WiMAX Gets Down to Business : Chasing the Consumer Is Not the Only — or the Safest

WiMAX has been a player in the business market for some time now, but never really enjoyed the high-profile hype-machine treatment that the idea of 4G for the consumer has gotten. WiMAX carriers Sprint-Nextel Corp. and Clearwire Corp. have led the way in terms of fomenting the dialogue around the technology, and the main point goes something like this: consumer services, consumer electronics and content’s long tail will redefine communications as we know it. Right? Well, no one really knows, though it sounds good on paper. The proven model is actually one that doesn’t get much coverage: WiMAX for businesses.

Consider this statement, which is a rarity in today’s environment: “We are growing rapidly, with very low churn and a lot of happy customers,” said Jeff Thompson, president and CEO at Towerstream Corp., which provides three flavors of WiMAX to the upper end of the small-medium business market. “We predicted 15 percent sequential growth guidance for the last quarter, and came in at 20 percent, with record low churn. There is immense opportunity here.”

It’s also a model that is in the middle of an evolution, as 802.16e WiMAX is deployed, offering the possibility of mobile or portable business applications.

The Basic Case for the Business Market

And where, exactly, is that opportunity right now? It sounds simple on the surface: it starts with wireline replacement.

New data from TeleGeography’s WiMAX Research Service reveals that WiMAX deployments are gaining momentum around the globe. The number of commercial WiMAX networks grew 82 percent between the third quarter of 2007 and the third quarter of 2008, from 69 to 126. This growth has been distributed around the world: the number of commercial WiMAX networks increased by 100 percent or more in Latin America, Asia, the Middle East and Africa. Growth was slowest in Central and Eastern Europe, where the pace of new network launches slowed to 38 percent. However, this slowdown should prove to be short-lived: while 18 operators now provide WiMAX service in the region, 22 companies are building WiMAX networks, and another 10 have commenced field trials.

ABI Research analyst Phil Solis said WiMAX primarily is being used as a replacement for fixed Internet access at the moment, whether that be copper or fiber. “The primary benefits are the speed at which service can be installed — a day instead of 30 to 90 days — and competitive pricing,” he explained. “This can be used as a primary connection, but in many cases serves as a great backup connection in the event of fiber cuts or other disruptions to service.”

Thompson said being cheaper than the LEC is a must in order to compete (Towerstream comes in at about half the wired cost, Thompson said), and that wireless is obviously a fit for areas out of reach for high-end copper or fiber. But an additional driver for Towerstream’s growth is the rise of enhanced applications in the SMB market.

“Let me just say, video, video, video, and that’s across the board,” he noted. “Any Web site you visit is pushing video out to you, it seems. Companies are flying less and having more video meetings. Online video is a large part of presentations now. Plenty of media companies are pushing rich media back and forth. And a T1 just isn’t sufficient anymore for a lot of these businesses — video is making that antiquated.”

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WiMAX Gets Down to Business

Chasing the Consumer Is Not the Only — or the Safest — Play

The Basic Case for the Business Market