WiMAX is currently seizing and will grow into a multibillion-dollar fixed and portable wireless market, regardless of its fortunes in the mobile cellular market. 802.16e vendors may or may not capture a sizable portion of the mobile market opportunity, but that is hardly the end of the story.
WiMAX now is primarily replacing sales of proprietary broadband wireless access gear. It has not elevated growth in the fixed wireless industry beyond pre-WiMAX trends, as the sales of formerly leading BWA vendors and now WiMAX vendors indicate. WiMAX sales are expanding at roughly the same rate that was expected from sales of proprietary BWA equipment. Growth in WiMAX equipment now remains above 40% annually in both value and units.
Wave2 devices a catalyst
We believe the addition of Wave 2 enhancements is the first step to increasing overall growth in the fixed WiMAX market. Further cost reductions will provide more growth, but MIMO-equipped Wave 2 devices may prove to be the stimulus that drives WiMAX and 3.5 GHz network deployments as it provides substantial gains in performance over single input, single output versions of WiMAX.
Despite nearly three years of publicity and pushing, mobility remains a small portion of WiMAX equipment sales and adoption. Digital subscriber lines and cable modem replacement applications in the 3.5 GHz band are driving the WiMAX market today.
Critics allege 802.16e lacks the technical capabilities of Long Term Evolution, and Ultra Mobile Broadband, particularly in regards to spectral efficiency, mobile voice support, and uplink budget, and they often view 802.16m as an attempt by 802.16 proponents to solve limitations of mobile WiMAX that will lag behind LTE and UMB in availability.
Competition in the 2010-2012 timeframe
But, we believe these problems will be long resolved when the real mobile opportunity arrives. Carriers who might have deployed 802.16e will pursue additional HSPA and EV-DO network upgrades over the next three years, suggesting that the real competition for next-generation mobility will occur in the 2010-2012 time period and fall between 802.16m and LTE. Qualcomm Inc’s UMB will also be a player.
Currently, a large swath of mobile WiMAX spectrum does not exist in many markets. Key WiMAX proponents continue to lobby for the freeing up of 2.5 GHz band allocations throughout the world, with some success in Western Europe. The same group is also looking to free up 700 MHz spectrum in certain markets, such as the United States.
Nonetheless, the world is without WiMAX specific bands and the International Telecommunications Union’s acceptance of WiMAX as an IMT-2000 band will not remedy this since most ITU-2000 specific bands are already inhabited by other technologies.
In a few more years there will be spectrum available and 802.16m will address the shortcomings of today’s mobile WiMAX. It will be published by a more open standard body than 3GPP or 3GPP2 and will reach market at roughly the same time as LTE.
Sprint Nextel Corp.’s planned deployment of WiMAX within North America could tilt the market in favor of mobility applications sometime in 2008, but we expect this particular migration to occur in 2009 and 2010.
We see the overall WiMAX market doing well, with mobile contributing an unknown amount of gravy.
Visant Strategies principals Andy Fuertes and Larry Swasey have been covering emerging technology since 1985. Fuertes has written wireless research reports for the past dozen years. Swasey has published dozens of wireless research titles and has been covering the wireless technology markets since 1985 and the wireless infrastructure market since 1996. For more information go to www.visantstrategies.com.
