Despite LTE’s Success, WiMAX Shows Growth

WiMAX has suffered some public setbacks in the United States lately as WiMAX provider Clearwire Corp., with its promise to bring national mobile 4G broadband to the masses, has faced funding issues and delayed market build outs. The rival wireless technology LTE, meanwhile, has gained momentum and carrier backing as the de facto 4G standard for national networks in developed countries.

What’s more, Clearwire’s stock has lost 76 percent of its value since September 2008. But the reality is more complex. The fact is that WiMAX might in fact be poised for widespread uptake on a worldwide level.

Clearwire last week unveiled its plan for market rollout in its earnings call. “Even if they do not get additional capital, they will have enough to get started in the current climate,” said analyst Phil Solis at ABI Research, who has forecast a staggering 4,500-percent growth in subscriber revenue this year alone for global WiMAX services.

Clearwire’s new deployment plan calls for the launch of eight more big-city markets this year, along with a dual-mode 3G/WiMAX card that will let WiMAX subscribers roam onto partner Sprint-Nextel Corp.’s 3G network, making for more pervasive coverage. As it is, even with no 3G roaming and with just one market deployed — Portland, Ore. — Clearwire said service revenue rose to $59.7 million in the fourth quarter, compared with $45.4 million one year ago.

A Rising Tide

If Clearwire makes its new deployment targets, it could attract partner companies who can drive subscriber uptake. “At the same time you will have various MVNOs offering service as well — Sprint with its Sprint 4G service (EV-DO/WiMAX),” Solis explained, “and the cable operators who are invested in Clearwire will look to bundle services in the near term, then offer more complex services over various devices later on.”

More providers offering similar service also provides attractive economies of scale for device-makers. The involvement of giant chipmaker Intel, which has invested hundreds of millions in Clearwire to date, should also boost manufacturers’ confidence. Also helping is the fact that the marriage of the Sprint and Clearwire footprints clearly creates a national competitor in the broadband space — broadband being the operative term. “Some people make the mistake of thinking that Clearwire is somehow directly competing with mobile operators,” Solis noted. Initially the startup will compete only in providing broadband service for laptops and the small Web-connected devices known as “netbooks,” and “will compete more around consumer electronics later.”