This report provides high-level overviews and strategic analyses of the developments in wireless broadband. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions. The subjects covered in the report include:-
The Market in 2007
Infrastructure Overview and Developments
Spectrum and regulatory issues
Overview of the key wireless broadband projects and case studies
The fixed wireless market
The WiFi Hotspot market including key players
WiMAX moving into broadband mobility
High-speed satellite services
There has been some good progress in wireless broadband in regional Australia. The developments in South Australia, in particular, are very promising - these have been made possible by the financial assistance of Federal and State Governments.
The subsidies from HiBIS, and now Broadband Guarantee, are enabling broadband providers to deliver high-speed broadband services to areas where it would not normally be economically viable. At the same time, some of the smaller players in these regional areas have failed because they were not able to build sustainable business plans. However, with the infrastructure in place, it has generally been possible to ‘salvage’ the services. While there has been a certain amount of disruption, in most cases alternative solutions have been put in place, making possible a continuation of services over the subsidised infrastructure.
Outside regional areas, progress has been slow. PBA (Commander) has stuck to its niche market approach and is selectively using wireless broadband in some of its business deployments. Unwired now has around 80,000 customers, but, although this is a significant figure, it is only a small percentage of the four million broadband users in Australia. The same applies to the Austar service in Wagga Wagga.
As we have indicated in previous reports, future development in wireless broadband will be more linked to personal wireless services. Similar to developments in the fixed network, the mobile networks, also, will see transformation from voice to data services. However, the market dynamics are such that it remains more lucrative for the mobile operators to maintain their high call charges, rather than start looking at more affordable mobile data/wireless broadband services.
Despite some good developments from Telstra’s NEXT G, and also from Hutchison, the interesting services that are being offered over these networks are, in general, too expensive to be taken up by many customers. As has been the case in this market segment for the last ten years, services are mainly aimed at the business markets and the top end of the consumer market. Market demand is definitely there, but not at the current prices.
The success of the Hutchison cricket service, offering a flat $5 rate for access to all services related to the ‘A’ series of matches, proves that people are interested if the commercial conditions are right.
These and other scenarios and developments are further discussed in the report.
Mobile data, Mobile voice and Wireless revenue forecasts
Year Mobile Data
(excl SMS) Mobile Voice
(incl SMS) Wireless Mobile
2007 $500 million $12 billion $20 million
2012 $500 million $6 billion $7 billion
2017 Merged with wireless $1.5 billion (= mobile VoIP) $14 billion
There is increasing doubt about the business case for WiMAX - whether it will stand up against alternative offerings from fixed and other mobile systems.
The future of the WiMAX technology, however, may lie more in the area of mobility and Wireless Personal Area Networks (WPANs), but in that case it will be in competition with HSDPA and other mobile technologies.
It is most unlikely that companies will launch national WiMAX networks in competition with the current fixed and mobile operators. Few will dare to take on these dominant players.
By 2015 all mobile networks will have been converted to wireless broadband networks, offering the services we have talked about for a decade - but by then at a low cost. Business models will be based mainly on advertising, and partially on subscription models.
There are around 30 companies in Australia that provide hybrid satellite-based Internet access. This is largely due to (HiBIS), a Federal Government broadband subsidy scheme, which was replaced in 2007 by a new Broadband Guarantee scheme.
By 2007 there were some 150,000 (commercial) wireless broadband users - a far cry from the numbers predicted by some analysts earlier in the decade. This constitutes less than 5% of the total broadband market.
There are over 3,500 hot spots installed around the country. The market remains confused about what wireless broadband actually is - WiMAX, WiFi Mesh, LMDS, GPRS/EVDO, 3G, HSDP, Blackberry, etc. We stand by our view that it also needs to be linked to affordability.
According to many observers, spectrum for wireless broadband remains a key issue; however ACMA welcomes discussion on this subject with any serious potential player.
This report provides high-level overviews and strategic analyses of the developments in wireless broadband. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions.
Further information provided includes:
Analysis of the wireless broadband market in relation to developments in mobile data and fixed broadband.
Subscriber statistics and a 5 and 10 revenue forecast.
The business models that need to be deployed in order to develop this market beyond the current mobile data activities.
Statistical comparisons on the WiFi and hotspot market.