Australian WiMax potential is ‘limited’, analysts find

Australia will represent only two percent of the Asia Pacific region’s WiMax subscriber base by 2013, analysts say.

According to a newly-released report by Frost & Sullivan, the Asia Pacific market for WiMax is expected to generate US$11 billion in revenue and reach 43 million subscribers by the end of 2013.

Describing WiMax as the “ideal technology for emerging markets”, Frost & Sullivan Senior Industry Analyst Marc Einstein said WiMax could provide voice and data connectivity at speeds of up to 1 Mbps to under-served rural areas that will never realistically receive fixed-line services.

Asia’s household broadband penetration was found to be 3.4 percent at the end of 2007, translating to a potential market of nearly 3.7 billion people in the region who have yet to adopt broadband access services.

In Australia, however, Einstein said the potential for WiMax is limited, as household broadband penetration is estimated to have reached 77 percent, and major operators have yet to embrace WiMax technology.

“Niche operators might find some opportunity in the market once mobile WiMax technology is deployed as the price per megabit of access is still high in the market compared to other countries in the region,” Einstein told iTnews.

“But Australia's largest WiMAX player Unwired was only able to garner 71,000 subscribers after several years in the marketplace,” he pointed out.

The recent cancellation of a billion dollar government subsidy for the OPEL consortium’s regional broadband network was blamed for damaging the prospects of WiMax in Australia.

And while telecommunications incumbent Telstra has chosen to neglect WiMax to focus on 3G technologies, Einstein expects WiMax and 3G to be able to coexist in a market, and even within an operator.

“We still believe that WiMAX can emerge as a more cost-effective method of deploying WiMAX in rural and suburban areas than 3G,” Einstein told iTnews.

“The cancellation of the OPEL deal was a negative move for the development of broadband in the country, as the technology could have provided connectivity to rural areas while at the same time forcing the incumbent telcos like Telstra and Optus to offer faster speeds,” he said.