WiMAX may challenge Asia 3G 'in five years'

Wi-Fi 'not a successful business model' for wide area broadband

Simon Burns, vnunet.com 29 Nov 2006

Despite hype and heavy investment, the WiMAX wide area networking standard is still a long way from challenging existing mobile phone technology as the Asia-Pacific region's primary means of mobile internet access, according to predictions published yesterday.

It will be at least another five years before WiMAX can pose a serious threat to 3G in the region, believes Singapore-based In-Stat analyst, Bryan Wang.

“Wi-Fi proved not to be a successful business model, but WiMAX is now gathering momentum and is expected to reach 14 million subscribers by 2011,” Wang wrote in a press statement. This would make WiMAX almost eight per cent of the size of the regional 3G market predicted for 2011 by researchers at Frost & Sullivan.

South Korea has already launched a mobile version of WiMAX in a few urban areas, although anecdotal evidence suggests uptake has been slow so far. Korea consumer electronics giant, Samsung, is attempting to take advantage of its early lead by opening a WiMAX factory and research centre in China, where 3G service introduction has been delayed for more than a year, according to recent press reports. Samsung is promoting WiBro, as a Korean variant of mobile WiMax.

However, 3G has already entered a period of very rapid growth in Asia. The number of 3G subscribers will grow more than 50 per cent annually from 2005 to 20011, to reach 178 million in the region by the end of 2011, predicts Frost & Sullivan research analyst Lenny Koay. “China and India, given their huge populations and economies of scale advantage will account for much of this growth,” said Koay. Both countries are expected to introduce 3G services in 2007.

The mobile market will generate $674 billion in revenue for operators worldwide this year, according to Ovum, a UK-based research consultancy. Compared with this, the hundreds of millions being invested in WiMAX look less impressive.

In addition, there is currently a simple lack of interest, or at least a lack of awareness, regarding data services, data revealed by Koay demonstrates. “In 2005, mobile data accounted for only 16.4 per cent of the total Asia-Pacific cellular revenues,” he said.

“In markets such as Hong Kong, India, Taiwan and Thailand, the voice segment still reigns, where it commands more than 90 per cent of the overall cellular revenues.”

Globally, 3G mobile users will account for one-third of a three-billion-user wireless market by 2010, research firm Strategy Analytics recently forecast.

Other issues are also hindering the growth of broadband wireless technologies such as WiMAX, Wang believes. "Telecom providers introduced Broadband Wireless Access (BWA) technologies to tap into the wireless trend, accelerate wide market diffusion, and to provide consumers with an alternative or complementary value proposition," said Wang. "However, a lack of standardisation and interoperability issues have not augured well in adoption rates for most proprietary BWA technologies."

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