Monday, March 1, 2010

Strong Growth for Mobile WiMAX Subscriber Base

By Basharat Ashai, Market Analyst, APAC & MEA - Maravedis

At the end of Q3 2009, 4GCounts reported 4.73 million BWA/WiMAX subscribers being served by over 200 operators, representing an 18% growth from Q2 2009, and an 80% growth from Q3 2008.

For the first time 4GCounts reported that the number of mobile WiMAX (802.16e-2005) subscribers has surpassed the number of fixed WiMAX (802.16-2004) subscribers worldwide. At the end of Q3 2009, the 802.16-2004 based CPEs accounted for 1.30 million CPEs. On the other hand, the number of 802.16e-2005 CPEs deployed accounted for 1.45 million. Q309 growth over the previous quarter for the 802.16d based CPEs deployed was 13% compared to 46.5% for the 802.16e-2005 based CPEs. With mobile WiMAX being deployed by heavyweights like Yota (Russia), UQ Communications (Japan) and Clearwire (USA), we expect it to dominate the worldwide WiMAX subscriber base in the coming quarters. For Q4 2009 we expect to see 1.5 million new subscriber additions, for a total subscriber base of 6.5 million by the end of last year.

When looking at the devices that 4GCounts operators are using, indoor modems have the largest market share, accounting for over 3.6 million units or 77%, followed by USB dongles with 595,000 or 13%, and 244,000 or 5% PCMCIA cards. Operators are still mostly focused on indoor modem CPEs and USB dongles, but they believe they will be ready to move to phones and Mobile Internet Devices (MID) in the coming quarters. WiMAX has to work with 3G and Wi-Fi to ensure devices (especially phones) support these interfaces. Devices also have to work on multiple WiMAX networks. Devices need to be certified to ensure interoperability, and to operate on multiple bands to facilitate roaming domestically and internationally.

As current 802.16e-2005 mobile WiMAX networks are deployed globally, work continues on the next generation of the technology, 802.16m, which will provide greater performance, capacity and flexibility over existing legacy networks. In October 2009 the WiMAX Forum and member companies announced their support of the 802.16m standard for consideration as an IMT advanced technology. Yota is the first operator worldwide to have trialed the new standard in partnership with Samsung. Yota plans to be one of the first operators in the world to install the technology once it becomes available.

802.16m has yet to gain market acceptance among WiMAX operators. While some companies are taking a wait-and-see approach before committing to the technology, companies expressing support include Beceem and Intel on the chip side, and Samsung, Huawei, ZTE, Alvarion and Cisco on the infrastructure side. Clearwire will consider preliminary trials in 2011, which is in line with when the first available commercial equipment will be available. Understandably, Clearwire is focused on growing their existing network and POPs coverage from 30 million to 120 million in 2010 based on commercial equipment that is available today. Yota might become one of the first 802.16m adopters.

The 802.16m profile is currently under evaluation and is expected to be ratified along with WiMAX Release 2 later this year. We should then expect to start seeing the first 802.16m dongles in late 2011 and more widespread commercial deployments starting in 2012.

In the most recent edition of the 4GCounts Quarterly Report (Issue 10), Maravedis has compared the pricing plans of leading 3G and mobile WiMAX operators by region. It would have been ideal to compare 3G and WiMAX pricing plans for identical same speed and data usages within a particular country, but the reality is that plans vary considerably in terms of speed, type of usage plan (minutes, versus bandwidth), and pricing. For the select group of leading WiMAX and 3G operators we found that 85% of WiMAX operators offer unlimited data usage, compared to 41% of 3G operators. This proportion will gradually decrease as operators look for new ways to manage data consumption.

On the LTE side, the second half of 2009 showed progress in terms of new operator commitments – 51 by the end of Q3 – but also in terms of device certification schemes and chipset development. Although dual mode devices including GSM, EVDO, and LTE are not yet commercially available, the first engineering samples of dual-mode chipsets were shipped in early 2009. Devices will become available in the second half of 2010 for dongles/embedded applications, but not until 2011 for handsets and lower power devices such as MiFi WiFi routers.

Although in its infancy, the LTE market has started to reveal its major players. In terms of infrastructure, Huawei seems to be the strongest manufacturer currently, with important awards in Austria, Italy, Uzbekistan and even Norway, which was expected to be under Ericsson and NSN’s veto. NSN and Ericsson are nevertheless maintaining their market share thanks to other awards (such as TeliaSonera’s deployment in Norway and Sweden), but they will surely have to manage this new competitor carefully. Motorola (awarded by KDDI) has been present from the beginning, taking advantage of its experience acquired through WiMAX deployments. This same path has been followed by Alcatel-Lucent, who has won contracts as the LTE infrastructure supplier for Verizon Wireless (USA) and Bouygues Telecom (France). The other official infrastructure supplier for Verizon LTE is Ericsson.
As far as devices are concerned, Samsung appears at the forefront, having signed contracts with TeliaSonera and MetroPCS (USA). In the second case dual CDMA-LTE handsets have been promised by Samsung. LG LTE device development is also quite advanced, which includes an in-house designed baseband chipset. In August last year LG successfully demonstrated the world's first live handoff of an active data session while moving between CDMA and LTE networks. Both Samsung and LG have been selected by Verizon as user equipment suppliers. Apart from these, ZTE is also trying to win contracts with any early commitment, being the sole supplier for the trial CSL is deploying in Hong Kong.

In the core (EPC) arena Cisco, Juniper and Ericsson could be considered the most important suppliers, being chosen respectively by the two biggest deployments in USA and Europe: Verizon and TeliaSonera. Alcatel-Lucent and Motorola also have EPC solutions, although have not been awarded relevant contracts yet.

4GCounts is a unique web-based service tracking 4G operator deployments and providing detailed information on the worldwide 4G ecosystem. 4GCounts currently profiles over 200 operators across 92 countries.
MARAVEDIS is a premier global provider of market intelligence and advisory services for the broadband wireless technology, regulatory and 4G markets, including LTE, WiMAX and backhaul at the RAN, devices and packet core levels.

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