3G is Dead: Long Live WiMax - An Analyst's Perspective (Cont'd)

The writing appeared on the wall when, last year, the mobile vendors began to introduce so-called 3.75G – and even 3.99G services, such as HSPD. This was like seeing those confusing 2.5G business model scenarios all over again. By that time most operators had not even started with the roll-out of 3G, a clear indication that 3G was too little, too late. So far, very few mobile operators have made any significant investments in these new 3G versions, and I would strongly advise against any such investment in the wake of new wireless broadband developments. True, WiMAX and UWB will also have to deliver on their hype, but there is a positive groundswell towards this development and it is very much in line with other communications developments, like the Internet, broadband, MP3, DVRs, etc.

The far more cost-effective wireless broadband mesh networks will spread like wildfire. The Unwired example in Australia shows that, through clever partnerships, nationwide interconnection can be developed at relatively low cost – in this case via a partnership with the regional pay TV operator, Austar. While I do not underestimate the market power of the mobile operators, they are certainly going to get a run for their money, particularly since many of their business models are based on unsustainable handset subsidies, extraordinarily high termination rates and expensive fixed-to-mobile prices.

As well as new entrepreneurs entering this market we will also see municipalities becoming involved in such networks – especially those that are suffering from poor fixed broadband infrastructure. The United States is leading this market. Mobile operators will now have to decide whether to move further into the mobile market with 3.75G and 3.99G solutions, or to become involved in the very disruptive wireless broadband technologies. Most of them will be betting each way, which will make it even more difficult for them to focus on the new opportunities.

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