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700 MHz WiMAX $4 billion in 2011
While the media focuses on a half dozen multi-bilion dollar service providers (AT&T, Verizon and Google), the real story in the 700 MHz auction is the 200 FCC-approved bidders who are competing for blocks of spectrum in their immediate service areas with an eye to opening a range of revenue generating services while prying customers away from their competitors.
Many of those might be bidding for as little as one Cellular Market Area (CMA) license. Too small to be of interest to the investment community, you say?
Lets take another look. Its highly unlikely that AT&T or Verizon will make any seismic moves in technology deployments over the next 24 months. In contrast, the other 200 bidders are not in positions to warehouse their spectrum. Their investors and operators will want to leverage a rapid return on investment from the auctions forcing them to deploy some broadband wireless platform as soon as is practical.
Enter, for example, a 700 MHz FDD-capable WiMAX platform. In a fixed variant, its a triple play solution for a number of service providers. Add the mobile technology and its a quadruple play offering on one network. Vendors such as Airspan, Redline Communications and Telsima could offer this technology in the next 6 to 12 months.
Never heard of these vendors you say? Truth be told they are in the $50 million range of firms and are hardly household names. However, if 200 license holders spend an average of $10 million apiece on their WiMAX roll-out in 2009 and 2010, that's a $2 billion market. Add a range of handy CPE and handhelds causing the market to double that figure in 2011 and we're at a $4 billion market which equates roughly with what Sprint Nextel was supposed to spend rolling out their nation-wide 2.5 GHz mobile WiMAX network (no time table given).
Frank Ohrtman
WMX Systems
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