A Paranoid Industry

ARTICLE

A Paranoid Industry

By Adlane Fellah, CEO and Founder

The emerging WiMAX industry seems paranoid. The majority of service providers don’t want to disclose their key metrics, in particular their subscriber counts. The privately-held equipment vendors only disclose vague information about their deployments and little to nothing about their real shipments unless under an Non Disclosure Agreement. This makes our work as analysts both challenging and valuable to the industry.

But why are industry players so reluctant to share their success stories? Is it that, as someone said to me, the “data are unpopular”? Could one not argue that empty criticisms made by opponents to WiMAX, such as “WiMAX has no business case,” are best met by hard data from real success stories, in particular from service providers?

We at Maravedis believe there is great value in doing the hard work of collecting key primary data from operators deploying WiMAX-certified, not-so-certified, and proprietary equipment in the field with real customers.

By the end of Q1 2007, the 110 operators in our industry-leading WiMAXCounts – theWiMAX Operators Tracking Service – accounted for nearly 1 million WiMAX subscribers. A total of 150,000 subscribers were added over the first quarter of 2007, for 17.5% quarterly growth. The year-over-year growth in Q1 2007 was 85%.

The United States, Spain, and Australia are the top three countries in number of subscribers. In Q1 2007 they had 0.5 million WiMAX subscribers. The operators with the most WiMAX subscribers within a single region in Q1 2007 are Clearwire (US), with a customer base of 232,000; Unwired Australia, with more than 63,500; Iberbanda (Spain), with over 40,000; and MVS Mexico (Clearwire’s partner in Mexico), with 35,000 (this last figure is from Q4 2006).

The following exhibit presents the top operators in number of BWA/WiMAX subscribers as of Q1 2007.

We understand that this is not an orthodox definition of WiMAX subscriber, that is, a subscriber using WiMAX-certified gear. The point is that we expect these BWA/WiMAX networks to remain hybrid for some time until replacing non-certified equipment makes sense. At the other end of the deployment spectrum, there are operators that presented very low subscriber figures. Operators in Korea, such as SK Telecom and Korea Telecom, have managed to attract only 1,057 subscribers with WiBro since the service was launched 8 months ago. WiBro figures are in no way an indication that the service is a failure, but simply that deployments of the emerging technology will take more time regardless of the political agenda.

North America presented the highest quarterly growth in number of WiMAX subscribers, adding 102,000 in Q1 2007, a 21% increase over Q4 2006. These numbers are of course primarily accounted for by Clearwire. Coming in second is the APAC region, which added 38,750 new subscribers, an 18.5% increase over the previous quarter. In Europe, the quarterly growth reduced slightly in Q1 2007, to 15.6%, from 18.8% of the previous quarter. This growth decline is largely attributable to Russia and Spain.

Those numbers are of course very low compared to mobile, cable, or DSL. But they have the merit of showing that BWA/WiMAX is deployed today and used by paying customers. Once the adoption of any versions of WiMAX start accelerating, the paranoia should start decreasing in proportion.