The WiMAX Forum estimates that at least 100 WiMAX operators will launch commercial services this year, according to an article in RCR Wireless. The same article states: “With investments already made into WiMAX, the wireless broadband technology will be able to withstand the current economic downturn in a year that will see some additional network deployments . . .”
While WiMAX technology itself may withstand the financial crisis, many of the operators won’t. So it doesn’t matter how fabulous WiMAX may be from a technological standpoint. Even if 100 or more WiMAX operators do get around to “launching” “commercial services” this year, that fact alone is utterly irrelevant, except to the PR departments of these operators and their investors. This is not any indication that WiMAX is about to slay the LTE dragon forever. Nor does it guarantee that the operators will become profitable anytime soon, if ever.
Punching holes in the PR nonsense that passes for news
(1) The relevant statistic is how many paying customers a WiMAX operator has. Maravedis estimates that the number of WiMAX subscribers rose to 2.68 million worldwide by the end of the third quarter of 2008, but that number includes people who are using “pre-WiMAX” equipment. In my opinion, those people should be left out of the statistics. So what would that number be without the pre-WiMAX folks? Who knows?
Paul Kapustka wrote in Some Questions for Clearwire that Clearwire should publish subscriber numbers:
Since Clearwire’s services in Portland, Ore., didn’t launch until Jan. 6, the company probably will duck reporting any numbers from that market. But there should be no such excuses for breaking out signups from the Sprint-launched “Xohm” services in Baltimore, which have been live since Sept. 29 (and which Clearwire inherited when it absorbed Sprint’s WiMax operations). Haven’t seen any predictions but our guess is that the number will be small — in the tens of thousands — with anything over 20,000 a moral victory.
I would like to see real WiMAX numbers from operators worldwide, especially for nomadic and mobile WiMAX. Given many operators’ reluctance to publishing these numbers, my guess is the figures are too alarmingly low to release. I would like the WiMAX Forum to publish these statistics in tabular format (and please leave out the pre-WiMAX people) and show the subscriber growth rate over time. Post a comment below if you know of any website that has published these statistics.
(2) I feel very sorry for the word “launch”. It has been abused and forced to carry the burden of so many meanings heaped upon it by careless (or devious) PR hacks. I’ve seen it used in WiMAX press releases to mean:
- turned on a couple of base stations to comply with the bare legal requirements for the WiMAX license (sometimes means the national regulator is about to take away the operator’s WiMAX license because the operator is taking its sweet time to roll out service);
- turned on more than a couple of base stations for a “pilot” project (another meaningless term, that one);
- turned on lots of base stations AND put up fancy website announcing pilot project and free WiMAX service for the first six months, but still not collecting money from users.
To me, “launch” means the operator is now accepting cash for its services. There is a page on the operator’s website which has pricing information for subscriptions, plus terms and conditions and a button that says “Pay Now”. See Aerea, the Amsterdam WiMAX service that launched recently. How many people Aerea gets to pay for its service so that it becomes profitable is another matter.
(3) “Commercial service”: another word abused by the PR machinery to mean . . . whatever they want it to mean including pilot projects, test beds, trial networks — anything but the thing that matters most: taking my money.
As operators and their investors become more desperate in the coming months, look for more breathless press releases, but remind yourself that the most important statistic is the number of paying customers. Until this information is made public, every other measure of “success” is totally irrelevant and the prediction that WiMAX technology may indeed outlive WiMAX operators will come true.
The 100+ WiMAX operators who will be “launching” their service face the worst market conditions in recent memory. People will not pay for WiMAX service unless (a) it is a good replacement, at lower cost, for a service (DSL, cable, cellular) they are already getting, or (b) they have no broadband in their area AND they can afford to pay the monthly fees. “Nice to have” or “cool to have” is not enough. People are cutting spending and even US cellular carriers are seeing the words “prepaid” appear in the American news, as in “Why Not Consider Using Prepaid Mobile Service?” For non-American readers, “prepaid” mobile phone service in the US carries a class stigma: it’s meant for a lower-income, bad credit risk person usually living in a blighted inner city neighborhood. Unfortunately more of the American middle-class are joining the ranks of the bad credit risk crowd.
More word gymnastics: Mobile versus nomadic WiMAX
Now that I’m on a rant about words that have been abused and twisted in our wireless universe, why not mention the distinction between mobile and nomadic WiMAX. I have been taken to task by several people on the MuniWireless/MuniWiMAX Linked In Group for the way I’ve used mobile WiMAX which to me means I can use WiMAX service with a dongle or an embedded WiMAX chip in a device while sitting on a desk or my bed (no modem needed). Apparently, purists consider “mobile WiMAX” to mean just that — you are in a moving vehicle and can still use the WiMAX network.
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UPDATE (13 August 2010): Aerea has gone out of business. Yota, the Russian WiMAX operator, has switched to LTE. Freedom4, the UK WiMAX operator, also gone. Several Croatian WiMAX operators have given their WiMAX licenses back to the government. No money there.
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And what about WiMax mobile devices? are there any cool WiMax phones that can compete with 3/4G phones? If WiMax will only rely on home CPE as a fixed wireless deployment, volume will never be big. Attractive handsets are a key to WiMax large deployments – I could not find any on Clearwire website.
Nokia cancelled the WiMAX tablet without giving any credible reasons. Very sad.
The “beginning of the end” for Nokia’s interest in WiMax (especially Xohm/Clearwire deployments) was when Google signed on as a Clearwire investor. Gotta believe it is Android’s expected involvement that turned Nokia off on WiMax in the U.S. market.
Samsung did show a WiMax MID at MWC, and there is a WiMax/GSM phone from HTC for the WiMax network in Russia. So far, nothing similar for Clear.
Esme,
Surely some of there PR types could come up with a better name, (For non-American readers, “prepaid” mobile phone service in the US carries a class stigma: it’s meant for a lower-income, bad credit risk person usually living in a blighted inner city neighborhood.) for Pre-paid while they are waiting for the WiMAX numbers to increase before putting out the next press release?
pay-as-you-go is a much more friendly term and widely used here in the UK
I think number for pre-WiMax and fixed wireless should be included. Many of the promised 100 WiMax networks are networks that would likely have deployed with more proprietary solutions before WiMax standardization.
The difference between fixed and mobile varieties of WiMax is also important in the required investment. Mobile WiMax is much more expensive to deploy with base stations 3-4x more expensive and with greater deployment density required in order to cover mobile users.
Why has no one mentioned that Towerstream also spent millions in buying the FSS grandfathered licenses in Florida and are working to do so in the NE.
With this “Earth Station” license they claim a monopoly in that market buy refusal of 3.65 GHz spectrum by other broadband providers. The FSS earth station license gives the earth station the ability to grant or refuse broadband providers use of that air space for 150 km around. They (Towerstream) claim it will interfere with their operations in that market. Yeah! Hello! ?? Anybody else see the FCC failing and falling on its face because of loosely written regulations? How the heck can that be legal?
Concerned Consultant
PS: We already got a black eye from Metro-Fi and Erathlink screwing the pooch for Muni Wi-Fi, and now we are going to let Towerstream and Clearwire define the life or death of “AMERICAN WiMAX”?????