Asian 4G developing rapidly but in fragmented pattern

By Caroline Gabriel

The pattern of wireless deployments has always been far more varied and fragmented in Asia than in the more homogeneous Europe, and mobile broadband is no exception. As the Indian BWA auction rumbles on, with WiMAX and TD-LTE bidding for a place in the wireless picture, Thailand looks set to leapfrog 3G altogether, Korea is expanding the reach of WiMAX, and Indonesia aims to become a tier one country in terms of fast wireless.

Thailand’s regulator, the National Telecommunications Commission (NTC), says it will skip over the 3G stage and will instead allocate the 2.1GHz band, usually used for UMTS, for next generation technologies. The auction will be held before the end of the year, NTC commissioner Pana Thongmeearkom told Dow Jones, offering three licenses for 15MHz of spectrum. This is an increase on the previous plan to offer just one 15MHz slot plus two of 10MHz each, reflecting the greater bandwidth needs of new mobile data services (though many argue that operators really need at least 40MHz to make WiMAX or LTE deliver their full potential).

‘3.9G technology’, as Pana calls LTE and WiMAX, is “a more advanced technology than 3G, that is based on the 2.1GHz frequencies but allows much faster data transmission which would provide greater benefit to consumers,” he said. The regulator will stay technology neutral as to LTE or WiMAX, though analysts expect the most aggressive bidders to be the existing three cellcos - AIS, DTAC and True Move - which have expressed interest in LTE. Delays in the original 3G auction process made Thailand one of the last countries in south east Asia to open the way to 3G or beyond.

Further south in Malaysia, the country’s largest WiMAX operator, Packet 1, has announced that Korea’s SKT is to pay $100m for a 25% stake in the firm. P1, part of publicly listed Green Packet, has signed more than 175,000 subscribers since its launch in August 2008.

The Korean carriers, SKT and KT, were the first to offer commercial Mobile WiMAX services, initially using a local variant called WiBro (which is now being harmonized with international channel plans). Their services were slow to take off but they have recently revamped their plans, helped by new rules on channelization and MVNO deals, and SKT has resurrected earlier plans to use its WiMAX expertise to build a power base in its region. By acquiring spectrum or stakes in operators, it aims to increase its influence and  purchasing power using a technology in which Korea has significant IPR.

In its statement, SKT said the investment was to take advantage “the huge growth potential” of the Malaysian market. It will use its P1 partnership to help build a business in fixed/mobile services across south east Asia, particularly targeting businesses and corporate travelers. This strategy, which it dubs Industry Productivity Enhancement (IPE), is targeted to make $16bn in revenue by 2020 and will involve a range of partnerships and technologies. Green Packet has Malaysia’s only nationwide WiMAX license, in a country that has been very aggressive about the technology (and does not have LTE on the horizon). The company also has a license in Singapore and aims to acquire further spectrum across the region.

Indonesia would be a logical focus for the ambitions of SKT and Green Packet, given its huge population and mobile growth rates. However, its progress towards 4G has so far been erratic, and held up by regulatory decisions - notably to mandate the fixed WiMAX standard, 802.16d, for the 2.3GHz and 3.3GHz bands. There are eight license holders but they are lobbying for the mobility restriction to be removed. The country’s operators also want the regulator, Postel, to accelerate the process of removing spectrum in 2.5GHz from satellite broadcasters and making it available for WiMAX or LTE. If this proves problematic, Postel is also studying a similar approach to Thailand - opening up further spectrum in the 3G band, or refarming current holdings, to support 4G.

Nokia Siemens recently demonstrated LTE in capital Jakarta and the three cellcos, Telkomsel, Indosat and XL Axiata, have submitted proposals for deploying the technology, should spectrum become available by 2013.

Of course, one of the most important future markets for new technologies will be India, because of its huge pent-up demand for broadband and mobile services. The auction of the 2.3GHz BWA spectrum is underway, though there will only be two licenses for private operators, in addition to one held by state-owned BSNL and MTNL. Many operators say this is inadequate, and they will need more spectrum soon. The call is led by the major cellcos, like Bharti Airtel, that failed to get nationwide holdings in the 3G band, and may miss out on a BWA license. These players want regulator TRAI to accelerate its promised consultation on clearing the 2.5GHz band and opening it up for LTE or, in its TDD portion, WiMAX. In 2.3GHz, which is TDD-only, WiMAX is being deployed by the state carriers, but Qualcomm is bidding to try to get TD-LTE a place in the band too.

On Friday, 24 rounds of bidding had been concluded, with total bids reaching INR157bn ($3.4bn) or $1.13bn per national license (BSNL/MTNL will pay for theirs retrospectively, according to the market price, although they got early access to their spectrum.) The prices are well over double the reserve price of INR17.5bn per slot.

