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WiMAX can compete against fixed broadband, notes study

Posted: 10 Jun 2008 ?? ?Print Version ?Bookmark and Share

Keywords:WiMAX? fixed broadband? wireless? DSL?

In-Stat said in its new report that WiMAX can compete against fixed networking services, specifically fixed broadband.

Usually, WiMAX service scenarios are thought to fit in one of two models. The first has WiMAX as a fixed service in areas that lack wired infrastructure, such as DSL. The other scenario talks about WiMAX as a purely mobile service with connectivity in cellphones and laptops. There has been little to no consideration of WiMAX competing head-to-head against fixed broadband. This has been a major oversight, said InStat in the report "Waiting for WiMAX: U.S. Consumers want more from wireless broadband."

In the report, over 1,000 U.S. consumers were asked if they are willing to switch from their current home broadband Internet provider to a new one that can also offer them wireless Internet access throughout the home metro area and when away from home across one-third of all U.S. cities. The survey respondents were also told that the new service offered at the same price, would range from 2Mbit/s to 4Mbit/s downstream and 1Mbit/s upstream.

According to InStat, over half of all respondents indicated some level of willingness to switch. Clearwire's financial results also show this inclination to switch. Based on a Clearwire survey conducted in Q4 07, 38 percent of their subscribers had cable modem and 28 percent had DSL type of Internet access prior to Clearwire.

In-Stat sees two ways that WiMAX will compete with fixed broadband. One way of competing has WiMAX replacing the fixed connection. This has been the strategy of Clearwire and In-Stat expects it will remain part of the strategy after its joint venture with Sprint and others is finalized. Another way for WiMAX to compete comes from existing wired broadband providers adding it to their service mix.

A fixed broadband operator could offer WiMAX to provide an away-from-home connection for their subscribers. Over 40 percent of survey respondents said they would be willing to pay an extra $10 to $15 per month to their current broadband provider for this feature. In-Stat believes this is one of the reasons Comcast, Time Warner Cable and Bright House Networks are partners in the new Clearwire joint venture. A WiMAX network would allow them to add this to their service mix, extending their in-home service outside the home. As broadband growth in the U.S. slows down, enhancing service options will help them in competing against other broadband providers. In-Stat believes for a segment of the population, the ability to connect "where you are" is an attractive proposition, and one that will get them to churn from existing broadband providers.

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