Survey: WiMax Operators Plan to Go Mobile, Want More Devices

PC World

A majority of WiMax operators plan to offer mobile services by 2012, but a lack of smartphones that support the wireless technology will make it a challenge, according to a survey by Infonetics Research.

Today, WiMax is mainly used for fixed or so-called nomadic broadband services -- where the user accesses the Internet, disconnects, moves to a new location and then connects again. However, two-thirds of the 25 service providers that Infonetics surveyed plan to use WiMax for mobile broadband by 2012, according to the survey. Also, 90 percent expect to offer Voice over IP using their WiMax-based networks by then, the survey said.

For mobile services to take off, smartphones are needed. Today, a lack of WiMax-enabled products is the biggest concern for operators with mobile aspirations, according to Infonetics' survey. However, the incentive for smartphone makers to adopt WiMax should grow as the number of potential users goes up. Sprint's launch of the HTC Evo 4G shows that there is a pent-up demand for smartphones on WiMax networks. The EVO 4G was the third most popular Android-based smartphone, among consumers in the U.S., during the second quarter, trailing the Motorola Droid and the HTC Droid Incredible, according to market research company NPD Group.

A lack of smartphones is the biggest, but not the only challenge, according to the survey. Operators are struggling to find a way to buildretail and distribution channels and offer low-cost services for developing countries, and the WiMAX industry is up against the clock to address these challenges, said Richard Webb, directing analyst for WiMax, microwave, and mobile devices at Infonetics.

In May, Russian operator and WiMax provider Yota announced it was planning to roll out LTE (Long-Term Evolution), and hailed expectations that the main manufacturers will launch a large numbers of LTE devices as one of the main reasons.

Clearwire's WiMax Rollout Faces Steep Hurdles

As posted by: Wall Street Journal

Though Clearwire Corp.'s recent merger with Sprint Nextel Corp.'s wireless broadband unit put it on more solid financial and strategic footing, the company still faces a steep climb as it tries to best rivals in the rollout of a new generation of mobile Internet access.

Clearwire hopes to beat rivals by at least two years with a "fourth generation," or 4G, wireless network. It will use a technology called WiMax to provide connections for laptops and smart phones that are about four times faster than today's 3G networks run by Verizon Wireless, AT&T Inc. and Sprint.

Building a nationwide network of WiMax towers quickly will be expensive. The deal with Sprint, which was completed late last month, brought an infusion of $3.2 billion from equity investors including Intel Corp., Google Inc. and several cable providers. That money will go toward initial build-outs in 2009, beginning with the 46 markets where Clearwire already offers a wireless service similar to WiMax through modems or cards that can be inserted in PCs.

But analysts say Clearwire may need $3 billion to $5 billion more to complete the mobile WiMax network. Chris King, a telecom analyst at Stifel Nicolaus, said if the credit markets don't improve, Clearwire would likely have to turn to its strategic equity investors for more capital.

Ben Wolff, Clearwire's chief executive, said in an interview that the company has the option of slowing down its build-out and using cash flow from its initial markets to fund further launches. "There is a scenario in which we'd build a little more slowly and you'd never need any more capital," he said. "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."

The strategy of slowing down the build-out to save costs has risks, however, because it might wipe out the effect of Clearwire's head-start in next-generation wireless broadband. "The question is, how much of a time advantage are they actually going to have," said Mr. King, whose model doesn't show Clearwire turning a profit until 2015. (He estimates a $688 million loss for 2008.)

Rival carriers, meanwhile, are moving gradually to a different wireless broadband technology called LTE, or Long Term Evolution. Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, is planning some trials of LTE late next year, with its first real build-out expected in 2010. AT&T, the nation's largest wireless carrier by subscribers, says it won't begin an LTE rollout for at least another two years, but it is planning to upgrade its 3G infrastructure in 2009 to match the speeds of WiMax.

In the U.S., Clearwire's WiMax network could become an outlier once telecom giants Verizon and AT&T launch their LTE networks and LTE chips are embedded in laptops and mobile devices. Mr. Wolff said Clearwire is taking steps to make sure its network can be tweaked later to allow compatibility with LTE, perhaps with a small piece of equipment being inserted into towers.

Mr. Wolff said timing isn't Clearwire's only way to gain an advantage over Verizon and AT&T. He notes Clearwire amassed a huge amount of radio spectrum, which is necessary to provide high-speed mobile Internet access, when it merged with Sprint's WiMax unit. And he said the fact the company doesn't have a cellphone business means it won't be concerned about cannibalizing legacy voice revenue with Web-based services like Internet telephony.

"You won't find us being burdened by the same kinds of constraints," he said.