It was just two years ago when WiMax players and other terrestrial operators were making efforts to gain access to C-band spectrum and the satellite sector had to organize a massive effort to retain its ability to use the spectrum.

Despite satellite emerging victorious in its efforts, it was merely seen as a bump in the road by some of the terrestrial players, and they remained confident that the demand for WiMax and other terrestrial services would be in such high demand that they would overwhelm satellite players in the market.

Now the WiMax players may be hitting some of their own external problems. In August, research firm Analysys Mason released a report calling into question the ability of North American and European WiMax markets to grow and sustain continued investment from companies such as Cisco Systems, Google, Intel and Motorola, as sales have been slower than expected. Terry Norman, senior analyst at Analysys Mason, said his firm especially was alarmed by WiMax investors writing off billions of dollars in Clearwire, majority-owned by Sprint, which is planning to roll out a national WiMax network through Clearwire this year. “This does not look good for WiMax,” according to Analysys Mason.

Analysys Mason’s report also cited WiMax’s current Long Term Evolution (LTE) troubles as a concern. Norman predicted that North American CDMA operators may move to LTE rather than to WiMax and that Ericsson’s purchase of Nortel’s interests in CDMA and LTE will encourage CDMA operators to shift to LTE, creating greater acceptance of LTE in North America. “In the developed markets of Europe and the United States, we see some early signs of a difficult future for WiMax. In developed European markets, operators are almost certainly upgrading their 3G technologies to 4G LTE in order to match the rising demand for data,” said Norman. “We expect that [the WiMax operators] will compete head-to-head for the same customer base, and LTE will have a clear advantage in this.”

While WiMax players may be looking at broadband stimulus funding as a much-needed and well-timed boost, their solutions may be too wide in scale to mesh with the U.S. government’s localized roll-out strategy. According to guidelines, the U.S. government will not fund more than one project to serve any given geographic area.

This shift in WiMax fortunes may be welcomed by some satellite companies — especially those battling for $7.2 billion in U.S. broadband stimulus funding, but these developments should not be seen as giving the satellite sector an advantage in future market and spectrum battles with terrestrial players. Instead, it should be seen by the WiMax community as a chance to seek more cooperation from the satellite sector and develop hybrid services that will benefit all parties involved.