By Adlane Fellah
At
the end of March 2008, Maravedis' WiMAXCounts research logged nearly 2 million broadband
wireless access/WiMAX subscribers. From fourth-quarter 2007 to first-quarter
2008, subscriber quarter-to-quarter growth was 19 percent and we have noticed
the same quarterly growth trend since first quarter 2007. With a residential
monthly ARPU of $48.08 and business ARPU of $146.02, this subscriber base
generated estimated quarterly revenues of $366.22 millions, an increase of 20
percent with respect to the previous quarter.
There continues to be more residential subscribers than business subscribers, despite operator tendency to focus on business offerings. 65 percent of the subscriber base is residential vs. 35 percent business. However, the typical customer mix among operators is 52 percent business and 48 percent residential. This split did not change from the previous quarter. North America was the region with the higher residential customer base with 78 percent residential and 22 percent business.
Approximately 64 percent of the operators covered by WiMAXCounts have commercially launched BWA/WiMAX; 23 percent are currently deploying the network or testing WiMAX; and the remaining 14 percent either have idle spectrum (10 percent) or have returned/lost the right to use the spectrum (3 percent). There were various operators that planned to launch during the first quarter of 2008 and postponed their commercial launch until later this year, such as Global Mobile (Taiwan), which plans to launch in early 2009 and Sprint Nextel which initially planned for a commercial launch of Xohm in April this year.
One of the most important events that occurred during the first half of 2008 was the definitive agreement signed between Sprint Nextel and Clearwire to combine their respective wireless broadband and WiMAX businesses. Sprint will contribute its 2.5 GHz spectrum assets to the venture. The new venture will have more than 40 billion MHz POPs in key U.S. markets through the combined spectrum assets of Sprint and Clearwire. The new entity hopes to provide coverage to 140 million POPs by the end of 2010. Maravedis believes this coverage will be reached towards 2015 at the earliest. It is expected that the transaction will be completed in fourth-quarter 2008. This will considerably impact the future of WiMAX in the U.S. The new entity hopes its head start and spectrum position will help it become the strongest 4G operator compared to those in the LTE camp.
There continues to be more certified 802.16-2004 deployments than mobile and proprietary deployments. We have seen, however, an increasing interest from operators in the mobile version of WiMAX. During this quarter we accounted for 88 deployments using certified 802.16-2005 equipment as compared to 74 in the previous quarter; 106 deployments in the 801.16-2004 standard as compared to 105 in fourth-quarter 2007, and 54 proprietary deployments as compared to 64 in the previous quarter. We attribute the decrease of proprietary deployments mainly to operators upgrading their networks to offer WiMAX either in its fixed "16d" or mobile "16e" versions.
There are operators that have hybrid networks that are deploying a combination of proprietary and certified equipment. New operators that signed agreements this quarter to deploy mobile WiMAX networks include Axtel (Mexico) with Motorola, Embratel (Brazil) with Motorola, BSNL (India) with Soma Networks, VTR (Chile) with Motorola, and VTEL (Georgia) with Alcatel Lucent, among others.
As shown in Exhibit 1, the largest mobile WiMAX deployments reported during first-quarter 2008 were from Korea Telecom with nearly 150,000 subscribers and Wateen Telecom (Pakistan) with more than 10,000 subscribers at the end of that quarter. Wateen is today the largest mobile WiMAX Motorola deployment. In June 2006, Wateen placed an order for 198,000 CPEs from Motorola. Motorola has shipped 60,000 CPEs so far. In our latest conversation with Wateen, the operator said they had 25,000 subscribers by the end of June 2008. The operator expects to complete the order of 198,000 CPEs within the next year. We expect the gap between mobile "16e" deployments and "16d" will narrow once trials of 16e equipment are complete and certified equipment becomes widely available.
Approximately 63 percent of worldwide deployments have occurred in the 3.5 GHz spectrum, while only 17 percent in the 2.5 GHz spectrum. There has, however, been a lot of activity in the allocation of WiMAX frequency bands in the 2.3 Ghz and 2.5 GHz range, especially in Europe. Since the lower the frequency band, the better the propagation characteristics, most operators are interested in obtaining spectrum on these bands to deploy mobile WiMAX networks. That is the case in Russia, for example, where the frequency range of 2300 - 2400 MHz can be transferred from its current military use to WiMAX allocations. It is expected that up to three new licenses may be issued in this frequency range. In Germany an auction is expected for 2.5 GHz -2.69 GHz spectrum, and in Sweden 5 operators were awarded 2.6 GHz licenses. Many other countries are getting ready for upcoming auctions in these bands such as the U.K., Austria and the Netherlands. This might accelerate the number of mobile WiMAX deployments in the world and at the same time narrow the gap between the number of deployments in the 3.5 GHz and 2.5 GHz band--that is, if the spectrum is acquired by non-cellular operators open to deploying WiMAX! This is not a guarantee at this point and Intel cannot invest in every greenfield operator!
Adlane Fellah is the CEO and founder of Maravedis, a research and analysis firm focusing on broadband wireless technologies including WiMAX, 802.20, TD-CDMA and wireless local loop systems.