Reality Check: WiMAX on Track to Cover One Billion by EOY 2011

The WiMAX Forum claims that “WiMAX service providers around the globe today have networks covering more than 823 million people (or POPs) in approximately 149 countries and are on track to reach one billion POPs by the end of 2011. This estimate is a growth of 215 million POPs since December 2009 and surpasses the forecasted growth during that time period.”

http://www.businesswire.com/news/home/20110214007389/en/WiMAX%E2%84%A2-Track-Cover-Billion-EOY-2011

But doesn’t everyone think that mobile WiMAX is dead? It can’t compete with 3G/ 3G+ today, and won’t compete with LTE anywhere in the future? How can that view be reconciled with the strong growth predicted by the WiMAX Forum?

We have a couple of reasons to explain this apparent contradiction:

  1. Coverage is not the same as number of subscribers, which depends on the take rate. Especially in developed countries like the U.S. and Europe, subscribers will likely not chose mobile WiMAX, even if its available. Reason is simple- scarcity of mobile devices (smart phones, tablets, eReaders, gaming gadgets, etc).
  2. The growth in WiMAX is coming almost exclusively from the developing countries that have little or no broadband infrastructure. In those countries, fixed WiMAX (even if it uses IEEE 802.16e-2005) is much more cost effective than deploying wireline infrastructure, especially in sparsely populated regions or where take rates will not be very high.

For example, the WiMAX Forum states, “India saw slow WiMAX growth throughout 2010 due to delays in network rollouts. However, over the next year, the WiMAX Forum expects to see strong network growth in India. BSNL (one of the largest Indian network providers) has committed to deploy 20,000 base stations over the next 36 months through the use of regional franchisees. BSNL has established multiple contracted revenue sharing franchisees for urban roll out and service delivery across India. On February 22-23 of 2011, WiMAX Forum and BSNL are jointly hosting the WiMAX Network Deployment Workshop in New Delhi, an interactive event for BSNL’s Franchisees to gain a concrete understanding of the necessary steps involved in deploying a Greenfield WiMAX network.”

We have opined for a very long time that WiMAX success in India would be crucial to the technology’s survival because it is potentially the worlds largest available market (China telcos announced several years ago they would NOT deploy WiMAX). However, we continue to be concerned with India’s creaking bureaucracy and hints of scandals

IBN Live Business reports the 2G scandal may now be spreading to WiMAX. A recent article states, “Former telecom minister A Raja had also tinkered with BSNL’s WiMax deal to provide fixed and mobile Internet access.”

Now, Raja-link surfaces in Wimax irregularities

We were not at all impressed with Mr Raja’s talk (reported in the Viodi View) three years ago at the ICC in Milpitas, CA. At that time, we questioned his abilities as India’s Telecom Minister. He was more interested in talking in Tamil about his family’s adjustment in their move from Tamil Nadu to Delhi. And his subscriber forecasts for WiMAX deployments were not impressive. But he’s gone now, so let’s hope India can move aggressively to deploy WiMAX and satisfy the huge pent up demand for broadband wireless access.

For more information on WiMAX deployments, please visit http://www.WiMAXMaps.org.

0 thoughts on “Reality Check: WiMAX on Track to Cover One Billion by EOY 2011

  1. Good analysis on a press release that, at the surface, seemed like impressive numbers. As you point out, mobile WiMAX’s success will be a function of what happens in India. Your arc of stories, starting several years ago, linking India and WiMAX tell a consistent story.

  2. http://www.WiMAXMaps.org is more of a PR campaign; it shows exaggerated view of the deployments.
    Alan’s remarks are mostly right on! He has been following WiMax story from its inception. India’s WiMax direction is still not certain by any means. Corruptive and closed-room practices in India don’t help WiMax cause. In my opinion, even India (seemingly with its large numbers) cannot carry WiMax alone.

    1. Thanks Basant! I thought the WiMAX Forum press release was more of a PR campaign than realistic numbers you might get from a market research firm.

