WiMAX deployments hit by economic downturn as subscription rates and service revenues lose pace, says Maravedis

WiMAX subscribers worldwide reached 2.68 million in the third quarter of 2008 – a modest 13% growth over the first quarter and a 91% increase from the same period one year earlier, according to Maravedis. Global service revenue growth is losing pace as WiMAX operators experience ARPU (average revenues per user) stagnation and slowing down, or even a decline (as in the case of WiBro in Korea), in WiMAX adoption. The economic downturn is accelerating the shift in consumer spending toward flat rates for broadband wireless and replacement of landline services.

"These are very difficult times for mobile WiMAX as both vendors such as Telsima and leading WiMAX operators such as Tata are struggling to fund their WiMAX plans noted Adlane Fellah," CEO and founder of Maravedis. "Further, in the PR battle, mobile WiMAX has been losing momentum in favor of LTE as it becomes clear that LTE will become the dominant 4G technology among Tier 1 mobile operators worldwide," he added.

"The picture is not all bleak however. More mobile WIMAX enabled devices were certified during the quarter, and the growth rate for base station sector deployments continues to outpace that of CPE (customer premise equipment), which indicates that networks are expanding ahead of the adoption curve," noted Cintia Garza, WiMAXCounts team leader.

"It is important to keep in mind that WiMAX is just now entering a phase of commercial availability that makes volume applications including machine to machine, utility monitoring, metro-wide mobile broadband and embedded consumer applications feasible. In addition, the lean WiMAX ecosystem has already reached price points for ICs, modules and devices to compete in volume markets," explained Robert Syputa, partner & senior analyst at Maravedis.

Maravedis indicated that WiMAX deployments in 2009-2010 are being revised to more modest projections The average subscriber base per deployment remains very modest at 15,000 and contributes to the lack of volumes facing the emerging device ecosystem. Clearwire USA continues to be the top operator in terms of the number of subscribers, with 469,000 subscribers in the United States at the end of the third quarter 2008, an increase of 1.54% compared with 461,850 subscribers reported in the previous quarter. The launch of the Clear service by Clearwire is yet in its infancy, The split by subscriber type among operators remained steady at 64% residential and 36% business. The third-quarter recorded ARPU was US$46.45 and US$125.48 for residential and business subscribers respectively, compared to US$46.70 and US$135.30 for the same segments in the previous quarter.

The total number of WiMAX CPE units deployed as of September 2008 reached 2.68 million, up 15% from the 2.33 million tracked in June 2008. A total of 121,269 base station sectors were deployed as of the third quarter 2008, a 37% increase from the previous quarter.