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Summary:

[qi:___wimax] Juniper Research issued a report this morning noting that growth in WiMAX networks has been slower than anticipated, but revenue from WiMAX 802.16e broadband subscribers will exceed $15 billion globally by 2014. Before we get all excited over the prospects for Clearwire, to put that […]

[qi:___wimax] Juniper Research issued a report this morning noting that growth in WiMAX networks has been slower than anticipated, but revenue from WiMAX 802.16e broadband subscribers will exceed $15 billion globally by 2014. Before we get all excited over the prospects for Clearwire, to put that in perspective, Verizon reported wireless revenue of $15.1 billion for the first quarter of this year. The report notes that WiMAX will likely be a replacement technology for low-end DSL service and in developing countries where wired access doesn’t make economic sense, but the overall market is still small.

  1. Clearwire notes 25,000 customer adds in the first quarter of 2009.

    They also note:

    “First CLEAR™ Mobile WiMAX Market Launched in January Adds Customers at Well More Than Double the Pace of Any of Clearwire’s Prior 51 Market Launches ”

    The market appears to be good, even in cities “saturated” with 3G, such as Baltimore.

    http://newsroom.clearwire.com/phoenix.zhtml?c=214419&p=irol-newsArticle&ID=1288116&highlight=

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  2. I’m don’t know about the long-term prospects for either WiMax or Clearwire – but is comparing potential annual revenue to Verizon’s quarterly revenue reasonable? Verizon has multiple service offerings, and has had years to amortize a good portion of their infrastructure. And with deployment costs of $850 to $4000 per home (your numbers, December 2008) — that revenue can dilute very quickly.

    Personally, I’m for any company/technology that furthers competition in the broadband world.

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    1. Stacey Higginbotham Wednesday, May 20, 2009

      That was the revenue for Verizon’s wireless business, not the entire company. Services revenue, which is the sale of wireless subscriptions, accounted for $13.1 billion, so I think it’s a fair comparison given that the Juniper report says worldwide subscription revenue for WiMAX would equal $15 billion. I’m not anti-WiMAX, I just wanted to give the numbers some perspective.

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  3. Anonymous Coward Wednesday, May 20, 2009

    I think your effort at giving perspective is worthwhile, but it’s probably more accurate to use VZW’s wireless data revenues ($3.6B in Q109 I think) instead of their total revenue which includes voice traffic that companies like Clearwire have not said they are actively trying to compete for. In this context, Verizon’s on par annually today with the five year projections for WiMAX globally.

    Still nothing to shake a stick at, but down about 75% from your original comparison.

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    1. Stacey Higginbotham Wednesday, May 20, 2009

      Fair point. Verizon’s quarterly wireless data revenue for Q1 was $3.6 billion and last year’s total wireless data revenue at VZ was more than $10 billion. Perhaps better perspective would be the chart on slide 21 from Chetan Sharma’s 2008 market report: http://www.slideshare.net/chetansharma/us-wireless-market-q4-2008-and-2008-update-mar-2009-chetan-sharma-consulting.

      The point is WiMAX in 2014 will be achieving sales globally near levels seen by the top carriers in 2008 on 3G networks.

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    2. But form that perspective shouldn’t we include only the data revenues generated by Clearwire and the global projections. I bet Juniper is clearly not making those distinctions.

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      1. Anonymous Coward Friday, May 22, 2009

        Is Clearwire generating anything other than data revenues? They don’t have a cellular/voice network to speak of and one could argue that VOIP service is data given the way it’s carried.

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  4. Any other technology out there hoping to “limp” its way to a $15B market in these times? That’s a lot of limping…

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    1. It is $15 billion in 2014. So what else would you call it… it is nothing but limping, regardless of what you might think.

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      1. Maybe if Usain Bolt is doing the limping, you can get to $15 billion in 4 years. Calling it a slow walk or a light jog is probably more accurate, no matter what I think.

        I’d feel better about the wondrous projections for LTE if it wasn’t all faith-based right now. Maybe when an LTE market actually launches we can watch an actual footrace.

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  5. Did the report mention LTE or offer a side-by-side growth comparison?

    Wimax has always faced challenges and the fact that it’s (finally) becoming commercially available on a global scale says to me that it has achieved an element of success. I still look at Wimax as the path-forging service that will create an appetite for and open consumer eyes to the possibilities of true mobile broadband.

    So Wimax will probably come and go without much fanfare, but its lasting effect will be a door blown wide open for new and better technologies.

