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« Clearwire Launches in Eugene, Oregon | Main | TowerStream Expands »

June 30, 2005

WiMax Needs Sweet Spot

By Nancy Gohring

An Ovum analyst has an interesting look at the business case for WiMax: He suggests that a market needs fairly high density and little competition for WiMax to successfully serve as a DSL replacement. Other factors can make WiMax a potential competitor to DSL, but basically going head-to-head with DSL in many situations won’t work.

It seems to me that many broadband wireless operators must already believe this. In the U.S., some of the more well-known operators such as NextWeb and Towerstream are targeting business customers, which is a market with room for differentiation on price and services. Clearwire is targeting smaller markets without tons of competition.

One of his findings is surprising to me. He says that looking at Unwired in Australia and Clearwire in the U.S., operators are finding that customers aren’t willing to pay a premium for the luxury of portability. This surprises me, if only because personally I would. Also, it seemed that some historical wireless success stories, like Nextel’s Flarion network and Ricochet, were due to the fact that users loved the portability factor.

UPDATE: The Yankee Group’s Lindsay Schroth wrote to say that she too thinks that users will pay a premium for portability. The folks at Unwired Australia have told her that portability is an important element of their strategy and they credit it for some of their recent success.

Posted by nancyg at June 30, 2005 9:25 AM

Categories: competitive landscape

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