WiMax may have lost out to Long Term Evolution (LTE) as the dominant cellular broadband standard globally, but it will survive as a "niche" technology, said industry observers.
Chris Kissel, mobile Internet analyst at In-Stat, pointed out in an e-mail interview that WiMax had been positioned as world's mobile broadband standard, but this goal is unlikely to be realized. But while the "biggest fear" of the WiMax community has come true, the technology has not failed, he said.
"While WiMax was [positioned as] a mainstream technology, it will [now have to] settle as a niche technology," said Kissel.
According to him, WiMax may find roots in under-developed markets such as Latin America or Africa, where the technology could still be built in areas with little or no cellular service.
Michael Higgins, vice president of Alcatel-Lucent's Wireless Competence Centre in the Asia-Pacific region, concurred. In an e-mail, he told ZDNet Asia there could be room for WiMax especially in small markets focused on wireless DSL (digital subscriber line).
"For instance, countries in Southeast Asia or the South America with low copper penetration, low broadband and low income [may] have strong demands for high-speed Internet and voice," he said. Such needs, he explained, can be satisfied through a WiMax network for hotspots and nomadic type coverage.
In-Stat's Kissel added that WiMax may also find demand in the smart grid market. "WiMax is a reasonable backhaul technology and is still a low-power protocol, so chipset manufacturers may have an ancillary market in smart grid," he said.
How WiMax lost the battle
According to Kissel, LTE will become the 4G standard of choice. "Mobile operators that already had a stake in either a GSM or CDMA airlink ultimately decided to wait until they could either bolster their networks for higher capacity, either through HSPA or different releases of CDMA, or...until LTE became available," he noted.
"That was ultimately the problem with WiMax. To [implement] WiMax, a mobile operator had to build from the ground up as WiMax was not backward-compatible to any existing UMTS (Universal Mobile Telecommunications System) cellular standard," added Kissel.
WiMax, added Ovum senior analyst Nicole McCormick, failed to gain scale over competing technology WCDMA (Wideband Code Division Multiple Access)/HSPA (High Speed Packet Access) "for a simple reason".
"WCDMA/HSPA is the natural migration path for all frequency division duplex (FDD) operators around the world," McCormick explained in an e-mail interview. "In contrast, WiMax has been rolled out by mostly second-tier, non-traditional mobile operators, with a late mover disadvantage over existing mobile operators."
Even Alcatel-Lucent has shifted its focus from WiMax to LTE. Higgins said despite WiMax's "significant head start", LTE is expected to become the predominant 4G technology.
"LTE is quickly becoming a reality and the ecosystem is thriving, driven by the populous countries of China and India, with large scale deployments starting in the second half of 2011," he said.
According to a GSA (Global mobile Suppliers Association) report released in May, there are 208 operators worldwide investing in LTE, which is 98 operators more than in June 2010.
"For operators, the choice of technology takes a back seat compared to the availability of a strong ecosystem of devices to support the business case," Higgins added. "LTE is now recognized as the universal next-generation wireless broadband technology by many large operators. It's quickly becoming a reality and the ecosystem is much stronger and faster today compared to WiMax."
APAC still abuzz with WiMax
That said, Higgins noted that WiMax is not losing favor among service providers. He noted that the technology is well suited for wireless DSL and shows a good level of maturity in terms of performance and ecosystem, with network coverage in 150 countries and a subscriber base of 800 million.
Ovum's McCormick said WiMax is deployed in several main markets in the Asia-Pacific region, including Australia, Japan, Malaysia, South Korea and Taiwan.
"In Japan, UQ Communications has almost 1 million customers, basing its strategy on essentially an mobile virtual network operator (MVNO) model," she pointed out. "Customers are turning to UQ Communications' retail provider services because it offers very high speed in competition to the country's over-stretched 3G networks."
Meanwhile, in Malaysia, Wimax operators P1 4G and Yes have aggressive network rollout plans and price strategies, she said.
In-Stat's Kissel added that the WiMax market in Taiwan is "quite sophisticated", with no fewer than six significant service providers.
Over in South Korea, the government-supported WiMax development with KT is still prevalent, he said. At the same time, while wireless player SK Telecom is transitioning to LTE, it has a significant WiMax subscriber base.
LTE road bumps ahead
Despite LTE's dominance over WiMax in the future, Kissel said the adoption of the technology is not without its challenges.
"To date, there is still no unified voice-over-LTE standard," he explained. "The protocols are in place, but roaming agreements and handoffs between 3G and LTE have not been smoothed out."
Pricing, he noted, was another issue--LTE chipsets are prohibitively priced for feature phones.
That said, Kissel stressed that "LTE is coming".
"Not only is there a promise of great downlink and uplink speeds, but the problems of latency have been largely solved in 'packet-based' cellular infrastructure," he said. "The LTE standard also involves point-to-multipoint protocols that encourage applications like video conferencing."