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Will the WiMAX Providers Find Their Mojo?

WiMAX may be a tale of two markets -- one being WiMAX as an emerging technology gaining momentum, and the other being the larger converging broadband market, where rival mobile broadband system HSDPA and the acceleration of LTE threatens the opportunity for WiMAX in some markets.

"It's the best and worst of times for WiMAX," says Mike Roberts, principal analyst at Informa Telecoms & Media.

It's the best of times because the WiMAX industry has undoubtedly gained significant momentum in the last year, passing a string of key milestones including product certification, the launch of services by major operators such as Sprint Nextel, commitments to WiMAX by key Internet players such as Google, and the long-awaited arrival of WiMAX notebooks and other devices.

WiMAX is also starting to take off in key emerging markets. For example, Informa's forecasts show that WiMAX will account for 24 percent of India's total broadband subscribers by 2013, up from 7 percent in 2008.

But despite the upside potential, it's also the worst of times for WiMAX because its rival HSDPA has become a runaway success in many markets worldwide, and emerging rival LTE has accelerated and gained the backing of most of the world's major mobile operators.

Meanwhile, mobile WiMAX pioneer KT had 200,000 WiBro subscribers at the end of May 2008, well below expectations given the service launched in June 2006 and was expanded significantly by May 2007. In contrast KT's mobile arm KTF launched HSDPA services in March 2007 and had 4.8 million subscribers by March 2008.

"KT may be a special case since it launched mobile WiMAX services so early into such a competitive broadband market," Roberts says.

But the very different performance of mobile WiMAX and HSDPA in Korea shows the challenges WiMAX faces in some major developed markets. To overcome the challenges and gain traction in fiercely competitive markets, operators will have to use WiMAX as a platform for innovative new business models, devices, applications and services.

Mobile WiMAX also faces challenges because is entering its capital-intensive deployment phase in the midst of the global financial crisis, which will make it harder for operators to secure funding for new deployments.

Informa's market study finds significant opportunities for WiMAX in many regions and market segments worldwide, but in others it will struggle to compete with HSDPA and other broadband systems.

According to Informa's assessment, WiMAX is taking off in some key markets, which will lead to 103 million WiMAX subscribers worldwide by 2013. But, rival HSPA is truly booming and will have more than 1 billion subscribers worldwide by 2013, more than ten times as many as WiMAX.

However, mobile WiMAX still has a significant head-start over its OFDMA rival LTE, which will launch commercially in 2010. The result is that WiMAX will be the leading next-generation mobile broadband system in 2013, with significantly more subscribers than LTE.

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