Last week, we ran a post
about how it was a bad week for WiMAX. Better revise that to "bad month", after also considering two new reports from Strategy Analytics (SA) and Analysys. Just before the American Thanksgiving holiday, SA came out with a report predicting that although "Mobile WiMAX and UMTS TDD will stand out among the alternatives", these would be far outpaced by more traditional voice evolution data technologies like EV-DO and HSxPA
. SA predicts that these Next Gen technologies won't really take off until 2010. In principle, we agree that the vast majority of mobile data needs are met by the standard evolutionary technologies, as people with mobile phones only need to sip at the broadband fountain, not open the broadband hydrant. It is the minority of streaming video users and mobile laptop users that need
Next Gen mobile broadband, but those numbers are growing. Yet that is the big question in developed urban areas: will Next Gen mobile broadband technologies offer enough of an advantage to compete with DSL, EV-DO, and HSxPA? I say yes. From my discussions with commercial UMTS TDD service providers, consumers (the few that have a choice of either) are choosing UMTS TDD over DSL about 40% of the time - not a bad slice. Mobility is a powerful advantage that copper and fiber will never match (unless those Zip-Linq guys make a king-sized retractable cable!) It also doesn't hurt that the TDD subscriptions are available at prices as low as US$20/mo
(but don't hold your breath, this is only in a minority of markets worldwide so far).
So what about Rural areas, or undeveloped regions? Well, a report earlier in the month from Analysys casts a pall on Next Gen prospects there: Analysys says that after suffering at the hands of DSL in urban areas, WiMAX will suffer at the hands of low density of customers, low willingness or ability to pay, and the increasing penetration of DSL to areas where customers actually exist. Analysys says that to seize market share, WiMAX will have to exhibit "spectacular performance"
in order to compete with fixed broadband.
Taken in tandem, these two November reports say that WiMAX will be squeezed by traditional mobile
solutions in developed markets and by traditional fixed
solutions in rural and developing markets. I find both arguments correct, but the conclusions too severe. While I agree that the opportunity for WiMAX is smaller than the industry seems to believe, there is
opportunity for true Wireless Broadband technologies which offer mobility and broadband at a lower cost than the $60-80/mo we see from HSxPA, but these technologies need to deliver on their promises quickly in order to seize the opportunity... and as Analysys says, they need to perform spectacularly.