      NOTE To All Viodi View Readers:

      Basant and I have been friends since June 1973 when I started working at National Semiconductor. We were both in the Microprocessor Engineering group. After that, we worked at 3 different companies together. Basant currently is CEO of Videonetics- a video analytics company based in Calcutta, India.

      http://www.videonetics.com/

  3. A related question: Are network operators making money from their WiMAX deployments?

    In the U.S., Clearwire is certainly having a hard time doing so. The mobile WiMAX network operator recently switched to a wholesale only model (vs both retail and wholesale). The company gained 1.5 million subscribers in the fourth quarter of 2010 and more than doubled its revenue, but lost US$128 million, the mobile WiMax operator announced last week.

    Clearwire ended 2010 with 4.4 million subscribers, up from 688,000 a year earlier. About 1.1 million of those were customers of Clearwire’s own retail service, called CLEAR, while 3.3 million bought service on the WiMax network through partners such as Sprint Nextel and Comcast. The company collects far less revenue from wholesale than from retail subscribers and has previously disclosed disputes with Sprint over that revenue.

    http://www.pcworld.com/article/220055/clearwire_struggles_to_profit_on_wimax.html

    No company can stay in business too long if they keep losing money and Clearwire is no exception to that rule. And Clearwire is the largest WiMAX network operator in the world, having passed Yota in Russia last year. Does that tell you something?

  4. Great article! The WiMAX Forum is a hype machine whose forecasts no one else seems to challenge. Agree, that India will make or break WiMAX as viable technology, but the volumes are nowhere near what chip companies had accepted. Most of the leaders, e.g. Bwceem, Sequans are now emphasizing LTE over WiMAX. Keep up the good work!

    1. Thanks for the kind words about this article. Often wonder if anyone really reads and appreciates the analysis I put into each one.

      Have you read the others dealing with WiMAX in India? There is a long history of delays, stalls and missed results due to the bungling of the Indian government in their 3G and BWA licensed spectrum auctions. And we still don’t know if WiMAX will or another technology will be mainstream for BWA in India! Jury is still out and has been for years!

      You are correct in that previous WiMAX market forecasts were way below actual volume. That causes tremendous problems for start up chip companies that are betting on WiMAX, e.g. Sequans and Beceem, cause the volumes are not sufficiently high to make a decent profit. Hence, they have to shift to another technology- in this case LTE- while still supporting WiMAX for existing chip customers.

      It seems Intel is the ONLY pure WiMAX chip company, but they do NOT sell their WiMAX chips separately. Rather, WiMAX silicon is bundled with uP (e.g. AToM) and sold as a module to their PC OEM customers.

  5. If not WiMAX, is LTE the 4G network of choice? NADA! It’s still 3G/3G+ and here’s proof that LTE mass deployment is not here yet:

    Uncovering the U.S. LTE ‘conspiracy’

    According to Kevin Fritchard who attended MWC in Barcelona: “according to a many of the European media I spoke with in Barcelona last week, LTE is just as long-term as its name implies and Verizon’s heralded early launch of a large-scale LTE network is a marketing myth.

    I’m not kidding here. I heard from several European colleagues—and even an American one—in the press and blogger corps that LTE is still at least a year or two away from every seeing daylight in a live network and that what Verizon Wireless (NYSE:VZ, NYSE:VOD) has deployed is not a “true” commercial LTE network but a limited trail at best. Further, and contrary to published launch dates, these doubters contend that the first LTE smartphones won’t be available until 2012 or 2013.”

    http://connectedplanetonline.com/3g4g/news/uncovering-the-us-lte-conspiracy-0222/

  6. I agree, “coverage” could be larger than subscribers. It could be just people whose homes are within radio range of a WiMAX system.

    Also fixed WiMAX is not competing with cellular (3G/LTE/etc) but DSL/cable/etc. and it’d be interesting to see how it is doing compared to these other fixed broadband alternatives, e.g., as a percentage of the fixed broadband market, is it growing, shrinking, etc.?

  7. Only hope for WiMAX at this time is to compete with DSL, cable modem, or satellite based Internet access. It has lost the mobile Internet battle to 3G/3G+. Is there any market data comparing the 2010 and 2011 numbers for those alternative fixed broadband access technologies?

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