Wimax still awaiting the tipping points

Adlane Fellah/Maravedis
23 Jul 2008

At the end of March 2008, Maravedis' WimaxCounts research logged nearly two million broadband wireless access/Wimax subscribers. From Q4 2007 to Q1 2008, subscriber quarter-to-quarter growth was 19% and we have noticed the same quarterly growth trend since first quarter 2007. With a residential monthly ARPU of $48.08 and business ARPU of $146.02, this subscriber base generated estimated quarterly revenues of $366.2 million, an increase of 20% with respect to the previous quarter.

There continues to be more residential subscribers than business subscribers, despite operator tendency to focus on business offerings. 65% of the subscriber base is residential vs. 35% business. However, the typical customer mix among operators is 52% business and 48% residential. This split did not change from the previous quarter. North America was the region with the higher residential customer base with 78% residential and 22% business.

Approximately 64% of the operators covered by WimaxCounts have commercially launched BWA/Wimax; 23% are currently deploying the network or testing Wimax; and the remaining 14% either have idle spectrum (10%) or have returned/lost the right to use the spectrum (3%). There were various operators that planned to launch during the first quarter of 2008 and postponed their commercial launch until later this year, such as Global Mobile (Taiwan), which plans to launch in early 2009 and Sprint Nextel which initially planned for a commercial launch of Xohm in April this year.

One of the most important events that occurred during the first half of 2008 was the definitive agreement signed between Sprint Nextel and Clearwire to combine their respective wireless broadband and Wimax businesses. Sprint will contribute its 2.5 GHz spectrum assets to the venture. The new entity hopes to provide coverage to 140 million POPs by the end of 2010. Maravedis believes this coverage will be reached towards 2015 at the earliest. It is expected that the transaction will be completed in fourth-quarter 2008. This will considerably impact the future of Wimax in the US The new entity hopes its head start and spectrum position will help it become the strongest 4G operator compared to those in the LTE camp.

There continues to be more certified 802.16-2004 deployments than mobile and proprietary deployments. We have seen, however, an increasing interest from operators in the mobile version of Wimax. During this quarter we accounted for 88 deployments using certified 802.16-2005 equipment as compared to 74 in the previous quarter; 106 deployments in the 801.16-2004 standard as compared to 105 in fourth-quarter 2007, and 54 proprietary deployments as compared to 64 in the previous quarter. We attribute the decrease of proprietary deployments mainly to operators upgrading their networks to offer Wimax either in its fixed '16d' or mobile '16e' versions.

There are operators that have hybrid networks that are deploying a combination of proprietary and certified equipment. New operators that signed agreements this quarter to deploy mobile Wimax networks include Axtel (Mexico) with Motorola, Embratel (Brazil) with Motorola, BSNL (India) with Soma Networks, VTR (Chile) with Motorola, and VTEL (Georgia) with Alcatel Lucent, among others.

The largest mobile Wimax deployments reported in Q1 2008 were from Korea Telecom with nearly 150,000 subscribers and Wateen Telecom (Pakistan) with more than 10,000 subscribers at the end of that quarter. Wateen is today the largest mobile Wimax Motorola deployment. In June 2006, Wateen placed an order for 198,000 CPEs from Motorola. Motorola has shipped 60,000 CPEs so far.

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