There's life yet in Wimax

Robert Clark
15 Mar 2010

In Taipei last week to see Vmax turn on its network I chatted to a former mobile executive about Wimax.

“I just don’t see a business case,” he said. “When I talked to those guys I don’t think they really believe in it.”

It’s true that Wimax operators will never prosper going head-to-head with mobile.

And it’s probably true there isn’t a single business model. But the strength is its ability to deliver low-cost bandwidth, which means several different business models are opening up.

For example, Russian carrier Yota is hawking bandwidth combined with music and video downloads, claiming last October it had reached operational break-even after five months.

The new Taiwan operator Vmax is putting Wimax-connected terminals in the back seat of taxis. It doesn’t do much for me either, but CEO Teddy Huang claims it is getting enough advertisers to bump up ARPU to above the local average of NT$500-NT$600 ($15.80-$18.90)

Huang told a media briefing that Vmax also thinks it can sell satellite news gathering services for the media and a giving tourists an alternative to hotel broadband charges.

He’s also eyeing data offload for mobile broadband networks – and that’s possibly much the source of Wimax’s biggest opportunity.

In Japan, Masayashi Son, the creative boss of Softbank, has taken a take in troubled PHS player Willcom in order to get at its Wimax-friendly 2.5 GHz.

Son has spoken in the past of the limits of mobile broadband and evidently sees a business despite the presence of an existing Wimax network, built by UQ Communications (which, like Vmax is invested by Intel).

Which isn’t all to say the Wimax’s profitability is guaranteed. Its business is niche, or multi-niche, and it will have to compete with LTE for investment.

Mobile Wimax users at Clearwire, the US carrier that has bet big on the technology, are consuming a staggering 7GB in data each month.

But blogsite GigaOm notes that Clearwire is fudging on whether it will continue building with Wimax past 2011 when its agreement with Intel expires.

An LTE-Wimax hybrid seems the most likely outcome. Wimax won’t be front and center of the business, but seems will be run in parallel, soaking up some of the expected flood of mobile data.

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