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Report Finds Limited WiMax Market Growth in Australia

  • 10 June, 2008 08:47

<p>SYDNEY, 10 June 2008 – New analysis from Frost &amp; Sullivan finds that the Asia Pacific region can potentially boast of 43 million WiMax subscribers by the end of 2013 and generate estimated revenues of close to US$11 billion at a compound annual growth rate of 45 percent (2007-2013). However, Australia will only make up two per cent of the Asia Pacific region’s WiMax subscriber base by 2013.</p>
<p>The findings are part of the report titled The Asia Pacific WiMax Opportunity, released by global growth company, Frost &amp; Sullivan. The comprehensive study finds that WiMax holds promising potential as an alternative technology to connect underserved rural areas that will never realistically receive fixed-line services.</p>
<p>The sweet spot for WiMax is its ability to provide voice and data connectivity at speeds of up to 1Mbps in Asia’s emerging markets where such digital divide exists. This massive untapped segment is expected to drive WiMax deployments in the Asia-Pacific, despite competition from 3G technology and the regulatory issues in some countries.</p>
<p>Australia’s prospects for WiMax recently received a major blow with the cancellation of a US$958million subsidy for a national broadband plan, which was offered by the Australian Communications Authority (ACA), to the OPEL consortium made up of Optus and Elders.</p>
<p>At the same time, Australia’s wired broadband network has made leaps and bounds in the past two years as ADSL2+ rollouts have both significantly expanded coverage and service and quality. Telstra has one of the fastest 3G networks in the world up and running and has no plans to adopt WiMax in the near future. However, high broadband pricing and capacity constraints might still create a niche for some lower-end users but given that 77% of the country’s households already have broadband service, the report finds fairly limited demand for the service in Australia.</p>
<p>The emerging markets are expected to account for nearly 80 percent (or 34.4 million) of the total subscribers in 2013, collectively contributing 69 percent (or US$7.59 billion) to the region’s total WiMax revenues given their low average revenue per user nature.</p>
<p>As at end-2007, Asia’s household broadband penetration stood at 3.4 percent. This translates to nearly 3.7 billion people in the region who have yet to adopt broadband access services - a figure significantly higher than the world’s entire mobile subscriber base. Asia-Pacific, as such, remains the best test-bed for WiMax in terms of subscriber uptake and network deployments.</p>
<p>“In such a diverse market, the business models for WiMax will depend largely on service level uptake, as operators in emerging markets will focus on enterprise users before catering to the mass market,” says Frost &amp; Sullivan senior industry analyst Marc Einstein.</p>
<p>“Transition markets such as Malaysia will focus on the underserved pockets in urban areas, while operators in markets such as Japan and South Korea will drive new business models by embedding WiMax chipsets in a wide range of consumer devices including cameras and game consoles to pioneer WiMax-enabled mobile devices,” he adds.</p>
<p>WiMax adoption to-date however has been lukewarm and it still faces a number of challenges ranging from regulatory issues to weak operator support to high CPE (customer premise equipment) prices.</p>
<p>According to Einstein, WiMax clearly has the potential of bringing Asia’s masses online, “the real issue facing WiMax is not its technical capabilities, but whether it will get enough traction and stakeholder involvement to graduate from a niche application to a mainstream technology that can be profitably deployed at price points that will drive wider adoption.”</p>
<p>Of the 17 Asian countries in the study that were ranked for regulatory support and operator willingness to deploy the technology, Pakistan, Sri Lanka and India topped the list due to excellent incumbent support, favourable regulatory regimes, and considerable untapped growth.</p>
<p>“While the regulatory restrictions continue to ease up, some large Asian markets such as China and Indonesia have made very little progress in licensing WiMax,” notes Einstein, adding that China alone has the power to make or break WiMax service in the region if its government continues to delay WiMax roll-out as it did with 3G. Given a favourable government stance, China is forecasted to account for as much as 45 percent (or 19.35 million) of the total WiMax subscribers in 2013.</p>
<p>However, as large established operators such as Japan’s KDDI and India’s BSNL continue to pursue deployments, Frost &amp; Sullivan believes that WiMax may just get a fresh lease on life in 2009.</p>
<p>The Asia Pacific WiMax Opportunity study is part of the Mobile &amp; Wireless Growth Partnership Service program, which also includes research in the following markets: mobile broadband, mobile content, telecom services, 3G, location-based services, mobile devices, emerging market strategies, and wireless data trends. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.</p>
<p>Frost &amp; Sullivan, the Global Growth Consulting Company, partners with clients to accelerate their growth. The company's Growth Partnership Services, Growth Consulting and Career Best Practices empower clients to create a growth focused culture that generates, evaluates and implements effective growth strategies. Frost &amp; Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents. For more information about Frost &amp; Sullivan’s Growth Partnerships, visit http://www.frost.com.</p>

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