Wireless Mobility blog.
