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32 | June 2008 | www.wimax-vision.com/subscribe
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Where will the WiMAX service revenue come from?
The largest single element of WiMAX revenues worldwide
(which includes pre-WiMAX) will be access charges, growing
WiMAX service revenues by type, 2012
to US$17bn out of a total of $24.3bn by 2012, according to
Informa Telecoms & Media. However, the average revenue
per user (ARPU) is likely to fall as WiMAX broadband services
19%
become more mainstream and compete more directly with other
fixed, wireless and mobile broadband systems.
12%
This downward ARPU trend has been clearly established
in both the wired broadband and mobile markets. It has also
been seen with early pre-WiMAX operators, such as Unwired in
Australia, which reported a retail ARPU decline of 4.4 percent
from 2H05 to 2H06.
Revenue from value-added application for both consumer 69%
and business sectors will grow significantly faster to reach some
Access Applications Advertising
19 percent of total revenues by 2012, while advertising will
Source (text and graphic): WiMAX broadband convergence report, Informa Telelcoms & Media
start later but will show the fastest growth of the three revenue
streams to reach 12 percent of the total by the end of the Telecoms & Media for mobile broadband operators are:
forecast period. communication (including VoIP, e-mail and other messaging;
The challenge for all broadband operators, including the entertainment (including music, games, interactive TV/VOD
WiMAX players, is to develop as many value-added services as and radio); information (including Internet search, news and
possible to offset the inevitable decline in access charges as podcasting); and mobile office/mobile workforce solutions
bandwidth becomes more and commoditised. (covering VPN, intranet access, e-mail and scheduling
The value-added revenue streams identified by Informa applications).
operator partners and Sprint. They, in turn, will In Japan, UQ Communications—which video downloads,” says the company spokesper-
then sell bundled packages to their customers. counts KDDI and Intel among its investors— son. “MBS also has a big potential in enterprise
This leaves many customers, says Gude, who also places the open WiMAX philosophy at the use, such as a real-time public notification system
don’t want bundled packages—the so-called heart of its business model. “UQ will not provide for public transport. Wired systems have already
‘cord cutters’—but want Internet access from application service by ourselves,” says a company been used for this but a wireless system is much
a wide range of consumer electronics devices spokesperson. “We will work jointly with our more disaster proof.”
at attractive prices and with no long-term partners, such as contents providers, to create
contracts. This, says Sprint, will significantly attractive services to WiMAX users. Market dif- Lower cost base, more services
expand the mobile data revenue opportunity, ferentiation lies in the high-speed capability of WiMAX supporters, on the assumption of a
aided by the presence of dual-mode devices the WiMAX network; our partners can provide much lower cost structure than cellular net-
that work on 3G/4G or wifi/WiMAX so service the higher quality content.” works, believe they can be successful in some
is maintained within and beyond WiMAX Using Wave-2 Phase-2 WiMAX equipment areas of service provisioning where mobile oper-
coverage areas. from Fujitsu and Samsung, UQ has extra ators have largely failed. One example is mobile
“The ability to have a WiMAX network MIMO capabilities and service options com- TV. Delivered over 3G or dedicated broadcast
that can deliver the lowest cost per megabyte pared with Wave-2 Phase-1 (adopted by Sprint networks, mobile TV has yet to live up to initial
is paramount in driving this business model,” Nextel for its initial WiMAX rollout). These cellular operator expectations: raising ARPU and
says Gude. include MBS (multimedia broadcast service) attracting (and keeping) customers. The main
Another driver for data usage is allowing and real-time video. reason is that prices have been far higher than
the customer to use WiMAX, on an ad hoc UQ Communications’ pre-commercial customers have been willing to pay.
basis, without having an existing contract in service is scheduled to start in Tokyo and Yoko- An In-Stat report published in August 2007,
place with the service provider. “The business hama duing February 2009 using approximately which surveyed US consumers’ interest in
model in the WiMAX domain is changing 600 outdoor base stations. Full commercial mobile video, found that of those expressing an
from the traditional GSM or CDMA model service in the summer will also include Osaka interest in a 3G streamed/downloaded service,
where you have to have a pre-subscription or and Nagoya and take the number of its base 70 percent decided it wasn’t for them when they
an existing relationship with the service pro- stations up to 1,600. By that time, UQ hopes discovered how much it would cost: $15 per
vider,” says Farshid Mohammadi, VP of prod- to establish a number of deals with spcialised month, which was the price of Verizon’s VCAST
uct line management at Bridgewater Systems, MVNOs who can provide unique devices and/ service at the time.
a company that provides AAA functionality, or services. Yet Jon Hambidge, CMO of NextWave Wire-
subscriber management and real-time policy Of all the WiMAX applications currently being less, believes that WiMAX operators can use
control for wireless networks. “This model considered, UQ believes the most promising in TV to greatly enhance their business case. This
has already been established with wifi, where terms of generating higher margins will revolve view should not be too surprising as NextWave
getting devices authenticated on the network around video, given the high-speed capability and launched its MXtv platform earlier this year,
in an automated fashion has become an im- capacity of the network. “Video will not be limited which is capable of delivering multicast and uni-
portant part of the business case.” to HDTV, but include online gaming and music cast streams over mobile WiMAX networks.
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