State of Telecom Industry in Pakistan

As LTE emerges, other standards such as WiMAX will have to compete to survive. The observation by Mr. Turner below about the technology brand is really important. Pakistan has become one of the earliest adopters of WiMAX and what happens there in the next 12-18 months will be very important for WiMAX. It might very well be that WiMAX is a success in one region but a fringe technology in other!

Via Communications Blog:

A recent Infonetics press release says “WiMAX has gained such momentum across so many regions that it is no longer sensible to suggest that WiMAX growth will be flattened by the emergence of LTE in the next few years.”

Probably true, but it’s also clear WiMAX will never reach the scale of either mainstream wireless family, i.e., WiFi or GSM/3GSM. By comparison with these giants, WiMAX will be a fringe operation. The critical issue is volume, and what counts is the wireless technology brand, not the technology itself.

Both WiFi and GSM/3GSM have already evolved through multiple generations of technology while maintaining backwards compatibility and thus interoperability. Within the GSM community, there may be no commercial LTE subscribers as yet and relatively few HSPA subscribers, but more than a billion GSM/3GSM devices are manufactured each year with individual chip set product lines running multi-hundred million units per year. WiFi chipsets also run at hundred-million units per year rates. These volumes (and the guarantee of interoperability) mean GSM/3GSM and WiFi devices will always be substantially lower cost than anything WiMAX aspires to. [Note: today there are slightly less the 2 million WiMAX subscribers while optimistic projections suggest there will be more than 100 million in 2012.] WiMAX may have technology leadership, but it can’t catch up. WiFi and GSM are the wireless families that will prosper, each in it’s sphere - WiFi for unlicensed, GSM for licensed spectrum.

WiMAX will benefit from technology specific licensing in some emerging markets, i.e., valuable spectrum tied to specific technologies, So WiMAX will survive, even while it’s more expensive than LTE or WiFi. As for market share, the optimistic parallel is “CDMA cellular”, i.e. IS-95/ CDMA One/ CDMA 2000. CDMA had technology leadership and it managed to capture nearly 20% of the 2G cellular market at it’s peak, but it could never overtake GSM and, today, major operators are jumping ship to join the 3GSM crowd.

There may be a decade of contention, but in the end, WiMAX will die or be absorbed into the GSM brand.