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Portability will be major WiMAX revenue generator by 2012 May 4, 2007

Posted by Mustafa in 3G, Broadband, Broadband Pakistan, Global, Internet, ISP, mobile, Wifi, WiMAX, Wireless, World, Worldwide.

The increased take-up of portable and mobile WiMAX services will mean that, starting in 2009, growth in revenues from non-fixed WiMAX services will outstrip growth in revenues from fixed WiMAX services, according to a new report from Informa Telecoms & Media.

The report-‘WiMAX Broadband Convergence: Emerging Fixed, Portable & Mobile Revenue Opportunities’-also says that non-fixed-service revenues will account for almost 80% of total WiMAX service revenues by 2012.

As the first portable WiMAX devices arrive, in the form of PC cards and notebook computers, portable revenues will start to increase strongly and will provide almost half of total revenues by 2012, the report says.

Mobile devices will follow, according to the report, with revenues from mobile users growing even faster, albeit from a small base, to reach 30% of total revenues by 2012, showing the value that will be placed on the ease of use and flexibility provided by a variety of device form factors.

The largest element of WiMAX revenues worldwide will be access charges, growing to US$17 billion in 2012, Informa’s report says. Value-added services for both the consumer and business sectors are forecast to grow significantly faster, reaching about 30% of total revenues in 2012, while advertising is expected to start later but show the fastest growth of the three revenue streams, reaching just under 13% of the total by the end of the forecast period.

WiMAX revenues by service type, 2007-2012 (US$bn)

  2007 2008 2009 2010 2011 2012
Fixed 1.80 2.64 3.65 4.46 5.22 6.01
Portable 0.22 1.06 2.54 4.74 7.57 11.16
Mobile 0.01 0.17 0.66 1.74 3.72 7.16
Global total 2.04 3.86 6.86 10.94 16.51 24.33

Source: Informa Telecoms&Media “The assumption is that WiMAX operators will continue to charge flat-rate fees, similar to wired broadband fees, albeit with usage limits,” says Mike Roberts, a principal analyst at Informa. “This is in contrast to the per-megabyte fees charged by some mobile operators.”

Value-added-revenue streams will be derived from services aimed at both the consumer and the business sector, such as VoIP; e-mail; entertainment (including music, games, interactive TV/VOD and radio); information (including Internet searching, news and podcasting); and mobile-office/mobile-work-force products (VPN, intranet access, e-mail and scheduling applications).

In the WiMAX arena, services aimed at the consumer are likely to still be the main sector by 2012, driven by new forms of enhanced e-mail, combined with multimedia services, such as IPTV and audio/video clips, and the integration of web-enabled services with “rich voice” applications.

Take-up in the business sector is likely to increase with the merging of fixed and mobile functions (as seen in the BT Fusion FMC service), incorporating features such as single-number calling, intelligent conferencing and location-sensitive applications.

The forecasts assume that there will be a significant degree of convergence between fixed, wireless and mobile broadband services, meaning that a single subscription will often provide access to broadband via a range of networks, including fixed, wireless and mobile.

Business models are expected to be primarily based on subscriptions covering a basic access charge plus additional charges for selected value-added services. Prepaid charging is also assumed to increase alongside subscription-based models.

Advertising-funded business models will begin to be a feature of the market by 2012, the report says.

User-generated content will lead to viral marketing and widespread uploading/sharing of content, and VoIP will become a significant traffic generator (bundled into information/entertainment and business services), the report says.

Consumer e-mail will move into the mass market – using a push e-mail model similar to the BlackBerry, but not requiring special device or connectivity – and the business sector will begin to adopt advanced IP services, according to the report.

North America is forecast to be the largest regional market in terms of service revenues by 2012, largely because of the announced plans of major operators, such as Sprint Nextel and Clearwire. Next is Asia Pacific, where KT and SK Telecom have already deployed and where major operators, such as Japan’s KDDI, are waiting in the wings.

The report says that WiMAX will initially provide basic broadband access in emerging markets (the developing Asia Pacific countries, Latin America, Africa/Middle East) but will also evolve to support advanced converged services in these markets, though often later than in developed markets.

Given that the first certified WiMAX equipment only hit the market in early 2008, it is understandable that services based on WiMAX are still niche in most regions, the Informa report says.

The forecast figures cover both pre-WiMAX and WiMAX services, partly because these markets are closely related, and partly because there will be migration from pre-WiMAX to WiMAX. Even so, pre-WiMAX equipment is widespread and is forecast to remain in use beyond 2012.

For more information about the ‘WiMAX Broadband Convergence: Emerging Fixed, Portable & Mobile Revenue Opportunities’ report, contact jayshree.badhan@informa.com



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