Once 802.16a gear starts rolling out next year, wireless broadband will quickly pick up steam, according to a new report from ABI.
The research firm said it expects broadband wireless equipment sales to surpass $1.5 billion by 2008, in large part due to the new WiMax standard. The 802.16a standard was approved in January, but the technology has yet to hit the market. However, several companies have recently announced products based on the standard.
Sales of 802.20 gear will also contribute to the total projected revenue, but the majority of it will be WiMax, said Ed Rerisi, ABIs director of research. “The 802.20 equipment will just be coming online then.”
The 802.20 standard, which is still in the very early stages, focuses on mobile broadband, though it encompasses fixed wireless as well. It is seen as a potential competitor to 802.16, especially the upcoming 802.16e amendment for mobile broadband.
In the meantime, WiMax deployments will start in earnest in 2004, with carriers initially targeting areas where there is no DSL or cable modem service. “At least initially, the markets that the operators will likely target will be those that aren’t as price sensitive,” Rerisi said.
“If I’m in the middle of nowhere, and I don’t have access to cable or DSL modems, I’d be more willing to pay a higher price for that service.”
The second part of the initial rollout will target small and medium businesses. With some broadband wireless providers charging roughly half of what a traditional T1 line would cost, businesses may well be willing to spend a premium on the gear to save on the service, Rerisi suggested.
As more equipment comes out and prices start to come down, operators will start to expand into more price-sensitive markets. Rerisi said modem prices would probably need to hit the $200 to $250 price range for mass adoption on the consumer side. Modems are expected to cost $400 to $500 when they start shipping next year.
The residential market will generate the highest number of subscribers, though not necessarily the most revenue, he said. On the other hand, contrary to those who tout WiMax’s potential to provide wireless backhaul for Wi-Fi hotspots, Rerisi doesn’t believe there’s much of a market there.
“Chances are that WiMax won’t be used too much for wireless backhaul. The bandwidth requirements there are pretty high, so it’s not the most cost-effective solution.”