The recent WiMAX World conference in Boston highlighted many key themes of the emerging market, but none more clearly than the gap between the mobile ambitions of the largest vendors and carriers, and the fixed wireless markets into which the first equipment is launching a gap that Motorola and others are seeking to bridge by bringing mobile gear to market at the earliest possible stage next year.

Nobody doubts that WiMAX serious disruptive potential in the traditional telecoms market, and so its revenue promise for vendors and carriers, lies in mobile broadband, but is there still a viable market for the technology in its fixed form? This does not have to be a question of whether operators choose to use the current 802.16-2004 platform or the future 802.16e standard, though the issues surrounding that choice have become very important since the simple transition path between the two technologies was destroyed by the decision to use an incompatible platform, based on Korea's Wi-Bro, for the second standard.

But 802.16e can be used for fixed operations too, and many argue that it will do so more efficiently than it predecessor. Indeed, it will not support high speed mobility and hand-off in its first generation at all and will be better positioned as a 'Wi-Fi-plus' system, supporting laptop or smartphone based portability alongside fixed access.

The key question addressed at the conference, then, was whether there will be a market for WiMAX (in either form) before it achieves cellular levels of mobility, that will be large enough to maintain operator and investor confidence and justify supplier R&D spending with strong sales. We believe this fixed market will certainly be attractive in its own right, particularly when subscribers can also be offered the option (possible from mid-2006 with either WiMAX variant) of a laptop-based service. Several factors draw us to this opinion:

Ultimately, a fully mobile WiMAX network of the type that will eventually form part of the road towards 4G is dependent on several pre-conditions that will only exist, at least in the first three years, in a few countries, notably Korea, and possible, because of Sprint Nextel and Clearwire, in the US. These include attractive and cost efficient handsets; a consumer base that can support an ARPU to justify the high cost associated with creating mobile networks; real demand for fully mobile services that cannot be delivered using a portable technology. This demand, and the income levels to support it, will be slow to develop in many countries outside the highly developed communications markets.

To create a usable mobile service, there has to be coverage, almost from day one, wherever a subscriber might travel. This means extensive build-out, of the type that only large carriers like Sprint can consider, or complex roaming deals between many localized providers. While waiting for this, there are still large sectors of the population that are calling out for cost effective broadband access, and will be more than satisfied with a portable solution based on a laptop or consumer device that can fall back to 3G when out of range. Wi-Fi has shown the strength of this model among consumers, but without the range, quality or spectrum options to create a
really good service.

WiMAX can provide a better experience, and so support a stronger profit model, than Wi-Fi and can be a powerful tool for disruptive operators such as Clearwire and, perhaps, Google to push their new approach to communications ownership. Mobility will certainly enhance that potential, but that is no reason not to exploit the benefits of first and second generation WiMAX in the short term.

This article originally ran in Wireless Watch, a publication of Rethink Research. Reproduced with permission. For information on the weekly Wireless Watch Newsletter and other Rethink Research products and services, click here.