2008 Australia - Mobile and Wireless Broadband

The fact that the progress in wireless broadband is so painfully slow is creating anxiety in the market. An ongoing information war is being waged around the developments in the wireless broadband market.

Fixed wireless broadband seems to have found its niche in some of the regional markets, often helped by government funding. Mobile broadband is still an uncertain area, especially now that 3G-based data services are improving so quickly. If any serious mass market developments are going to take place for WiMAX we will still have to wait a few more years. It is more likely that WiMAX, both in the fixed wireless and the mobility market, will only be a niche product. This report analyses the pros, cons and potential of this market. For more information, see chapter 2, page 7.

However, it appears that in 2008 there will again be considerably more talk than action. The collapse of the OPEL project in early 2008 is a major setback for WiMAX, and not just in Australia. This will impact on Unwired, which had hoped to ride on the back of an OPEL rollout, and Austar, which would have been able to commercialise its spectrum. It will be interesting to observe what Unwired, Seven and Austar do next.

Allegro, BigAir and Clever are niche market players which are steadily extending their wireless reach in the market. Wireless developments in the utilities market are also interesting. For more information, see chapter 1, page 1.

The market for wireless broadband is too small to enable any meaningful predictions. There are still too many ‘ifs’ and ‘buts’ and these will influence the ultimate direction it will take. Fixed wireless broadband is developing in certain niche markets, such as regional services and business and campus applications, and will perhaps be able to capture around 10% of the total fixed broadband market.

Mobile broadband is a nebulous market – millions of people have the potential to use it but actual usage is still relatively low. However, it is totally driven by price, so a price war could see this market skyrocket in a very short space of time. Eventually, in about five years, what we now call the mobile market will be a wireless market, with perhaps the majority of usage being connected with broadband services rather than voice services. By that time we will be talking about a $15 billion market. For more information, see chapter 3, page 14.

Key highlights

• The fixed wireless broadband market will grow only marginally over 2008, with potentially higher growth expected in 2009. Its potential over the next three to five years might be around one million users.
• In this market the future of WiMAX will rest in the niche markets. If it can be deployed rapidly it could take a 25% share of the fixed broadband market; longer-term however, more like a 10-15% market share.
• Other worthwhile niche markets are corporate and campus networks, where wireless deployment can be done at 20% of the cost of a fixed rollout.
• Over the next five years the mobile market will be transformed into a wireless broadband market, with revenues mainly coming from wireless broadband applications. By then it will be worth $15 billion.
• This market will be dominated by 3G HSPA, followed by LTE, with WiMAX playing only a minor role.
• Unwired has been underperforming and it is unlikely that this will change during 2008. Its future will depend on how well it can (perhaps with the assistance of its new shareholder, The Seven Network) fight for a better share of this market.
• The smaller players have been more successful. They have basically concentrated on niche markets in regional, business and campus networks.
• WiFi continues to be a quiet achiever. Its coverage is still increasing, particularly in a more competitive mobile market, with more need for differentiation and innovation. There is room for WiFi to play an even more important role as this market moves forward.
• If there is any potential for WiMAX it will be in a structurally separated mobile environment where it can add its specific technological benefits to the developers of innovative wireless broadband applications – timeframe 2012-2015.

Data in this report is the latest available at the time of preparation and may not be for the current year.