4G WORLD 2010 - Empowering Mobile Networks, Applications & Services

By Kate Walsh

Since our inaugural event in Chicago last September, we have seen a rapid acceleration of announcements for 4G deployments globally. At last count, there are more than120 operators worldwide who have committed to either LTE or mobile WiMAX.  In addition to the mobile broadband technology adoption of 4G, there is a vast ecosystem of participants also entering this market to serve the broader network, software and application needs of operators deploying these networks.  Indeed, that is exactly the theme of this year’s 4G World: Empowering Mobile Networks, Applications and Services.

The 4G World 2010 conference program runs four days, and is the largest program in the world focused on 4G. 4G World 2010 is expected to draw more than 10,000 attendees, up from about 8,000 in 2009. This year we have greatly expanded our program partner participation.  4G World 2010 includes broad industry support from across the entire ecosystem of operators, vendors, analysts/researchers, associations and media channels.  In all, we expect to have more than 250 sponsors and exhibitors participating, as well as more than 150 members of the press.

4G World Conference Program Update

This year we are pleased to announce our early line-up of business leaders who together are paving the path towards 4G.  These include executives from Sprint, ATT, Clearwire, KDDI, T-Mobile, MetroPCS, Ericsson, FCC, nPhase, Samsung, Motorola, Nokia Siemens, Alvarion and Huawei.

Here’s a quick summary of our very active program development partner programs that we have in store.

The first day of the program (Monday, Oct 18) will feature partner summit and training programs, including:

• The 16th Annual WCAI International Symposium: WCAI’s program will span three days of the event, with one track running all day on Monday, and then additional 1/2 day tracks which will run on Tuesday and Wednesday. The WCAI will also host an International Operator breakfast.

• We are very pleased to announce that Light Reading will be hosting a special summit on Monday as well, entitled the “Backhaul Strategies and Core Convergence for Mobile Operators Summit”

• Continuing from last year, our training partner, Awards Solutions, will be running several training courses, including an LTE Overview course on October 18-19, an LTE Advanced Course on October 20, and an IP Backhaul Course on October 21.

• The Telemanagement Forum, who is the leading industry association dedicated to operations systems support (OSS) communication management issues, has also joined the event, and will host two training programs entitled “Frameworks Distilled” and “Business Process Framework Distilled”. See below for more on the Telemanagement Forum’s participation at 4G World

The main 4G World conference program, which runs from Tuesday to Thursday, Oct 19-21, 2010, includes key alliances with a number of industry associations and media channels.

• On Tuesday, the Femto Forum will be hosting a ½ day track entitled Femtocell Market Assessment

• On Tuesday and Wednesday, 3G Americas will be hosting the 4G Technology Track

• On Tuesday, the Telemanagement Forum will be hosting the 4G Operational Transformation Strategies and Tactics Track

• On Thursday, Forbes magazine, who will be producing a special supplement entitled “Harnessing the Mobile Internet” (named after my book published late last year), will run a special panel on the same topic. This supplement will alone reach about 1M direct subscribers of Forbes magazine, with an extended reach of almost more than 5M readers. If you are interested in learning more, please let me know.

4G World Expo Update

In addition, we have expanded the 4G World Expo, the largest focused expo of its type in the world, which will run Tuesday and Wednesday, with more than 140 exhibitors. The 4G World Expo will include:

• 4G Technology Solutions Theater

• China and Taiwan Pavilion

• Special pavilions developed with other media partners to be announced shortly

• 4G World Innovator Awards Announcements

• 4G World Internet Café & Networking Hub

• 4G World Expo Press Tour

• Additional networking breakfasts and special events

4G World Marketing and Additional Special Media Promotion Programs

This year, 4G World will use direct marketing, print brochures and expo passes, magazine advertisements, online advertising and direct emails supported by our 250+ global partner marketing programs partners, and other special marketing promotions listed below.  In total, 4G World to be marketed to more than 9M business and technology professionals globally.

4G Business and Technology Magazine: We have a number of other exciting marketing plans in place, including the second annual “4G Business and Technology Magazine” which is co-published with Penton’s Connected Planet. This publication will be printed and distributed at the show, and will reach 250K qualified readers through an aggressive dedicated marketing effort between Yankee Group and Penton.

“Harnessing the Mobile Internet” Advertising Supplement to published by Forbes magazine: Forbes will be producing a special supplement entitled “Harnessing the Mobile Internet” (named after my book published late last year). This supplement will reach about 1M direct subscribers of Forbes magazine, with an extended reach of almost more than 5M readers. If you are interested in learning more, please let me know.

For the latest updates, see:

• Event Overview - http://4gworld.com/home/4g-world-overview/
• Program & Partner Overview - http://4gworld.com/program-overview/
• Program At a Glance - http://4gworld.com/full-program/monday/
• Sponsors & Partners - http://4gworld.com/sponsors-partners/
• Exhibitors - http://4gworld.com/sponsors-partners/exhibitor-sponsor/
• Executive Advisory Board - http://4gworld.com/home/advisory-board/
• Telemanagement Forum Training: http://4gworld.com/2010/04/tm-fourm-training-courses/
• Awards Solutions Training - http://4gworld.com/program-at-a-glance/training/

See you at the Show!

All in all, 4G World is shaping up to be a very exciting event, and I look forward to your participation, and meeting you at the show.

