How will WiMAX in the US reach 10m users by 2010?

by Jeff Orr, Editor
Mobile Broadband News

The recent VON.x conference in San Jose hosted a WCA panel entitled, “Whither WiMAX”. Moderated by M:Metrics analyst Seamus McAteer, the panel consisted of:

• Rohini Chakravarthy, Principal, New Enterprise Associates
• Ron Resnick, President and Chair, WiMAX Forum
• Ben Vos, VP Core Technologies, Sprint Nextel
• Greg Welch, Market Development Director, WiMAX Program Office, Intel
• Paul Sergeant, Sr Manager WiMAX Marketing, Cisco Systems (formerly Navini Networks)
• Tom Gruba, Sr Director Marketing MOTOwi4 and WiMAX, Motorola

The highlight was an excellent question posed by moderator McAteer – “when will the US reach 10 million WiMAX subscribers?” Most panelists raised their hands for 2010. Putting this into perspective, McAteer noted that about 220 million Americans (ages 13+) have mobile phone service. Ten million WiMAX users, roughly 5% of the mobile phone population in a 2-year period, could prove challenging. The Apple iPhone will not reach 10 million subscribers at its 2-year anniversary. Why will WiMAX ramp at a faster rate than the iPhone?

Ben Vos, VP Core Technologies at Sprint Nextel, said surpassing that milestone comes down to coverage and the right set of devices. Coverage can only occur through establishing sufficient population coverage to make services widely available. Coverage also requires up-front infrastructure investment, he said. Sprint has not revised its capital expenditure plans; a $5 billion value expected to be significantly reduced in light of the company’s financial and customer hemorrhaging.

Vos went on further to describe that the right set of devices that offer a rich experience is necessary to create appeal for WiMAX. The market must move towards non-subsidized behavior and new distribution channels have to be formed. Sprint’s Vos was the sole panelist who felt that 10 million US subscribers could be attained before 2010, opting for the 2008 answer that was not offered by the moderator.

An attendee who I spoke with felt the questions were compelling, but the panelists failed to seize the opportunity and explain how WiMAX will achieve significant adoption in the US. Instead, vendors spent time echoing company agendas and the group concluded that WiMAX will be wildly successful.

Ironically, a presentation of the same title was made during a July 2004 WCA event by then-president of WiMAX Forum, Intel’s Margaret LaBrecque. Perhaps the 2012 WCA panel (which I predict will also be called, “Whither WiMAX”) will provide an update on how the US will participate in the adoption of mobile broadband services.