Alvarion, one of the big names of the Wimax bubble, may exit that business, a move which would leave it focused for growth on its recent moves into carrier Wi-Fi with its Wavion acquisition.
Announcing first quarter results which highlighted the challenges, new CEO Hezi Lapid said Alvarion was exploring "a variety of options for the carrier licensed business”. The unit, which focuses on Wimax since the vendor apparently left its LTE developments behind, has "significant and valuable assets”, Lapid said, and insisted “every alternative we are evaluating will provide continuity of products and services to our customer base."
The Israeli firm always faced a difficult balancing act. When the major OEMs piled into Wimax around the middle of the last decade, it lacked their scale, but was too big – and had too large a proprietary legacy base to support – to attract acquisition.
Although several big vendors have cooled on Wimax, Alvarion has still had to fight against Samsung, Huawei and ZTE, but has lacked the LTE migration program which has driven those suppliers' efforts. Yet it has still been supporting a legacy broadband wireless base which has often proved reluctant to migrate to a standards-based solution, and this has limited its agility to target specific opportunities or niches.
Alvarion's exit would be a blow to remaining confidence in Wimax, though it would leave more of the surviving business to other players. These are split into two categories. There are the major Asian vendors which are using their Wimax businesses as springboards into TD-LTE and 4G migration projects with large carriers. Samsung, Huawei and ZTE have all gained such deals with operators such as Clearwire and Reliance.
And there are specialist suppliers like Airspan, which is evolving a Wimax platform towards LTE and small cells; or NewNet, which recently acquired the Wimax business which Nokia Siemens had inherited with its own purchase of Motorola Solutions‟ wireless networks unit. These will often be targeting 802.16 at traditional broadband wireless markets as well as verticals such as smart energy or transportation, where Wimax still has a role to play.
If Alvarion does pull back, it will intensify an existing refocusing effort, concentrating growth plans on carrier Wi-Fi and DAS (Distributed Antenna Systems), both sectors where it has made acquisitions. However, Wimax still contributes about 50% of the company's revenues, and that money is needed to expand the newer businesses, so the timing could be poor for a crisis of confidence among the Wimax base. As Ed Gubbins of Current Analysis wrote in a client note: “Existing Wimax customers may be spooked by the company's statements about potentially divesting the business, thus exacerbating the company's financial woes.”