Sincerely,

Eliot Weinman

Conference Founder and Chair

President, Events Division of Yankee Group

LTE devices - soon to be in hand?

By Andrew Mitchell

It was hardly a year ago at CTIA Wireless 2009 that Samsung revealed the Mondi, their first mobile Internet device (MID) for mobile WiMAX.  The Mondi was the manifestation of a long-anticipated device for the Clear WiMAX network.  A year later, the anticipation is shifting to LTE devices.  CTIA Wireless 2010 attendees will no doubt be pushing for a glimpse, a word or a whisper of up and coming LTE devices and especially a smartphone or MID. 

More than 70 operators from around the globe are either deploying, undertaking trials or have announced plans for LTE.  One of those 70 operators in the US is Verizon.  Dick Lynch, Verizon Communications CTO announced at Mobile World Congress 2009 that the company would proceed with Alcatel-Lucent and Ericsson as vendors in their initial deployment.  At MWC 2010 Lynch said their plan is on track and that deployments in 25 to 30 cities would be completed in 2010.  But completing deployments is just part of the LTE challenge; what about the devices?

The need for an LTE-capable MID or smartphone is clear (absolutely no pun intended here!) however in Verizon’s case such a device won’t be immediately available in 2010 market launches.  Anthony Melone, CTO of Verizon Wireless explained in a recent Wall Street Journal article that handsets will be available 3 to 6 months after service launch or mid-2011.  Initially the only devices available will be USB dongles, a number of which are currently being evaluated by Verizon.

HTC announced late last year that it would be supplying China Mobile with a TD-LTE handset for test at Expo 2010 Shanghai, which is now just a little over 6 weeks away.  Also, 4G chipmaker Sequans Communications announced yesterday that it too will be providing a TD-LTE device for the test network.  Working with partners Motorola and Alcatel-Lucent, the first Sequans LTE product, the SQN3010 will power an LTE band class 40 USB dongle.

So what vendor’s LTE devices might we expect to hear or see at CTIA?  Will it be Samsung, who announced last year that it would be producing a handset for MetroPCS’s LTE network, which has been slated to launch in late 2010?  Will it be Kyocera, who also announced late last year that it would be developing LTE-capable Android-based phones in 2010 and 2011?  Cox Communications, completed LTE trials in San Diego and Phoenix earlier this year and it is widely expected that Cox will soon announce plans for deployment.  Cox worked with Alcatel-Lucent and Huawei for the trials - will we learn who a potential device partner could be?

Despite being on the heels of MWC, there’s still plenty of anticipation of exciting news and cool new products for CTIA.

WiMAX Poised for Portable Broadband Success

By Andrew Mitchell

By Dr. Philip Marshall, Ph. D., Senior Research Fellow, Yankee Group Research

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Bolstered by an improving economy and a more suitable marketing plan, global WiMAX subscriptions are expected to grow from 3.9 million today to 92.3 million in 2015.

What happens when you take a strong wireless technology like WiMAX, introduce it with great fanfare and then slam it with a poor economy, slow spectrum licensing and incorrect positioning in the marketplace? Just exactly what happened to WiMAX worldwide over the past year or so.

Previously, Yankee Group forecast that in 2008, global WiMAX subscriptions would hit 3.8 million. In reality, that number won’t be reached until year-end 2009, primarily because WiMAX has been hit with a veritable tsunami of constraints. In addition to a deep, worldwide economic recession and the collapse of the credit markets, WiMAX last year faced slower-than-expected spectrum licensing, especially in areas with huge subscriber potential like India and Indonesia. And as if the economic crisis wasn’t enough to dry up investment dollars, WiMAX also saw a crisis in investor confidence due to its mismatched positioning against 3G and advanced 3G technologies like LTE, HSPA and HSPA+.

What’s Weighing WiMAX Down?

Flawed market positioning is the biggest gating factor for WiMAX, as providers and regulators continue to place WiMAX in the mobile broadband space versus the portable broadband market.  Yankee Group defines “portable broadband” as a service that is available for stationary or pedestrian use within limited network coverage areas. “Mobile broadband” services, by contrast, are available over wide coverage areas and support continuous connectivity at vehicular speeds. For the most part, WiMAX and portable broadband are best suited to unserved and underserved markets, whereas 3G and advanced 3G technologies tend to flourish in the mobile broadband arena, where legacy technologies abound.

But when WiMAX first hit the scene in 2004, its primary aim was to disrupt the mobile broadband market, which had a less-than-stellar track record, especially in terms of price, performance and reliability. Since then, however, the mobile broadband industry has pulled its act together and accelerated the development of 3G, HSPA, HSPA+ and LTE. Now, with its 3G competitors in more of a position of strength technology-wise, WiMAX has less of a story to tell-and less of a compelling business opportunity-in the mobile broadband space.

