WiMAX Counts Quarterly Report provides a snapshot of the global WiMAX industry
The WiMAX Counts Quarterly Report from Maravedis provides an excellent summary of key information gathered and analyzed by Maravedis' WiMAXCounts team. It contains meaningful and accurate information on applications, service offerings, ARPU, pricing and target markets. It also presents statistics and graphics of recent service provider deployments, industry trends and investments among other items.
Here's the Executive Summary:
The third quarter of 2008 proved very eventful for the WiMAX industry. September marked another
milestone with the commercial launch of Sprint’s XOHM in Baltimore, which will be a key driver for
greater WiMAX market penetration. As of January 2009, Sprint had not yet released details of the
results of that launch in terms of subscribers. Also during this quarter, the WiMAX Forum certified
another 13 mobile WiMAX products (in the 2.5GHz band) in addition to the first 10 mobile WiMAX
products certified in June 2008. In total, 10 vendors now have certified WiMAX equipment.
We also saw major operator developments in countries such as Russia and India – the latter considered one
of the most promising countries for WiMAX’s future, due to its need for greater broadband
connectivity. Last August India’s Department of Telecommunications announced it would release
spectrum blocks in the 2.3GHz and 2.5GHz bands for WiMAX, and in the 3.3GHz-3.6GHz and 700MHz
bands for BWA (when available). According to the Indian regulator, the 2.3GHz-2.5GHz auction will
occur in 2009, coinciding with the publication of Maravedis’ third edition of its “Opportunities and
Challenges for Broadband Wireless in India” report.
Much has been said of late about the battle between WiMAX and LTE. LTE’s momentum continues to
grow, as it is the technology selected by most mobile operators worldwide. Today there are nearly
400 operators deploying or trialing WiMAX, and over 100 committed to LTE, including many CDMA
operators.
However, the industry also struggled during this quarter. The economic downturn affected most
WiMAX operators’ deployment plans, average revenue per user (ARPU) margins and subscriber churn
rates. Most WiMAX operators are finding it difficult to maintain investment plans for new network
build-out and enhancement projects, due to the limited capital-raising opportunities.Unwired Australia
is one example of an operator hit by the credit crunch. Now struggling to find enough cash to pay for
its planned nationwide mobile WiMAX network, Unwired is trying to slash between $20 and $30
million from the cost of its network. Tata Communications in India is also running out of capital
needed to meet its annual operating plan. Billions of dollars are needed to establish these nextgeneration
networks, the fundamental challenge faced by both greenfield and established operators
is in turning a profit from networks that are well under developed.
For the first time in its short history WiMAXCounts reported a significant slow down in service revenue
growth compared to previous quarters, dropping from a continuous 21% increase trend quarter-overquarter
to only 14% at the end of Q3 2008. In 2009 the economic downturn will continue to slow
growth and innovation in many areas, but will also create attractive investment opportunities in the
communications sector. According to Venture Capital Firm, the leading trend going into 2009 is an
accelerating shift in consumer spending toward wireless services and replacement of landline
services. The value of mobile data services will accelerate as consumers rationalize their
communications services expenses. Smaller carriers will have room to differentiate themselves with
innovative products and services, and operators will revise deployment strategies to remain profitable
and increase efficiency with fewer resources. Finally, lower monthly subscription fees could
accelerate the adoption of “Personal Wireless Broadband.”
At the end of September 2008, WiMAXCounts counted over 2.68 million BWA/WiMAX subscribers, a
13% growth from Q2 2008 and a 91% growth from Q3 2007. The economic downturn affected
the ARPU margins and quarterly revenues. Further, the appreciation of the US dollar caused
many operators’ ARPUs to decline when converted to US dollars; this together with a lower
subscription growth rate produced a slower increase in revenue as compared to previous
quarters. With a monthly residential ARPU of US$46.46 and business ARPU of $125.66, the
worldwide subscriber base generated estimated quarterly revenues of US$492 million.
Residential subscribers (64%) continue to dominate the number of business subscribers (36%). North
America represented the region with the highest residential customer base, closing out Q3 2008
with 78% residential and 22% business. These numbers are heavily weighted by Clearwire USA’s
residential broadband success, despite the company reporting its lowest incremental increase in new
subscribers in its history. For more information:
https://www.vtrenz.net/imaeds/ownerassets/328/Brochure_WiMAXCounts_Q3_2008.pdf
Comment and Analysis:
We question how many of the 2.68 million BWA/WiMAX subscribers were accessing standardized WiMAX networks, i.e. WiMAX Forum certified equipment. We think market analysts should not be too influenced by Clearwire and should look at Asia, Latin America, Eastern Europe and the Middle East for WiMAX growth. Finally, we think the comparison and rhetoric over WiMAX vs LTE is way overblown. The real competition for mobile WiMAX is 3G/ 3G+ while the actual competition for fixed WiMAX is proprietary BWA and (to a lesser extent) mesh WiFi.