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This report analyzes the current WiMAX operations worldwide, evaluating operator business models, network economics and the overall market opportunity relative to UMTS/HSPA and LTE. The objective is to assess which technology delivers the most popular and profitable mobile voice, broadband and video services in the context of specific market conditions: case studies examine UQ Communications (in Japan), Clearwire (the US), Mobily (Saudi Arabia), Digicel (Caribbean), Tata (India), Umniah (Jordan) and Yota (Russia).

Key findings include:

- The number of WiMAX deployments – currently more than 500 across 145 countries – is greater than that of any conventional 3G technology and more than 50% greater than the number of HSPA network commitments. However, most WiMAX deployments to date have been small, serving targeted communities, businesses and private institutions. As a result, WiMAX covers only 6% of the world’s population, which is far behind the 85-90% that conventional mobile networks cover. We do expect WiMAX coverage to increase, although rather slowly on a global basis, with 10-12% population coverage by year-end 2010. Many of the larger WiMAX deployments are still underway, and many large countries such as India, Indonesia and Vietnam are just beginning to issue WiMAX licenses. Some of the largest WiMAX operators in the world in terms of coverage will be Clearwire (US), UQ Communications (Japan), Globe Telecom (Philippines), Yota (Russia) and Safaricom (Kenya).

- More than 80% of all WiMAX deployments are fixed networks that use 802.16d, a standard that leading vendors such as Alvarion and Huawei no longer ship. Going forward, we expect all WiMAX operators to use 802.16e equipment even if regulatory bodies restrict them from offering mobile services. The first available WiMAX devices were PC cards and USB dongles, followed by laptops with embedded modems, leaving operators no choice but to first go after mobile broadband customers. Those markets with the lowest broadband penetration rates represent the most upside, and we estimate that roughly 70% of WiMAX deployments are in emerging markets, led by the Africa and Middle East region with more than a quarter of global deployments.

- Factors driving operators to deploy WiMAX are speed to market, surgical network deployment opportunities, mobility, multiple-use scenarios, its IP architecture, and the cost of spectrum and deployment. WiMAX operators in competitive markets look to differentiate themselves from existing fixed and mobile broadband options by promoting a combination of the following benefits: portability, mobility, flexible pricing plans offered without contracts, enhanced applications, simplicity of service activation, service quality and security, superior customer care and higher throughput. Mobile virtual network operators (MVNOs) will be an instrumental piece of many WiMAX operators’ business models.

- On average, WiMAX pricing tends to be more expensive than DSL pricing, but the difference has already begun to diminish, and the two will blend further by 2014. In contrast, prices for WiMAX-based broadband service are generally US$15-25 lower than for conventional 3G (UMTS/HSPA, EVDO) service at similar download speeds. In general, WiMAX operators target different markets than other 3G players, which boast a substantially larger addressable market of voice customers.

- If an MNO is concerned about the service quality of its core services due to an overloaded network, a straight 3G upgrade is more suitable than adding WiMAX as a parallel data network, because mobile voice customers represent a larger target opportunity than fixed broadband customers. Mobile voice is still the most important driver of revenue for mobile operators worldwide, comprising 75% of total global service revenue.

- Certain emerging market operators would benefit from bypassing 3G in favor of moving to LTE in a few years. But this decision depends on spectrum resources, the competitive landscape and the need for better spectral efficiency, which is impacted by voice and data traffic levels.

- Increasing volumes of WiMAX customer premise equipment (CPE) shipments and improvements in production are reducing device costs and increasing affordability. Just a few years ago, the CPE cost was more than $300, but these days it is reportedly less than half of that amount – about $50-150. In the Cayman Islands, Malaysia and the US, for example, WiMAX operators offer WiMAX CPEs for $60-100 with minimal subsidization.

- WiMAX is a better technology for providing broadband access than HSPA and boasts higher spectral efficiency, a lower cost per bit, as well as lower costs for spectrum and intellectual property rights (IPR). Despite HSPA’s greater scale, WiMAX USB dongles are priced competitively and even less expensive in some cases compared with other 3G USB dongles. WiMAX benefits from having a more centralized ecosystem in which interoperability does not have to take place on an operator-to-operator basis as it does with HSPA. Despite these positives for WiMAX, scale, coverage, roaming potential and the device ecosystem, not performance, determine the popularity of mobile broadband access technologies.