Cellular operators recently have been trialing WiMAX. Sprint has announced a partnership with Motorola to conduct wireless broadband trials in 2005 and 2006 for future interactive multimedia services. O2 recently concluded a 4-month WiMAX trial in Ireland, delivering broadband services to households and small businesses over a broad area.

Are the WiMAX engagements of Sprint and O2 just a flash-in-the-pan, or are they harbingers of a new industry trend?

Alan Varghese, principal analyst of semiconductor research at ABI Research, believes the latter. "It may be true that the first step was easier for Sprint because they have plentiful 2.5-GHz spectrum," he says, "and for O2, WiMAX was a natural extension of the WLAN hotspots they have deployed across Ireland. But every cellular operator is going to have to consider WiMAX in their strategic planning."

Varghese cites five reasons:

  • cellular network congestion due to high-speed data
  • multimedia take-rates
  • spectral efficiencies and cost per bit of transmission
  • operator frequency spectrum strategy
  • the vision of delivering personal broadband.

This will have a disruptive effect on the product strategies of the entire ecosystem, starting with infrastructure manufacturers, CPE and handset OEMs, all the way to semiconductor vendors.

Considering that WiMAX requires considerable sums to be invested in networks and infrastructure before the system can even be turned on, can the operators make money? ABI Research believes there are three ways they can do so without cannibalizing their existing businesses: Two of them involve raising revenue; the third has to do with reducing costs.