WiMAX Gains In Emerging Markets

Last month in Geneva, Switzerland, WiMAX (IEEE 802.16) earned its spot among 3G mobile data technologies, as it gained the approval of the Radio Communication Sector of the International Telecommunication Union (ITU-R). That’s a big deal, since the ITU works with the United Nations to help governments worldwide allocate wireless spectrum. The ITU’s influence may mean more WiMAX rollouts in upcoming months, as it provides yet another high-speed wireless alternative for those ready to move beyond established 3G technologies, such as WCDMA.

As an upstart technology, WiMAX has gotten a lot of attention from various research and analyst firms this year.

According to Frost & Sullivan’s telecom industry manager, Janice Chong, WiMAX will be the technology of choice for many countries that possess a telecommunications “infrastructure handicap.” Because WiMAX is designed to deliver IP data traffic at multiple megabits per second over a range of several kilometers, Frost & Sullivan predicts the technology will be very important in India and Indonesia, Africa and China. The organization predicts mobile subscriptions in Asia Pacific (APAC) regions will hit the 1.14 billion mark by the close of this year. In its report entitled “Asia Pacific Mobile Communications Outlook 2007,” it was found that mobile subscriptions continue to be the dominating factor behind growth in the APAC region and other emerging markets in the Middle East and Africa (MEA).

Business Week a couple months ago reported that Asian farmers are using WiMAX high-speed services to transform agricultural outposts. From Cambodia to India, high-speed wireless services are used to monitor crop prices and place orders for goods. Increasingly popular are broadband "community centers" where farmers share information.

One prime example was the fact WiMAX was deployed in the rural agricultural province of Lao Cai, where 600,000 people along the Chinese border went from sparsely located telephone services to broadband and VoIP in a very short time period. Intel Corp., the US Agency for International Development (USAID), and local service provider Vietnam Data Communications, joined forces to deliver the service.

Governments in other areas are doing similar things to cross the digital divide. In Kenya for instance, the government has launched an ambitious program dubbed “Digital Villages,” which will use WiMAX networks to disseminate information to rural villages. The hope is that Kenya will become the ICT hub of Africa.

In the North African nation of Algeria similar initiatives are taking place. Analysys research has predicted there will be 2.2 million access lines and more than $650 million in revenue by 2012 for broadband access achieved through new wireless access networks like WiMAX. That will be a big jump, since subscriber figures in Africa numbered only in the thousands in 2006. A WiMAX operator tracking service called WiMAX Counts indicates there are now 20,000 WiMAX subscribers in Africa. But now that 62 WiMAX licenses have been purchased, most of which operate between the 3.4GHz to 3.6GHz spectrums, those numbers are expected to increase dramatically and quickly.

Cintia Garza, a senior market analyst at Maravedis Inc. says that African subscriber numbers have grown at an average rate of 28 percent per quarter, and the growth from the second quarter to third quarter 2007 alone accounted for 36 percent of the overall market growth. “One can expect to see even stronger WiMAX activity during 2008, as more players are added in the region and currently deployed WiMAX networks gain maturity,” says Garza. She notes that there are approximately 15 commercial deployments of WiMAX currently in the African region, with half of those having started operations this year. Additionally, there are 10 more commercial entities looking to roll out WiMAX in the upcoming year.

She notes that Africa’s population is just under a billion citizens, which means 13 percent of the world’s population resides there. For scale, 44 million people represent 4.7 percent of the total African population. Currently, only 1 million people enjoy broadband Internet connections. Now that WiMAX prices have dropped below those for DSL, the number of connections is expected to increase.

“The subscriber base for WiMAX in Africa is projected to reach 50,000 users by year end 2008 and more than triple by 2009,” says Garza, who is quick to point out that this figure could vary. The region still has low literacy levels, a low GDP and minimal PC penetration.

Despite the challenges in APAC and MEA regions, Maravedis research indicates global WiMAX will grow at a rate of 30 percent per year, which will mean a five-fold increase in APAC and MEA deployments by 2009. If that is true, WiMAX could generate about $2.8 billion. According to Maravedis, WiMAX currently makes about $ 600 million in emerging markets of the APAC and MEA regions. In India, which has more than 600,000 rural villages, Maravedis projects the growth potential for WiMAX will be 13 million subscribers in the next five years.