WiMAX and Broadband Wireless (Sub-11Ghz) Worldwide Market Analysis and Trends 2005-2010, 3rd Edition

SUMMARY

Fixed Market Trends

The fixed/portable broadband wireless equipment market (sub-11GHz) has grown from a $430 million market to $562 million a 30% increase. Maravedis predicts the fixed Broadband wireless market to pass the $ 2 billion mark by 2010.

For the first time in its history, vendors including Airspan and Alvarion have made yet modest but positive cash flows. Further broadband wireless has evolved from an obscure acronym to the next big thing thanks to Intels marketing machine and the formidable progress made by the WiMAX forum, growing membership to the extent that WiMAX is now synonymous with broadband wireless.

Maravedis has been following the industry long enough not to fall into the trap of using WiMAX as representing the whole story. WiMAX is an important, highly visible part of the evolving fixed/portable field but not all of it! Other technologies including DOCSISbase, TD-CDMA and 802.20 merit to be analyzed as well.

The fundamentals for continued growth remain sound. Broadband is becoming a necessity for many residential and business subscribers worldwide. There were close to 130 million broadband subscribers worldwide at the end of 2004, a 30% growth from 2003.

Although DSL and Cable are poised to remain the dominant technologies for access in urban and developed areas, pre-standard wireless access technologies are already becoming reliable and cost effective complements or alternatives to providing voice and data services.

Some Key Findings include:

• Some 785,000 broadband CPEs and over 40,000 base station sectors were shipped in 2004;
• Alvarion remains the market leader with 26% market share followed by Motorola Canopy and IP Wireless;
• EMEA which represented 32% of the overall 2004 equipment sales continues to represent the largest market opportunity but Asia will outpace it by 2007;
• The carriers market segment with 68% of all sales represented the largest segment followed by Wireless ISPs and Public entities;
• The access and backhaul applications represented respectively 81% and 19% of total sales in 2004. However backhaul will represent 27% of equipment sales by 2010;
• 3.5GHz, the most allocated frequency band for BWA, represents the largest opportunity for BWA with over 40% of total sales followed by the 5.2-5.8Ghz band. We believe those bands will continue to dominate equipment sales especially in light of the fact that they are two of the initial WiMAX profiles. The 2.3 and 2.5-2.7Ghz market share will grow as Korean (WiBro) and US operators start deploying WiMAX equipment some time in 2006-2007
• The shipments of proprietary Fixed Indoor/Portable equipment already accounted for 21% of 2004 sales
• Shipments of OFDM based product already represents 18% of all shipments and that proportion will grow with the adoption of 802.16-2004 to close to 60% by 2008

Service Provider Trends

Maravedis estimates that close to 1 million subscribers worldwide had some form of fixed broadband (+256Kbps bi-directional) wireless access. Maravedis estimates total service revenues in 2004 to be US$1.4 billion.

In developing countries, representing most of the worldwide population, the potential for BWA/WiMAX growth is most pronounced. In rural areas, governments at all levels are driving the growth of broadband wireless through continuing frequency allocation and subsidies to make the rural business case more attractive in order to reduce the digital divide. Our research indicates that a tipping point that will drive increased unit demand is likely to occur due to effects of standardization: commoditized IC/SoCs will help drive the price equation, stimulate increased awareness and market driven demand, and provide increased supply stability and compatibility across similar equipment profiles

This year, operators will explore the challenge of growing broadband ARPU. There will not be a single solution: faster speeds and VoIP will work for some; content and IPTV services for others. There will be a growth in commercial bundles driven by telcos responses to cable operators triple play services. We expect VoIP services to continue to show strong growth and continuing acceleration in subscriber base in both the consumer and enterprise segments.