The fact is WiMAX isn’t especially suited to mobile broadband. Its high-performance radio technology and end-to-end all-IP architecture does, however, shine in green-field fixed and portable broadband applications-a market it is just now beginning to address in earnest. While we assume the mobile broadband market will be dominated by technologies like HSPA, HSPA+ and LTE, the portable broadband market-an area of rapid growth especially in emerging EMEA markets like Central and Eastern Europe and Africa-is WiMAX’s for the taking.

Over the next few years, as the gating factors begin to ease, Yankee Group believes WiMAX is poised to take off. In fact, we forecast that WiMAX subscriptions will grow from 3.9 million today to 92.3 million in 2015, a CAGR of 69 percent (see Exhibit 1).

Exhibit 1: Global Subscription Forecast for Mobile WiMAX Technology

Source: Yankee Group, 2009

Some Like It Mobile

While the lion’s share of WiMAX’s predicted increases will happen in the portable broadband segment, there are notable exceptions to the rule. For example, service providers in the U.S. (in addition to Japan and Korea) are taking a relatively aggressive stance targeting WiMAX toward mobile applications.

In North America, WiMAX activity is dominated by Clearwire, which aspires to deploy a nationwide WiMAX network in the U.S. in the 2.6 GHz frequency band and provide 4G services to its strategic partners, including Sprint and Comcast. Clearwire is in the process of upgrading from a proprietary technology to mobile WiMAX (802.16e), and to date, it offers commercialized mobile WiMAX service in Atlanta, Baltimore, Las Vegas and Portland, Ore., with aggressive plans to launch additional markets through 2009 and 2010. Combine Clearwire with upstarts DigitalBridge Communications and Xanadoo, and the North American market is well-served by WiMAX players.

Another impetus for WiMAX growth in the U.S. market is the American Recovery and Reinvestment Act of 2009, which earmarks $7.2 billion to broadband-related projects. With these factors in mind, Yankee Group projects that WiMAX subscriptions in North America will increase from 1.0 million in 2009 to 13.4 million in 2015, a 53 percent CAGR (see Exhibit 2).

Exhibit 2: Robust Growth in North America as WiMAX Penetrates Residential Broadband

Source: Yankee Group, 2009

Slow Going in Asia-Pacific

In contrast with North America, the Asia-Pacific region is growing more slowly in terms of WiMAX subscriptions. While it presents tremendous opportunities for WiMAX, particularly in areas like India and Indonesia where there is low broadband penetration, licensing issues are a major stumbling block. For example, our forecast does not account for WiMAX subscriptions in the 2.6 GHz (BWA) band in India because of the continued delay in licensing. Plus, WiMAX has been incorrectly positioned to compete with technologies like HSPA and LTE in the region, resulting in heightened political antics and protracted timelines for spectrum licensing in many markets. In addition, it is unlikely WiMAX will see meaningful adoption in China, where the service providers have embraced TD-SCDMA and LTE TDD.

We do, however, expect that licensing of the 2.6 GHz band-which is most suited to WiMAX-will occur during the forecast period, freeing up WiMAX providers to address this burgeoning market. With that in mind, we project WiMAX subscriptions in Asia-Pacific to increase from 0.5 million to 40.4 million between 2009 and 2015, representing a CAGR of 102 percent over the forecast period (see Exhibit 3).

Exhibit 3: WiMAX Gets Off to a Slow Start in Asia-Pacific
Source: Yankee Group, 2009

EMEA Leads the Way

While Asia-Pacific holds the most potential, the region of the globe set for the most dramatic WiMAX growth is EMEA. Our forecast predicts that WiMAX’s strongest adoption will occur in emerging markets in EMEA, particularly in Central and Eastern Europe and in Africa. Investments in Africa are accelerating, particularly with the implementation of several undersea cables and the freeing up of capital markets. We see slow progress for WiMAX in Western Europe, however, because most of the service providers are subscale with networks operating in the 3.5-3.8 GHz bands. We believe that this will remain the case until significant 2.6 GHz frequency bands are auctioned and future acquirers of TDD licenses in Western Europe are required to embrace WiMAX.

Taking these factors into consideration, Yankee Group projects WiMAX subscriptions in EMEA to increase from 2.1 million to 33.9 million between 2009 and 2015, at a CAGR of 59 percent (see Exhibit 4).

Exhibit 4: WiMAX Demand in EMEA Driven by Emerging Markets
Source: Yankee Group, 2009

WiMAX Languishes in Latin America

Perhaps the best example of market positioning hobbling WiMAX adoption is found in Latin America. Not only is spectrum scarce-particularly in the optimum 2.6 GHz band-but in this 3G-heavy environment, many investors view WiMAX as a “dead” technology and are shying away from making necessary capital investments. In addition, many urban centers across the region already offer speeds in excess of 2 Mbps, leaving WiMAX with few ways to differentiate itself. As a result, WiMAX across Latin America tends to be relegated to rural regions that are of less priority to major service providers.

Even with such constraints, however, Yankee Group sees WiMAX subscriptions in Latin America increasing from 0.3 million to 4.7 million between 2009 and 2015, a CAGR of 59 percent (see Exhibit 5).