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    1. You might be right about WiMAX’s impact as a 4G catalyst. I couldn’t agree more — they are going to be blown away mostly because of LTE momentum. Too much foot dragging and involvement of companies that have no idea about telecom/networks has caused WiMAX delays. We have been following the technology for ever and it is always something or the other that is holding it back.

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      1. Jesse Kopelman Thursday, May 21, 2009

        Om, I think you are exactly right here. That said, let’s not forget the status of 3G 5 years ago. It was just starting to have an impact in the US, 3 years later than expected, and even globally things had gone much slower than the original hype. Yet, eventually it did build up a head of steam and now it is pretty much everywhere. Now keep in mind that this was with two competing standards, EVDO and HSPA, both of which are still around and going pretty strong. I remember plenty of hype from 3GPP that their 5X user base was going to make CDMA2000 untenable . . . Could 4G play out the same way? I’m still pretty doubtful we will see any major US LTE deployments before 2012. If Clearwire is still in business by then it may be able to survive well into the meatier part of 4G adoption. And who knows, by then policy changes might have actually effected the the competitive landscape and there might even be some new players (not holding my breath for that).

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  6. Speculation can be fun can’t it…. Wait, isn’t that how this economic crisis came to be?

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  7. Perhaps WiMAX will be blown away by LTE’s momentum but momentum can be more ephemeral than you think. For all practical purposes, the technologies are the same in terms of performance (i.e. BW efficiency…bits/sec/Hz). They’re also much closer in performance to HSPA and 1xEvDO than anyone in the wireless industry will admit (the touted x10 performance gain is much closer to x2). My guess is that your momentum argument is primarily driven by scale arguments. Here are some counterfactuals:

    – scale gains in cost starts becoming marginal as volumes increase. Going from 1000 to a million units has a huge impact on economies of scale. Going from 1 million to 10 million? Not so much. It’s obviously a complicated issue, covering things like the unit costs of CPEs, base-stations, network infrastructure and the upfront engineering costs associated with each. The gist is that WiMAX will be big enough that it’s economies of scale will be comparable to LTE…even if it has only a tenth as many subs.

    – what will the service be like? since they’re pretty much the same in BW efficiency, it all comes down to spectrum. Verizon is deploying LTE in their new 700 MHz acquisition, which is an 11+11 MHz pair (22 MHz in total). Clearwire has 120 MHz of spectrum in the US. That’s a HUGE difference and will have a dramatic impact on the service/device mix that Clearwire will be able to offer. Just you wait, Verizon’s LTE service offering will have the same bandwidth caps and limited “unlimited” service as everyone’s current 3G service. People will also see peak rates no more than 5 Mbps (a limitation with Clearwire as well, though their big spectrum holding means that they can dish out those peak rates to a lot more users simultaneously).

    The real action is in the area of government spectrum policy. How much spectrum is available for WiMAX vs LTE in various markets. We know that in the US, Clearwire has 120 MHz for WiMAX. The AWS auction was for about 80 Mhz and there’s about 40 in total in 700 MHz (currently). However, the AWS and 700 allocations are spread over multiple operators. In India, the upcoming auction has 80 MHz for BWA (which is TDD spectrum and therefore will be WiMAX) and 50 for 3G, which will be either HSPA or LTE. The WiMAX allocations are 20 Mhz chunks but the 3G/LTE allocations are 10 MHz chunks. Again, advantage WiMAX. Continue on through all the major countries and figure out where the spectrum allocations favor WiMAX or LTE. That’s how you figure out who the winner is going to be. From my POV, the market split will be put WiMAX at somewhere between 20 and 40%, which I’d call a tie.

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    1. I would like your opinion on WiMax deployment with 35 MHz given to each operators (4 operators with 140 MHz in total ) . This is in a market where WiMax is being deployed 1-2 year before 3.5G/LTE comes to market. Thanks.

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  8. Mobileinsider Wednesday, May 27, 2009

    I’m still waiting for a report which shows how any company posted PROFITS from deploying a fixed or mobile WiMAX system – in context of Capex/Opex spent and underwriting investments from Intel. I will not hold my breath.
    WiMax should not worry about LTE. Worry about the plethora of HSPA+ deployments taking place this year and next.

    Twitter/mobileinsider

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  9. [...] service that consumers will pay for in the developed and developing world, other reports make the technology’s potential seem far less than that of even current generation cellular technology. But with a backer like Intel, it looks [...]

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