Maravedis surveyed operators to understand their greatest expectations vis a vis upcoming WiMAX equipment. The results of the survey are presented in the report. In essence, the number one expectation for service providers is lower CPE equipment cost, ideally in the sub $300 range. This is not a surprise when considering the impact of CPE subsidies in the total business case. The second highest priority expressed is for base stations to deliver "more throughput", a response that came ahead of benefits such as "Interoperability", "ease of installation" or "coverage". Responses changed noticeably depending on service class: business or residential customers.

We also looked at BWA operators strategy towards mobility. The majority of service providers are excited about the prospects of mobility but concerns about regulation and network complexity alter the excitement.

Whether it is 3 G or 802.16 e,/WiBro the success of mobile broadband will be driven by the development of user friendly applications and handsets. In this section, Maravedis provides an overview of what are the applications driving the mobile broadband market including mobile gaming, multimedia messaging, gambling and other applications such as ring tones. The mobile consumer market represents the lions share of mobile data services revenue due to gaming.

TABLE OF CONTENTS

METHODOLOGY & ASSUMPTIONS

SCOPE OF THE STUDY

EXECUTIVE SUMMARY

1. THE BROADBAND WIRELESS CHASM

1.1 2004 2005 WIRELESS TRENDS

1.2 MARKET DRIVERS.

1.2.1 Residential Applications

1.2.2 Business Applications

1.2.3 Government and Public Entities

1.2.4 The Broadband Explosion

1.2.5 Portability

1.2.6 Mobile Applications

1.2.7 Backhaul for Mobile and WiFi Networks

1.2.8 VoIP

1.3 CURRENT BWA MARKETS GENERAL ANALYSIS 1999-2004

1.3.1 BWA Subscribers 1999-2004

1.3.2 BWA Services Revenues in 2004

1.3.3 Equipment Market Sizes 1999-2004

1.3.4 Solution Vendors Analysis

1.3.5 Regional Trends:

- Western Europe Highlights

- Eastern Europe Highlights

- Africa Highlights

- Asia Highlights:

- Caribbean and Latin America (CALA) Highlights

- North America Highlights

2. BWA/ WIMAX SPECTRUM & LICENSING ANALYSIS BY COUNTRY

2.1 SUMMARY OF TECHNICAL REGULATION FOR BWA SPECTRUM

2.1.1 Exact BWA/WIMAX Frequency Bands

2.1.2 Future Spectrum for BWA/WiMAX

2.1.3 Channelisation:

2.1.4 Block Sizes

2.1.5 FDD and TDD Status

2.1.6 Spectrum availability for WiMAX Mobility:

2.2 COUNTRY SPECTRUM, LICENSING AND REGULATION.

2.2.1 NORTH AMERICA

USA

Canada

2.2.2 EUROPE

Austria

Belgium

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Luxembourg

Malta

Netherlands

Norway

Poland

Portugal

Romania

Russia

Slovakia

Slovenia

Spain

Sweden

United Kingdom

2.2.3 ASIA/ PACIFIC

China

India

South Korea and WiBro

Malaysia

Thailand

Taiwan

Australia

New Zealand

2.2.4 CARIBBEAN AND LATIN AMERICA

Argentina

Brazil

Chile

Colombia

Mexico

Peru

Uruguay

Venezuela

2.2.5 AFRICA

Nigeria

3 SERVICE PROVIDERS

3.1 SERVICE PROVIDERS EXPECTATIONS VIA A VIS WIMAX.

3.2 CASE STUDIES.

3.2.1 CLEARWIRE

3.2.2 TOWER STREAM (USA)

3.2.3 CITY OF PHILADELPHIA (USA)

3.2.4 LIBERA PLC (UK)

3.2.5 WIVANET (FINLAND)

3.2.6 UNWIRED AUSTRALIA

3.2.7 SPRINT/NEXTEL (USA)

3.2.8 ENERTEL (NETHERLANDS)

3.2.9 HANARO TELECOM- WIBRO SERVICE

4. WBB STANDARDS AND CONVERGENCE

4.1 PRE STANDARDS (WIMAX) ENVIRONMENT

"NON LINE OF SIGHT" OR NEAR "LINE OF SIGHT"?

