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Doubts cast on viability of WiMAX

Research firm says the 4G technology will play limited role

Doubts cast on viability of WiMAX
Ovum analyst says subscriber numbers for WiMAX are low.

Fourth generation wireless technology WiMAX will play a limited role in the fortunes of the telecom markets of the Middle East and Africa, with consolidation among operators likely, according to a research firm.

With low fixed-line penetration, the emerging markets of the world have been pegged as growth areas for WiMAX vendors to exploit, but according to consultancy firm Ovum, the cost of the technology, coverage, vendor support and limited service provider choices will conspire to limit WiMAX to a niche technology.

Ovum's practice leader, Angel Dobardziev, said earlier this week that while there will be many WiMAX networks, uptake of the services will be low.

"Two thirds of the 300 plus WiMAX networks globally are in the emerging markets of Africa, Asia, Eastern Europe, Middle East and Latin America," he said. "WiMAX coverage will remain mostly in large urban centres where it will compete against DSL, HSPA/EV-DO and in some cases fibre services".

Dobardziev added that WiMAX is not competitive against fixed and mobile broadband alternatives in most urban areas of emerging markets, where virtually all existing WiMAX rollouts are.

Ovum claims that most emerging market WiMAX operators have at most tens of thousands of subscribers rather than the hundreds of thousands of subscribers they planned to have by now.

John Strand of Strand Consult agreed that the technology could be a limiting factor. The biggest problem, he said, is that the majority of WIMAX networks around the world have limited interoperability. 

He added that the WIMAX industry has not been very good at getting the handset industry to develop, market and sell devices that support WIMAX. In contrast, GSM operators have focused on reducing handset prices in order to offer inexpensive handsets to emerging markets.

"On a non-subsidised basis, it is currently priced and positioned as a broadband option only for businesses or wealthy consumers," Dobardziev said.

The limited interest could pave the way for some M&A activity, with consolidation among WiMAX service providers expected to take place over the next two to three years with established fixed or mobile players expected to acquire the WiMAX operators.

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