Chris Nuttall WiMAX will miss the mass market, says Ovum

Intel, which reports third-quarter earnings on Tuesday, has been talking up the emerging markets prospects for  WiMAX, with the technology it has heavily backed failing to gain much traction so far in the US and Europe.

But, according to a new report by the Ovum consultancy, WiMAX will only be a niche technology in emerging markets as well.

Intel sees the mobile broadband offered by WiMAX as a natural evolution of Wi-Fi and the next destination on what has been a profitable roadmap for its Centrino chipsets.

It expects around 100 laptops to feature WiMAX chips
this year – the Dell Latitude Z600 (pictured) appears to be one of the first – and has pumped more than $1bn into Clearwire to help roll out a WiMAX network in the US.

However, it wrote down $1bn of that investment in January and Clearwire has only announced service in 14 markets – most of them small ones such as Waco, Texas and Boise, Idaho.

The Ovum report predicts that WiMAX will account for less than 5 per cent of the 1.5bn fixed and mobile broadband access connections in emerging markets in 2014.

“WiMAX will play a role, but it will be a far smaller one than many WiMAX players would accept today,” says Angel Dobardziev, Ovum practice leader.

“WiMAX will fall short of the grand hope of being a mass market broadband technology in emerging markets.”

Ovum reports that two-thirds of the 300-plus WiMAX networks globally are in emerging markets, but most of these players are behind their rollout and subscriber targets, with just thousands or tens of thousands of customers.

Scartel in Russia was the first to reach 100,000 subscribers in August, when Packet One in Malaysia announced 80,000, making it the second largest player.

There are two flavours of WiMAX -  one that static computers can be connected to and one that allows mobile connections from a laptop or portable device.  Ovum says WiMAX is not competitive with its rivals – DSL in the home or business and HSPA offered by mobile carriers. They will both beat it on coverage and price over the next five years, confining its use to wealthy consumers and businesses, it says

The consultancy sees large-scale consolidation among players over the next two to three years. They will either go out of business or be acquired by established carriers looking to fill in gaps in their coverage or boost the capacity of their networks.

Intel is still heavily committed to the technology and says WiMAX networks currently have a coverage area of 400m people and are projected to reach double that number by next year.

However, Ovum’s analysis is only marginally more optimistic than Nokia’s assessment earlier this year that WiMAX is the next Betamax.