4.2 WHAT IS THE RATIONALE FOR WIMAX?

4.3 CURRENT "PRE-WIMAX" DEPLOYMENTS WORLDWIDE.

4.4 WIMAX MEMBERS

4.5 WORKING GROUPS.

4.6 PROMISES OF WIMAX SYSTEMS

4.6.1 Interoperability

4.6.2 Performance & Coverage

4.6.3 Cost Reduction

4.6.4 Quality of Service

4.6.5 Security

4.6.6 Other Features: Mesh Networks

4.6.7 MIMO-AAS: Smart Antennas

4.7 RISKS AND WEAKNESSES

4.8 WIMAX ROADMAP

4.9 CONFORMANCE TESTING

4.10 INTEROPERABILITY

4.11 IS WIMAX LATE?.

PHY Layer

MAC Layer

4.12 THE RF CHALLENGE

5 THE DRIVING NEED FOR MOBILITY

5.1 WIMAX DEFINITIONS

5.1.1 Portability

5.1.2 Nomadicity

5.1.3 Mobility

5.2 THE 802.16 VERSION E

5.3 SOUTH KOREA AND WIBRO.

5.4 CHALLENGES

5.4.1 Spectrum Availability

5.4.2 Hand-Offs

5.4.3 Roaming

5.4.4 A Global Political Battle

5.5 COMPETING TECHNOLOGIES

5.5.1 802

5.5.2 3G/UMTS/H-USDPA

5.5.3 UMTS TDD: TD-SCDMA

5.5.4 Conclusions

5.6 ASIAN INITIATIVES.

6. THE POINT TO POINT MICROWAVE MARKET TRENDS

6.1 OVERVIEW

6.2 DEFINITION

6.3 MARKET DRIVERS FOR PTP MICROWAVE

6.3.1 Throughput

6.3.2 Price

6.3.3 Ease of Installation

6.3.4 Competitive Liabilities

6.4 MARKET EVOLUTION AND SEGMENTATION

6.4.1 Regional Markets for PTP Microwave

6.4.2 Analysis of the Major Market Segments and Applications

6.5 BACKHAUL MARKETS.

6.5.1 Mobile Backhaul

6.5.2 PTP Backhaul Equipment

6.5.3 ROI for PTP Backhaul

6.5.4 PTP vs PMP WiMAX Backhaul

6.5.5 Backhaul for Fixed Broadband Wireless Networks

6.6 LONG HAUL TRUNKING

6.7 PTP MICROWAVE IN THE ENTERPRISE

6.8 LAST MILE ACCESS.

6.9 PTP MARKET FORECASTS.

7. MARKET FORECASTS 2005-2010

LIST OF EXHIBITS

• Exhibit 1: The BWA Chasm
• Exhibit 2: Residential End-users Applications driving bandwidth demand
• Exhibit 3: US Household Broadband Penetration
• Exhibit 4: US Households Penetration Rates
• Exhibit 5: Business End-users Applications driving bandwidth demand
• Exhibit 6: Number of Small and Medium Business by Region 2003-2008
• Exhibit 7: DSL Subscriber by Region in 2004
• Exhibit 8 DSL Subscribers in the Top 20 countries I 2004
• Exhibit 9: Worldwide Cable Modem Subscribers in 2004
• Exhibit 10: Accumulated Broadband Subscribers Forecast by Technology
• Exhibit 11: High Speed Internet Packages
• Exhibit 12: Mobile Applications of US subscribers January 2005
• Exhibit 13: Worldwide PDA Shipments
• Exhibit 14: Mobile Gambling Revenues by Region
• Exhibit 15: Mobile Data in Western Europe
• Exhibit 16: 802.11 Market Figures
• Exhibit 17: Top 10 WiFi Countries
• Exhibit 18: Public Hotposts and users Forecasts ? See appendix
• Exhibit 19: BWA subscribers by country-
• Exhibit 20: BWA Service Revenues by Country
• Exhibit 21: BWA CPE Shipments in units 1999-2004
• Exhibit 22: Historical BWA Base Station in units 1999-2004
• Exhibit 23: CPE Average Selling Price Evolution 1999-2004
• Exhibit 24: Base Station Average Selling Price Evolution 1999-2004
• Exhibit 25: CPE Market Sizes in ($) for<11Ghz in 1999-2004
• Exhibit 26: BWA BS Market Sizes in ($) for<11Ghz in 1999-2004
• Exhibit 27: BWA Total Market Sizes in ($) for<11Ghz in 1999-2004
• Exhibit 28: 2004 Market Breakdown by Frequency
• Exhibit 29: 2004 Market Breakdown by Region
• Exhibit 30: 2004 Market Breakdown by Market Segment
• Exhibit 31: 2004 Market Breakdown by Application:
• Exhibit 32: 2004 Market Breakdown by CPE Type Solution
• Exhibit 33: BWA Players Cash position
• Exhibit 34: BWA Market Share per Vendor for all frequencies <11Ghz in 2004