Exhibit 5: WiMAX Growth in Latin America Truncated Relative to Broadband Demand
Source: Yankee Group, 2009

Getting There

The global WiMAX market is notoriously difficult to forecast, primarily because it relies on a range of interdependent factors, any one of which can work to stifle demand and service proliferation. To reach our forecast of 92.3 million worldwide WiMAX subscriptions by 2015, several economic, regulatory and technological barriers must be overcome. But we are already seeing signs of progress-particularly in terms of an improved economy and more savvy market positioning.

To gain widespread adoption, WiMAX must gain greater industry support-particularly from regulators and investors. We believe this support depends on WiMAX establishing itself as a compelling portable (as opposed to mobile) broadband solution, particularly in emerging markets.  But as long as WiMAX continues to be erroneously pitted against 3G and emerging 3G technologies like HSPA, HSPA+ and LTE in the mobile broadband space, the mobile broadband community will create regulatory and technical roadblocks to stifle the success of WiMAX in the marketplace.

In addition to improved market positioning, regulatory easement in major markets such as India and improved investor sentiment in regions like Latin America are critical for WiMAX to gain meaningful market scale and sustained industry support.

And a little success trumpeting wouldn’t hurt either. In addition to appropriate market positioning for WiMAX, we believe it is contingent upon incumbent WiMAX operators to demonstrate and promote their market successes with the aim of improving confidence among regulators and investors.

WiMAX is a strong wireless technology with a compelling story to tell, especially in the portable broadband arena. Once it overcomes these few market barriers, the technology is indeed poised for global success.

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New licenses and MVNO deals mark a new start for WiBro

By Caroline Gabriel

Korea has often been the showcase for new broadband services, but was WiBro a step too far? Uptake of the mobile broadband service has been 97% short of subscriber take-up, say official sources, but undeterred, the government is to issue new licenses in a framework that should support more modern business models, and bring WiBro into line with the more rapid progress of various carriers using its close cousin Mobile WiMAX.

Off-standard technology imposed by a government is rarely a recipe for success (compare China Mobile’s TD-SCDMA), but the next iteration of WiBro should be close enough to mainstream WiMAX (much of the Korean work was incorporated into the 802.16e standard) to improve roaming and allow Korean carriers to participate in the growing international ecosystem. Samsung, with devices like its Mondi MID, is a particularly important bridge here.

More importantly, though, the WiBro operators need to be adopt the kind of new-look business models that will really spur return on 4G investment. These - as seen at pioneers like Clearwire and UQ Communications - include open web applications and multiple MVNO partners to take full advantage of the capacity and all-IP nature of the new technologies. And successful operators will be prepared to risk some of their traditional revenue streams in search of new ones, something the Korean carriers have so far resisted, for instance with their refusal to support voice over WiMAX for fear of cannibalizing CDMA or HSPA offerings.

Korea’s regulator, KCC, jumped the gun on WiMAX in 2005, issuing 2.3GHz mobile broadband licenses to Korea Telecom and SKT to add yet another option to consumers’ wide range of access choices - but using homegrown, pre-standard technology WiBro. There were early problems - SKT delayed roll-out because of possible conflicts with its parallel move into HSPA; a third licensee, LG Telecom, gave back the license because it could not work out the business model. All this showed the danger of entrusting a platform that required radical thinking to traditional carriers, and now the government aims to bring new providers with more varied models into the mix.

But rather than give into demands by the leading cellcos to reduce commitment to lossmaking WiBro, the regulator is to step up the pressure and make the environment more conducive to profitable new services. KCC is to issue more WiBro licenses and clear the way for MVNOs to invest in the market, and is to put mechanisms in place to accelerate its aim of a nationwide network - deployments so far have been concentrated only in capital Seoul and other major cities. According to the KCC, just 170,000 customers had signed for WiBro by the end of last year -3% of the figure predicted when licenses were first issued, though the number has now risen to 250,000.

The regulator also plans to issue corrective orders to KT and SKT, after finding they have fallen behind in their investment obligations, according to Korea Times, and could take even stronger action in future if they do not increase their investment in the service. KT’s investment in WiBro has fallen 14% short of its obligations, KCC said, while SKT’s is 20% behind commitments. The two incumbents will now be required to open their WiBro, and also their fledgling HSPA, networks for roaming for new operators, and KCC will permit VoIP over WiBro, despite opposition from KT and SKT. It hopes new entrants will put heavier focus on emerging and differentiated services like IPTV, as well as offering lower priced tariffs and handsets (though subsidies are not allowed in Korea).

According to Wireless Intelligence, SKT and KT had a total of 24m 3G customers as of the end of the third quarter.

Analyst Feature - Excerpt from “2009 Global WiMAX Forecast” by Phil Marshall, Ph.D.

By Andrew Mitchell

When mobile WiMAX was introduced in the 2004 time frame, it was positioned with the aim of disrupting the mobile market. The mobile industry has responded to the challenge by accelerating the development of 3G and advanced 3G technologies such as HSPA, HSPA+ and LTE. Contemporaneously, WiMAX has proven to be well-suited to portable broadband, particularly in emerging markets.

