WiMax Struggles for Broadband Share

In the mobile operators' race to capture the still largely untapped WiMax market, global analyst firm Ovum said the catch is turning out to be a competition for the niche instead of mass markets, due largely to price and coverage issues the technology must overcome.

Because WiMax struggled to gain a foothold in the mature markets of Europe, North America and Asia, Ovum expected it to gain ground in the emerging markets. This, however, didn't turn out to be the case, for the confluence of several factors including cost, coverage, vendor support, and service provider choices limited WiMax to a niche market.

"Two thirds of the 300+ WiMAX networks globally are in the emerging markets of Africa, Asia, Eastern Europe, Middle East and Latin America," said Angel Dobardziev, practice leader, Ovum. "Yet, most emerging market WiMAX operators currently have thousands, or tens of thousands of subscribers, rather than the hundreds of thousands of subscribers that they planned to have at this stage."

Dobardziev explained that the customer equipment cost of WiMax is still largely more expensive than DSL and HSPA, limiting its patrons to businesses or wealthy households.

Because of this, Ovum predicts that WiMax will remain to be a niche technology in all markets, and would account for less than 5% of 1.5 billion fixed and mobile broadband connections by 2014. "WiMAX coverage will remain mostly in large urban centres where it will compete against DSL, HSPA/EV-DO and in some cases fibre (FTTx) services," Dobardziev pointed out, adding that DSL and HSPA will remain cost-competitive in the next five years.

Still, Ovum said, WiMax will play a role in worldwide broadband Internet penetration, although its effect won't be as significant as its predecessors.