• Exhibit 35: BWA Market Share per Vendor for all frequencies <11Ghz in 2004 when including narrowband products
• Exhibit 36: BWA Market Share per Vendor By region <11Ghz in 2004 -
• Exhibit 37: WiMAX Product Release By Vendor
• Exhibit 38: OEM/Vendors Strategic Relationships Table
• Exhibit 39: Positions of Selected Indian Telecom Operators
• Exhibit 40: High Speed Internet Lines in the USA
• Exhibit 41: Summary of Frequencies available for BWA in the Sub 11Ghz bands-
• Exhibit 42: 450MHz Frequency Allocaiton By Country
• Exhibit 43: FDD and TDD Regulation
• Exhibit 44: Mobility regulation at 3.5GHz.
• Exhibit 45: MMDS/ITFS Spectrum
• Exhibit 46: Chinsese 3.5GHz License holders
• Exhibit 47: 2.4Ghz Situation in Africa
• Exhibit 48: 5 GHz Situation in Africa
• Exhibit 49: Service Providers Survey Raw Data
• Exhibit 50: Service Providers Survey Results
• Exhibit 51: Pre-WiMAX Trials:
• Exhibit 52: 802.16-2004 Interoperability Map as of March 2005.
• Exhibit 52: CPE Price Evolution 1999-2004
• Exhibit 53: CPE Price Forecasts 2005-2010
• Exhibit 54: IEEE 802.16 specifications by sub-standard.
• Exhibit 55: 802.16-Rev D PHY features
• Exhibit 56 : Vendors current position vis a vis 802.16 e and 802.20
• Exhibit 57 : Exhibit: Mapping of Wireless BB Evolution
• Exhibit 58: Exhibit: Suitabilitty- Wireless Enchancement Technology
• Exhibit 59: PTP Microwave Sales by Frequency (in Units)
• Exhibit 60: PTP Microwave Sales by Region (in Units)
• Exhibit 61: PTP Microwave Sales by Applications (in Units)
• Exhibit 62: PTP Microwave Sales by Region (in Million $)
• Exhibit 63: PTP Microwave Market Forecasts by Frequency (in Units)
• Exhibit 64: PTP Microwave Market Forecasts by Region (in Units)
• Exhibit 65: PTP Microwave Market Forecasts by Application (in Units)
• Exhibit 66: PTP Microwave Market Forecasts by Region (in Million $)
• Exhibit 67: Fixed/Portable CPE Market Forecasts 2005-2010 (Units)
• Exhibit 68: Fixed/Portable CPE Market Forecasts 2005-2010 (Units)
• Exhibit 69: Base Station Market Forecasts 2005-2010 (Units)
• Exhibit 70: CPE Price Decline Forecasts 2005-2010
• Exhibit 71: Base Station Price Decline Forecasts 2005-2010
• Exhibit 72: CPE Market Size Forecast 2005-2010 (in $)
• Exhibit 73: BS Market Size Forecast 2005-2010 (in $)
• Exhibit 74: Market Forecast Comparison 2005-2010
• Exhibit 75: The WiMAX Market Penetration in $ 2005-2010
• Exhibit 76: BWA Market Size Forecasts by Frequency 2005-2010
• Exhibit 77: BWA Market Size Forecasts by Region 2005-2010 in $
• Exhibit 78: BWA Market Forecasts by Application 2005-2010 (in $)
• Exhibit 79: BWA Market Forecasts by CPE Type 2005-2010 (in units)
• Exhibit 80: BWA Market Forecasts by CPE Type 2005-2010 (in $)
• Exhibit 81: Average BOM by Standard: 3G and WiMAX
• Exhibit 82: 802.16-2004 Chipset Forecasts 2005-2010 (In Units).
• Exhibit 83: 802.16-2004 Chipset Market Forecasts 2004-2008 (in $)
• Exhibit 84 Mobile Addressable Market Forecasts (Millions users)
• Exhibit 85: 802.16 e Market Prenetration Forecast 2005-2010.
• Exhibit 86: 802.16 e Chipset Revenue Forecasts 2005-2010
• Exhibit 87 DSL & Cable Penetration by Country
• Exhibit 88: Internet Usage by Region
• Exhibit 89: Top 15 Countries PC in-use
• Exhibit 90: Top 15 Countries in Internet Usage
• Exhibit 91: Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2004 (Thousands of Units)
• Exhibit 92: Preliminary Worldwide PDA Vendor Unit Shipment Estimates for 2004
• Exhibit 93: 3G Handset Shipment Forecasts