The success of WiMAX depends on a variety of factors, including its appropriate positioning relative to other fixed and mobile broadband technologies, the availability of suitable spectrum licenses, a robust technology ecosystem and confidence of the financial community. It is this variety of interdependent success factors that make it challenging to forecast the WiMAX market. While the lowest of any market watcher at the time, our forecast in 2006 was more optimistic than our current forecast and overestimated the number of subscribers in 2008 and 2009 for a variety of reasons (see the Yankee Group Report, “Modest WiMAX Market Grows Despite Uncertainty”). These include the collapse in the credit markets, slower-than-expected spectrum licensing and poor investment sentiment largely as a consequence of WiMAX being pitched against 3G and advanced 3G technologies like LTE.

Our current global WiMAX forecast has subscriptions increasing from 3.9 million in 2009 to 92.3 million by 2015, with a CAGR of 69 percent. This growth depends on successful positioning of WiMAX as a portable broadband technology, continued spectrum licensing and improved investor sentiment toward WiMAX market opportunities. We assume that current WiMAX service providers including Clearwire, Scartel (Yota), Packet One and UQ will play a critical role in driving positive market sentiment for WiMAX over the next 18 to 24 months.

For WiMAX to achieve this marked growth, it must gain greater industry support-particularly from regulators and investors. We believe this support depends on WiMAX establishing itself as a compelling portable (as opposed to mobile) broadband solution, particularly in emerging markets.

We believe that the industry is doing WiMAX a disservice by positioning it at this stage as a competitive technology to 3G and advanced 3G technologies such as HSPA, HSPA+ and LTE. As long as this positioning prevails, the mobile community will create regulatory and technical roadblocks to stifle the success of WiMAX in the marketplace. It will also see WiMAX adoption being measured through the lens of the mobile mass market.

Regulatory easement in major markets such as India and improved investor sentiment is critical for WiMAX to gain meaningful market scale and sustained industry support. In addition to appropriate market positioning for WiMAX, we believe it is contingent upon incumbent WiMAX operators to demonstrate and promote their market successes with the aim of improving confidence among regulators and investors.

Based on the results of this latest forecast, Yankee Group offers the following recommendations for technology vendors, service providers and investors:

• Position WiMAX as portable broadband instead of going head to head with 3G and advanced 3G.
• Leverage service provider success stories to improve investor sentiment.
• Capitalize on the evolution of ancillary infrastructure and ecosystems to drive WiMAX profitability.
• Continue to lobby for appropriate licensing regimes.

More detailed recommendations, charts, graphics and further reading are available with the full report.

Emerging and Evolving WiMAX Markets

By Caroline Gabriel

The development of the WiMAX platform has seen significant contributions from two sectors that once were largely separate: cellular mobility and fixed wireless broadband. This has given mobile WiMAX a dual focus that has been a strength - in terms of a platform that can span multiple business models - and a weakness - in terms of confusion about where exactly 802.16e fits into the wireless patchwork. Is it primarily a fixed/nomadic technology for extending Internet access to underserved and emerging regions or an alternative to long-term evolution in the developed world and the open-access, IP-based, fully mobile broadband model?

In both cases, new markets for WiMAX are emerging, while others are evolving from their initial starting points to cover new applications. Emerging businesses include new economies, such as the coming mobile broadband explosion in India and the rising demands of Indonesia; new business models, such as machine-to-machine (M2M) communications or quadruple play; and new devices, with high-speed wireless being embedded in almost every product we use, from PCs to media players, book-readers and pet collars.

The new devices - and the Web services integrated with them - also provide opportunities for operators to evolve services and drive new revenues. Most have built out their initial networks to provide mainly fixed or metrozone-based data access, but now they are starting to add voice, video, interactivity and a host of new IP-based services that, particularly in emerging economies, can change the way people live and work. Many, such as Clearwire, will wholesale capacity on their networks so that one buildout can support many different operators and models - in Clearwire’s case, supporting the wireless leg of a quad play for three cablecos; providing mobile broadband and data-focused services in metro areas for Sprint and for its own brand; and likely supporting embedded or M2M applications in the future, which could be on behalf of a variety of organizations from municipalities to public utilities to consumer brands.

This multilayered model is the most important aspect of the evolution of WiMAX markets in developed economies - especially where the network builder can access plenty of spectrum - and there will be many other examples besides Clearwire, including several media/TV operators around Latin America or the ambitious UQ in Japan. Far from competing head-on with cellular 3G operators, these companies will look to evolve their own businesses to provide something different and complementary.

Much of this will rely on the variegation of revenue streams and the shift toward the world envisaged by Google: where a few huge wireless pipes serve hundreds of service providers, each with its own applications, target markets and devices and eventually with the flexibility to use capacity on an on-demand basis. The experiments that Cisco, Google and Intel are carrying out on Clearwire’s networks indicate their hopes that the emergence of a new, open, all-IP network will stimulate the overall market shift toward open access, new Web services and a multitude of new “virtual operators.”

