WiMax crisis

The decision of Ericsson to stop developing mobile WiMax has raised questions over the technology's future.

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By  Tawanda Chihota Published  June 4, 2007

He draws a comparison with the development of cdma2000 technology, which was well executed as a technology, and was technically sound at that, but which still failed to achieve widespread adoption as a result of the overwhelming presence of GSM and its subsequent incarnations.

So the question for operators in such markets is whether or not it would be cheaper to deploy this kind of infrastructure. Some might believe that WiMAX will be preferable to rolling out fixed structures in low penetration markets.

Oliver Wyman's Sallaba does draw attention to the fact that around the globe operators are starting to make some investment in WiMAX technology, the most notable of which is Sprint's US$4 billion investment. He forecasts that WiMAX will hold the largest promise for operators in markets where the telecoms infrastructure is relatively immature.

"So the question for operators in such markets is whether or not it would be cheaper to deploy this kind of infrastructure. Some might believe that WiMAX will be preferable to rolling out fixed structures in low penetration markets," Sallaba says. He believes the biggest market potential for WiMAX is in markets where operators can rollout WiMAX networks with greater ease than they could with alternative standards.

"If a network operator is going to make an investment decision now, there is no standardised mobile WiMAX so it is somewhat speculative at present making it difficult to compete in markets where there are mobile operators that can offer services such as mobile roaming," Sallaba suggests.

In the end what appears to be most important to bear in mind with respect to the business case for WiMAX is that much depends on what sort of frequency a player has as well as how much of it they have access to. The regulatory licence requirements that are being allocated in the Middle East, for example, mean that it is not ideal for making the most of the opportunities that WiMAX can offer.

"Primarily in the Middle East the wireless frequency that is being handed out tends to be 3.5GHz as opposed to 2.5GHz, which is what Sprint is working with in the US market," explains Sallaba. "The lower frequencies mean fewer base stations with more reach or higher speeds meaning lower rates of investment, in terms of equipment, are required which would make the business case for WiMAX more attractive."

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