APPENDICES

BWA/WIMAX SYSTEM VENDORS

• 1. ADAPTIX.
• 2. AIRSPAN NETWORKS
• 3. ALVARION LTD.
• 4. APERTO
• 5. ADAPTIX.
• 6 ARRAYCOMM INC
• 7. ARRIS
• 8. AXXCELERA (FORMER ADAPTIVE BROADBAND)
• 9. CAMBRIDGE BROADBAND
• 10. FLARION
• 11. INFINET WIRELESS
• 12. IP WIRELESS.
• 13. L3 COMMUNICATIONS (IOSPAN)
• 14.NAVINI NETWORKS
• 15. NEXTNET WIRELESS
• 16. NEXT-G SYSTEMS.
• 17. POSDATA
• 18. PROXIM CORPORATION.
• 19. REDLINE COMMUNICATIONS
• 20. SOLECTEK.
• 21. SOMA NETWORKS.
• 22. SR TELECOM.
• 23. TRANGO BROADBAND
• 24. VCOM INC
• 25. VYYO.
• 26. WAVERIDER.
• 27. WI-LAN.

SELECTED INFRASTRUCTURE SUPPLIERS

• 28. ALCATEL MOBILE GROUP.
• 29. MARCONI.
• 30. MOTOROLA CANOPY
• 31. NORTEL NETWORKS/LG.
• 32. SAMSUNG
• 33.SIEMENS MOBILE GROUP
• 34. ZTE-ZIMAX.

CHIPSET VENDOR PROFILES

• 35. BECEEM.
• 36. CYGNUS MULTIMEDIA COMMUNICATIONS INC.
• 37. FUJITSU MICROELECTRONICS AMERICA (FMA).
• 38. INTEL CORPORATION
• 39. PICOCHIP
• 40. RUNCOM
• 41. SEQUANS
• 42. SI-WAVE
• 43. TELECIS WIRELESS
• 44. WAVESAT WIRELESS INC

REVIEW OF RF TECHNOLOGIES

• Single Carrier Modulation
• Code Division Multiple Access (CDMA)
• Orthogonal Frequency Division Multiplexing (OFDM)
• Orthogonal Frequency Division Multiplexing Access (OFDMA)