WiMAX as a technology is suffering from bad press at the moment. It is fair to say that WiMAX as a broadband technology faces stiff competition from both the cellular and fixed sectors, especially in developed countries. Many argue that the likely outcome for WiMAX is to be crushed, with an ever-decreasing market share, between cellular and fixed monoliths.
However, this argument focuses on the delivery of wireless broadband as the single measure of the health of WiMAX, now and in the future. The outlook for WiMAX is far from being so depressing. In fact, in the last two years WiMAX has found its way into a number of applications that play to its strengths.
- Backhaul. WIMAX offers an efficient and cost-effective backhaul solution. Compared with more conventional solutions, the small size of the WiMAX unit, its relatively low cost, ease of deployment, high spectral efficiency (‘more bits for your hertz’) and ability to operate in licence-exempt spectrum are distinct advantages.
- WiMAX in the last mile. In developing countries, where the reach of fixed is poor or non-existent, the WiMAX last-mile proposition is strong. Given roll-out times defined in months, rather than years (compared with fixed), and an ability to quickly and cost-effectively cover difficult terrain, the technology’s benefits are clear. We forecast that developing regions will account for 92% (at least 90 million) of global WiMAX customers by the end of 2015. Even in developed countries, WiMAX arguably has a role to play in extending the reach of broadband to areas where the quality of the fixed infrastructure is not good enough to deliver the data speeds required by triple-play services. In this application, however, WiMAX will feel the competitive pressure of cellular and fixed.
- Campus coverage. There are other emerging applications, like outside broadcasting and emergency or incident coverage. WiMAX offers similar benefits to both these applications: high-speed, mobile data connection for video backhaul to a central hub. There are many other campus-like applications that require flexibility of deployment combined with mobility and high data rates.
Together, these applications have created a vibrant and growing WiMAX market, with over 150 deployments worldwide and plenty of room for growth. In most cases, these complement the cellular and fixed markets.
While WiMAX has created a ‘long tail’ of applications in the last two years or so, we predict that its future will be quite different. In the next few years, the development of IMT-Advanced technologies such as LTE and WiMAX 802.16m will erode most technological differences between them. Head-to-head competition is then probable. Unable to sustain the competition, the market is likely to go through a period of consolidation, significantly reducing the number of vendors. Mergers and acquisitions will gather together WiMAX and UMTS technologies under the roofs of fewer vendors, so that most vendors will have a combination of both. Various product lines will be dropped or absorbed. We have already seen evidence of this when Nortel and Alvarion announced a joint mobile WiMAX solution, in June 2008: Nortel indicated that this will allow it to focus its R&D efforts and spend on LTE. As we come out of this period of consolidation, vendors will position the various technology options against likely markets. The division between WiMAX and LTE will be blurred and the vendor will view them as design variants optimised for different wireless applications – cellular, backhaul, broadband, etc.
In many ways, this will work to the advantage of WIMAX. Rather than being squeezed out of the market, it will be absorbed and offered by vendors as part of a suite of technology solutions.
The future of WiMAX will not be dictated by which technology is the best – it will depend on which companies survive and which has the strongest brand.