Another key feature of these experiments, and of the 4G trend in general, is the evolution of open software platforms - many of which will be tested out on WiMAX networks where there is spare capacity/spectrum - and a heritage in the open software world of the PC. Google’s investment in Clearwire indicates how it would like to harness the open IP nature of WiMAX networks to support its mobile software ambitions and visions, and it certainly will not be long before we see Android/WiMAX gadgets, as well as a strong support by 802.16e carriers for Google mantras such as tight integration of the device and the Web service, Net neutrality and open access, and flexible charging mechanisms.

These trends are not confined to mature markets. In many emerging economies, the motivation for using a standards-based technology with a wide range of device support and mobile capabilities is the chance to evolve the business model quickly as social and economic conditions change. In countries like India, road maps show a rapid evolution from simple access to support essentials to a wide range of Web services that enable more efficient ways of working.

In this type of market, backhaul challenges will be a major element, and there likely is to be considerable cooperation between WiMAX and satellite. This is not just true in developing nations, but in the rural reaches of North America, where alliances between satellite providers and WiMAX carriers are starting to emerge. As in other underserved markets, such projects could take advantage of grants and loans available through broadband funding programs. Ironically, the economic downturn may boost WiMAX in some respects because it is well-placed, in terms of capabilities and readiness, to take part in the stimulus plans of many governments around the world.

All these new and evolving markets mean that WiMAX vendors need to choose their areas of focus as the technology’s reach extends - as will LTE’s. Though the two standards have a large measure of overlap in pure hardware terms - about 80%, say many vendors - clear differences are emerging in the type of operators that ask for WiMAX or LTE. For instance, Fred Wright, senior vice president of cellular networks and WiMAX for Motorola, sees two distinct markets evolving for the platforms. WiMAX operators such as Clearwire or UQ may be affiliates of telcos or cellcos, but they have different business models geared around broadband data and not necessarily high mobility. “WiMAX got sidetracked in 2005-6, when LTE was a distant dream and WiMAX was seen as the next coming for high-mobility wireless for the cellcos,” Wright said.

Instead, WiMAX needs to grab low-hanging fruit in emerging economies - especially those lacking in 3G and/or wireline broadband - and put the weight of its ecosystem behind newly emerging business models. In these, its supporters hope, it can take a lead while LTE focuses, initially at least, on the upgrade requirements of the 3G carriers whose networks are reaching their ceilings. One thing is sure: Given the explosion in demand for mobile broadband in every part of the world and the proliferation of devices and services that harness it, there will be no problem in supporting more than one wireless enabling technology along the road to 4G.

Clearwire completes ecosystem as Huawei Technologies signs on

By Andrew Mitchell

Clearwire’s ecosystem of infrastructure partners for its mobile WiMAX networks is now complete.  In a press announcement released on Tuesday, Clearwire stated that Huawei would join Motorola, Samsung, Cisco, Ciena and DragonWave as its 4G infrastructure suppliers.  Speculation of Huawei emerging as an eventual partner began in late March of this year and while the announcement doesn’t come as a surprise it does close off on months of speculation.

Huawei’s role in the delivery of the CLEAR network is outlined by Clearwire as being a supplier of base station and element management system components for the WiMAX radio access network (RAN).  Other suppliers of RAN components are Motorola and Samsung.  Cisco will provide the core IP infrastructure and Ciena will provide the basestation switching components.  DragonWave and Motorola will provide microwave backhaul components.

What’s interesting about Huawei’s win is that it represents a significant entry into the US market during times of a down economy, a focus on buying American and the on-going political and social issues that have been plaguing China.  Huawei has experienced challenges in attempting to do business in the US in the recent past.  In March of last year Huawei and private equity partner Bain Capital Partners were blocked by the Committee of Foreign Investment in the United States in their bid to acquire 3Com.  At that time objections were centric around concerns of threats to US national security.

Aside from getting a notable break into the US market, what does the deal mean to Huawei?  The deal in some respects means that Huawei is being recognized for its ability to provide viable and compelling solutions using WiMAX technology along with a lower product cost.  As Ari Banerjee, Vice President of Yankee Group’s Anywhere Network Research Group sees it, “For Clearwire, it’s a clear signal to its vendors that they will take all possible measures to drive down costs.”

While it’s too early to tell what the value of this 3-year agreement will be for Huawei it is probably a safe bet to say that it will be signficant.  What we do know is that fully deployed the CLEAR network will require around 20,000 base stations.  The value of Huawei’s share of the equipment isn’t obvious but, at an estimated cost of $150,000 US per base station, it’s not likely to be small.

For an upstart, Huawei has much to be proud of, especially when contending with long established competitors in the US wireless market.  As Charlie Chen, Huawei USA’s Senior Vice President, Marketing and Product Management said, “We view this as a major milestone in our overall strategy in North America.”

