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Forecasters divided on WiMAX' prospects in pressurized market
Published: 27 February, 2009
Tags >> WiMAX
Market leaders Ericsson and Nokia Siemens may be playing it cool, but one new report forecasts a double-digit decline in mobile infrastructure revenues this year, which if true would surely affect them. In the context of a serious pullback in operator spending, pundits are divided on whether WiMAX will be resilient, taking advantage of the postponement of LTE plans, or will suffer because of the small size of many of its vendors.
Most major carriers, so far at least, have not officially cut capex estimates for 10%, but Telefonica may have started a trend this week with the announcement of a 10% reduction for 2009. Even those that are not formally slashing budgets are looking for greater cost efficiency, turning to HSPA upgrades rather than new networks, or pooling resources with other operators.
Against this backdrop, IMS Research is forecasting a double-digit fall in revenue for the sector, with Mobile WiMAX hardest hit as pure play vendors are hit by the credit crunch. By contrast, another research firm, In-Stat, predicts that Mobile WiMAX will outpace LTE between 2009 and 2012 because of its commercial headstart. The firm says that LTE will have 23.1m subscriptions in 2013, up from 176,000 in 2010, while 82m WiMAX PCs will ship in 2013.
A third group of forecasters, Infonetics Research, says WiMAX is holding steady. In the fourth quarter of 2008, it said the overall market was worth $275m, about the same as in Q3, while the mobile segment rose by 5%. WiMAX subscribers hit 3.9m at the end of 2008, up 120% year-on-year. Mobile WiMAX equipment sales (ASN gateways, base stations and CPE) rose 188% on the previous year, while sales of 802.16e devices grew by 121%.
The company believes Cisco and Huawei will be the dark horses in a pressurized market this year, becoming key challengers as Nortel exits. "As the year progresses, we will see more intense competition for the fewer new contracts, and a tight race for market leadership," said directing analyst Richard Webb. "Currently Alvarion, Alcatel-Lucent and Motorola lead the field, but there is evidence to suggest that both Huawei and Cisco are coming up on the outside lane." The main revenue growth this year will come from CPE and devices, as these proliferate and as early operators sign up more customers.
Meanwhile, IMS is looking for a quick recovery from 2010, and despite the squeeze on network spend, believes the growth in mobile data users will not be much affected by the recession. The total mobile data infrastructure market is expected to be worth $30bn to $35bn by 2013.
