Research firm Analysys Mason doubts 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, according to a report released Aug. 20.
    Terry Norman, senior analyst at Anlaysys 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 with a national WiMax network through Clearwire this year. “This does not look good for WiMax,” according to Analysys Mason.
    The report also predicts 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.”
    In compiling its data, Norman said that Analysys Mason’s research division carried out an extensive series of interviews with the leading mobile network operators in Europe and said that none of the operators interviewed hinted that they might adopt WiMax now that LTE is imminent. They see WiMax as a technology to be deployed in an ad hoc fashion in developing countries.
   The statement may be welcomed by some satellite companies — especially those battling for $7.2 billion in U.S. broadband stimulus funding outlined in the American Recovery and Reinvestment Act, where WiMax competitors are taking aim at potential broadband connection and smart grid technology contracts.
    One of those competitors is Space Data, a U.S.-based spectrum holder in the NPCS band. In June, the company offered its 930 MHz licensed spectrum for smart grid communications in combination with Full Spectrum’s FullMax broadband wireless system.
    The first window for funding proposals, which is being administered by the U.S. Department of Agriculture’s Rural Utilities Service (RUS) and the U.S. National Telecommunications and Information Administration (NTIA), closed Aug 14.
   Some satellite companies have made WiMax investments in North America as well. During the 2008 fourth quarter, the U.S. Federal Communications Commission granted a petition by Globalstar to use the WiMax protocol as an ancillary terrestrial component to its mobile satellite services network.
    Despite the grim news for North American and European WiMax markets, Analysys Mason believes that WiMax will continue to play a role in developing countries “because of the limited potential of the [developing] markets, there will be some consolidation of vendors and providers along the way," said Norman.