For Last-Mile Wireless, Fate of WiMAX in Carriers' Hands, says ABI.

Business Editors

OYSTER BAY, N.Y.--(BUSINESS WIRE)--Oct. 16, 2003

In the race to deliver broadband to consumers and businesses, many wonder if WiMAX will be another arrow in an incumbent's quiver or a new weapon employed by nimble competitors. In the dawn of this new market, traditional wireline carriers and wireless operators are trying to determine how - if at all - to embrace this technology. Technology market research firm ABI estimates that combined revenues of equipment for WiMAX and IEEE 802.20, another standard currently in development, will exceed $1.5 billion in 2008.

The majority of this will be WiMAX equipment, as 802.20-compliant gear won't likely reach the market until 2006. Companies developing compliant equipment include Alvarion, Aperto and Flarion, among others.

For underserved markets, WiMAX can be an economical choice to provide a last-mile wireless connection to extend DSL or cable modem footprints. At the same time, however, agile competitors, like TowerStream, can rapidly deploy systems to compete with incumbents in dense urban areas. WiMAX, also known as IEEE 802.16, provides fixed wireless broadband to a service radius of about 30 miles. WiMAX will face competition from DSL, cable modems and traditional T1 lines on the fixed access side. Future extensions to the standard will allow for portable or nomadic access. Further, the 802.20 standard, geared towards mobile users, will allow for fixed access as well. Thus, competition for mobile data will be just as fierce as that for fixed with WCDMA, CDMA2000 1X EV-DO and Wi-Fi networks expanding.

"Growth in equipment spending will be very strong, though much smaller in absolute terms compared to that of cellular networks," states ABI's director of research, Edward Rerisi. "But if this technology begins to gain traction, network effects may accelerate adoption and drive revenues even higher."

Specifically, recent research from ABI reveals that support from at least one major carrier will push this market into a wide-scale opportunity, beyond a niche opportunity for regional service providers. However, key to this development will be careful planning by the incumbents to determine how to best utilize this emerging wireless technology - just as they begin to digest their moves with Wi-Fi, another disruptive technology.

ABI's study on these markets, "WiMAX / 802.16 and 802.20: New Standards Revitalizing Broadband Wireless Access," outlines how these last-mile wireless technologies will enter the marketplace. Beyond equipment revenue, the report includes detailed analysis of the different user segments that will be served by these technologies.

ABI is a N.Y.-based technology market research firm founded in 1990. ABI publishes market research and technology intelligence on the wireless, automotive, electronics, networking and energy industries. Details can be found on the web at abiresearch.com or by calling 516-624-3113.