WiMAX industry waits for the other shoe to drop: Vendors keep mobile dream alive with fixed/nomadic deployments

Here are several things you need to know this week about mobile WiMAX:
First, mobile WiMAX is seen by analysts as a larger but riskier global opportunity for vendors, compared to fixed/nomadic WiMAX, which offers a smaller, less-risky and immediate opportunity.
Second, rumors and speculation in the media that Intel Corp. and others may invest additional billions of dollars into a North American entity including Sprint Nextel Corp. and Clearwire Corp. are judged feasible by analysts.
Third, Sprint Nextel just posted a nearly $30 billion loss for the fourth quarter and Intel doesn’t comment on rumors and speculation.
Meanwhile, at least two dozen mobile WiMAX vendors expressed fervid interest in this story, perhaps in light of recent uncertainties over the Sprint Nextel-Clearwire-Intel efforts, as well as hype over Long-Term Evolution, a potential rival.
Sorting through these issues with analysts provided a snapshot of mobile WiMAX’s status and prospects – frozen in the moment, though far from encased in amber for all time.
One upshot, according to analysts, is that mobile WiMAX has become indelibly linked to uncertainty over the Sprint Nextel-Clearwire-Intel effort. But should that complex deal fail to materialize, fixed/nomadic WiMAX is likely to morph over time to mobile WiMAX, which still has a time-to-market advantage over LTE and other next-generation technologies.
Act now
Work in fixed/nomadic WiMAX – largely a digital subscriber line and cable rival now in Russia, the Middle East, Africa and Latin America – can position vendors for mobile WiMAX markets, according to Peter Jarich, analyst with Current Analysis.
“If you can support fixed/portable WiMAX today, you’re not waiting for mobile WiMAX,” Jarich said. “You’re deploying today. Regardless of what happens with Sprint, if you own spectrum in India and there’s an opportunity to make money rolling out fixed broadband WiMAX, you don’t care what’s going on with Sprint.”
As for speculation over additional investment by Intel and, possibly, retail channels such as Best Buy, Jarich said:
“We’ve seen that Intel is committed to making WiMAX a success,” Jarich said. “They really have a big stake in this. Further investment is within the realm of possibility.”
According to analyst Nadine Manjaro at ABI Research, chatter over mobile WiMAX in the U.S. has obscured the burgeoning market for fixed/nomadic solutions worldwide.
“Look at India, for example, where 3G deployment isn’t strong – operators there are looking to deploy WiMAX,” Manjaro said. “They are deploying networks that meet the mobile WiMAX standard, 802.16e, even if they are not deploying those networks in a mobile WiMAX sense. They are looking at WiMAX for data connectivity that they don’t currently have, and it is one of the better, low-cost alternatives. Where Internet-related infrastructure is weak, there’s a demand for WiMAX.”
Awaiting the other shoe
Thus WiMAX vendors are pursuing immediate opportunities, while keeping themselves visible in the market that really matters, according to Alex Green, analyst at IMS Research.
“Once mobile WiMAX takes off, it will quickly eclipse the fixed/nomadic WiMAX market,” Green said.
“An Intel announcement could re-instill some confidence in the market,” Green added. “Quite a lot of people are watching to see how it turns out, especially after six or nine months of negative press on Sprint and its WiMAX plans.”
Manjaro agreed and said she expected an announcement from the Sprint Nextel-Clearwire-Intel camp relatively soon, based on market pressures.
“They don’t want to lose momentum,” Manjaro said of Sprint in particular. “They want to address mobile WiMAX and return their attention to their core business. Partnering lowers Sprint’s capital commitment and that will help its stock value. But right now, Sprint’s ‘burden’ includes iDEN subscriber defections, capital commitments to WiMAX and best use of its spectrum assets.”
Significant questions remain
“In terms of (mobile WiMAX) subscriber-growth projections from Sprint for the next 18 months, their ambitious forecasts are looking somewhat unrealistic,” Green cautioned. “Things have been delayed getting off the ground.”
Will the ecosystem of networks and devices be ready for Sprint Nextel’s scheduled rollout? Is it economically viable to roll out the network and deliver services at a level Sprint Nextel has articulated? Green asked, rhetorically.
Yet the analyst returned to cautious optimism, due to mobile WiMAX’s promise and time-to-market opportunity.
“In the longer term, however, we do expect mobile WiMAX to attract strong subscriber numbers to Sprint’s installed base,” Green said.
For the bevy of vendors plying this market, jumping on WiMAX is a way to position themselves eventually for LTE, Manjaro said, because both WiMAX and LTE are OFDMA/MIMO technologies.
“The message to the market is: if we can do WiMAX, we can do LTE,” Manjaro said.
Forecasts and reality
For Jarich, author of a recent report titled, “Is Sprint Bad for WiMAX,” the current situation offers a chance to reassess his views.
“I got it right that something could go wrong (with a Sprint Nextel-Clearwire deal),” Jarich said. “Where I got it wrong is that, given the broader interest in WiMAX, lots of folks around the globe are looking at the opportunities regardless of what happens with Sprint. Fixed deployments continue. And fixed deployments can eventually support mobile. If there’s an opportunity to make money rolling out fixed WiMAX, you don’t care what’s going on with Sprint.”
Looking for signs
So, apart from a big announcement from the Sprint Nextel-Clearwire-Intel camp, what are analysts watching for?
“If high-profile players such as Google don’t win spectrum in the current 700 MHz auction as a path to realizing their mobile visions, those players may conceivably look at WiMAX as an alternative.”
To Jarich, “little distractions” – something concrete – would be welcome.
“I’m looking for news of the results of Sprint’s trials in Chicago and Washington, D.C.,” Jarich said. “How is stuff performing? When do we move from a soft launch to something harder?”