WiMAX chipmaker MediaTek touts “all in” solutions

By Andrew Mitchell

Eric Yeh is Senior Marketing Manager at MediaTek.  As we begin our conversation Eric explains that Taiwan-based MediaTek “has not been vocal about our vision, or the company in the future.”  He goes on to say that senior executives of a small US-based startup being acquired by MediaTek described the company as one they didn’t know much of but quickly came to describe it as “the best hidden treasure in fabless semiconductors.”

MediaTek’s roots are in computer storage.  Their computer storage division, the oldest division of the company, creates disk controllers for CD-ROMs, DVDs and writers, including Blu-ray technology.  Another line of business includes consumer “player” and multimedia devices.  In this area MediaTek ranks as number 1 in independent DTV device vendors, exclusive of in-house producers such as Sony.  Despite not being vocal about their vision, MediaTek did see a future in wireless in 2001 and set out to pursue it as a fabless chip vendor.  In 2009 MediaTek’s 2G GSM baseband chipset business unit is now the company’s largest division.  Yeh explained that the company enjoys a number 1 or 2 ranking in the GSM world, and when stacked up against the likes of Qualcomm and Broadcom in a 3G world, still ranks as number 2 or 3.

So what differentiates MediaTek from its competitors?  Yeh says that it’s a focus on “very complete turn-key solutions - ones that are good for emerging markets.”  He goes on to say that a reputation for “performance and power savings” helps as well.  For MediaTek providing turn-key solutions means providing more than just a baseband chipset.  Whether building last-mile replacement solutions for emerging markets or creating 4G mobile solutions, MediaTek’s strategy is to provide highly integrated hardware and software.  Yeh claims that multi-vendor approaches don’t work well for emerging markets where cost effectiveness and short time-to-market are key considerations.  That means being able to deliver mobile devices that support multimedia and not just WiMAX connectivity but also WiFi, 2G, 3G and BT as well.  This says Yeh, is where “we are in a unique position to provide such solutions.”

So how does MediaTek see a 4G future unfolding for WiMAX and LTE.  As Yeh sees it the business case for WiMAX in emerging markets will continue to be strong for the next 3 to 5 years.  He describes what he sees as “build it an they will come.”  His view is of of a phenomenal subscriber growth that he anticipates “will continue in India and South America as well.”  But in terms of mobile WiMAX Yeh believes that it will be 2012 before the industry starts to show any appreciable growth in volume.  As for LTE, Yeh’s opinion is that the technology today is “highly hyped and build outs will take the same time or longer.  With no world-wide spectrum allocation how can you have a global solution?”  Until such a time as spectrum allocations have been defined it won’t be economic for any vendor to be producing large volumes of chipsets.

Yeh closes our interview with some advice for analysts who are watching the 4G wireless industry.  “Focus on solutions, platforms and devices, not just chips shipped and pricing.”

CLEAR air in Las Vegas

By Andrew Mitchell

In spite of the dismal global, and the especially hard hit American economy, wireless service provider Clearwire has managed to stay on track for their deployment of mobile WiMAX in Las Vegas.  Officially launched yesterday, July 21, Clearwire Communications’ CLEAR service will provide access to approximately 1.7 million business and consumer customers throughout the new 638 square mile coverage area.

Another interesting component of the launch is the announcement of the availability of a dual-mode 4G/3G USB modem dubbed the “Clear 4G+”.  This should come as welcome news to those current CLEAR subscribers who have been juggling 2 modems as well as capturing the attention of those who have been thus far hesitant to make the leap from an existing 3G service.  The new Clear 4G+ product is scheduled to hit the shelves on August 1.

And to complement the Las Vegas launch, handset manufacturer Samsung also announced today the availability of their Mondi mobile Internet device (MID).  According to a Samsung press release the Mondi will be on shelves starting August 1 at Clearwire retail outlets and select Best Buy stores  in Atlanta, Las Vegas and Portland, OR.  The Mondi is a dual-mode MID but for some users it falls just a bit short of expectations - it doesn’t support voice and it doesn’t have a 3G radio.  Nonetheless, Omar Khan, Senior Vice President of Strategy and Product Management for Samsung Mobile is excited about its prospects. “The Mondi packs productivity tools, entertainment options and content management applications into a compact device that is flexible and intuitive,” he offered in yesterday’s announcement.

Late last year concerns were raised about the viability of Clearwire’s ability to successfully execute on their mobile WiMAX rollout plans.  Analysts and critics at the time suggested that Clearwire’s plans were aggressive and that gaining access to the necessary capital would create constraints that would ultimately slow down or scale down deployments.  Quoted in a Wall Street Journal article, then Clearwire CEO Ben Wolff explained “There is a scenario in which we’d build a little more slowly and you’d never need any more capital.  Or we could be more aggressive and we’d have to look to acquire more debt or equity in either late 2009 or early 2010.”  But, in spite of the economy, access to capital and the doubts of mobile WiMAX and Clearwire critics, the roll-out shows little sign of losing momentum.

Clearwire has rolled the dice for Las Vegas.  Will the next throw reveal Dallas or Chicago as the next US city on the roll-out?  Either way, mobile WiMAX appears to be coming up a winner.

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