New Report Assesses the Economic Realities of Launching a New WiMAX Business

Business Wire, Nov 22, 2007

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c75044) has announced the addition of WiMAX Business Models: Will New Networks Ever Become Profitable? to their offering.

WiMAX deployments continue to increase in number, with the technology being adopted in more than 70 countries across the world. The business case, however, is yet to be proven, and the main question remains unanswered: how will WiMAX operators make money?

Should a WiMAX business model resemble that of fixed broadband or 3G, a mix of the two, or something completely new? To be sure, the development of an ecosystem of WiMAX-enabled consumer electronics could create the possibility for new, innovative services -- and hence new revenue streams. In a bid to ascertain whether WiMAX is truly worth the risk, this report analyzes the business models as well as operating and financial metrics of existing and prospective WiMAX deployments in emerging and developed markets as well as for enterprise use. In reviewing the economics and profitability of WiMAX operations in different environments, the report uncovers WiMAX business models that have more in common with traditional broadband operations, which in the residential market are experiencing increasing commoditization and declining margins. There is a push, led by Sprint Nextel's Xohm project, toward turning the traditional model on its head, from a predominantly subscription-based story to an open-access model that relies on the development of a strong ecosystem of consumer electronics manufacturers, content providers and third-party service providers.

The report is accompanied by three Excel-based financial models, which track the operational and financial performance of WiMAX deployments built around the following parameters:

- Large-scale deployment in a developed market by an MNO (assumptions driven by Sprint Nextel's WiMAX business model)

- Build-as-you-go deployment in an emerging market by a market entrant (assumptions driven by Bulgarian operator Max Telecom's WiMAX business model).

- Service provider focused on the enterprise market.

On close examination, we find some parts of the WiMAX value proposition fairly compelling, and others not entirely convincing.

Key questions answered

- What kind of business models, strategies and revenue streams will be offered in mature and emerging markets?

- What are the economic realities of launching a new WiMAX business?

- How will open-access models change the scope of mobile broadband business models?

- What is the profitability potential of different WiMAX business models?

- What are the key drivers of profitability (or lack thereof)

Target audience

Operators

Quantify the long-term revenue potential of the different WiMAX business models to determine whether to adopt WiMAX as a complement to existing networks or as a substitute for other broadband options.

Vendors

Assess the opportunity for WiMAX infrastructure, devices and services in different market environments.

Financial institutions

Assess the viability of WiMAX business models to support decisions on investment opportunities in new and existing WiMAX ventures.

Financial services, investment firms

This report will help you assess the long-term financial prospects for mobile service providers and telecom equipment vendors at a global level. The report forecasts of metrics such as mobile subscriber and user penetration will help you make strategic decisions to maximize the return on your investments.

About the authors

Dan Locke, Analyst

Dan Locke is an Analyst for a Media and Technology team. He is based out of Cambridge, Massachusetts. As a member of the MT Research Group, Dan is responsible for conducting in-depth research about emerging technologies. Dan's work is focused on mobile broadband, and he tracks the US and Canadian mobile markets. He recently completed a report on WiMAX spectrum costs and is currently working on a report about mobile operator capital expenditures. Future projects on his agenda will include comprehensive analyses of WiMAX.

Co-author: Ozgur Aytar

Working from the company's headquarters in Cambridge, Massachusetts, Ozgur Aytar is a Research Manager in the Communications, Media and Technology (CMT) Research Team. The CMT Research Team focuses on emerging business models and technologies in the communications and media markets, and as part of this team, Ozgur spearheads the analysis of vendor business models, the MVNO model, and broadband business. In addition, Ozgur is the Editor-in-Chief of a monthly newsletter, Next Generation Trend letter, which provides a global assessment of industry best practices and analysis of the drivers and barriers to the success of new business models and technologies. Ozgur's published reports include: Can WiMAX Challenge 3G? Performance, Economics and Opportunities, Transforming Telcos with Triple Play: Key Lessons and Best Practices for Winning RGU Strategies, MVNOs and MVNEs: Analyzing the Viability of Virtual Players; Transforming Telcos with IPTV: Business Models, Competition and the Content Challenge; Mobile Operator CAPEX: Charting the Transformation of Mobile Carrier Spending; and Positioning WiMAX: How It Stands Against Cable, DSL, Wi-Fi and 3G.