Fixed WiMAX expected to weather “Buy American” bill and gloomy analyst predictions

It may not be all doom and gloom for Canada's fixed WiMAX vendors, despite Nortel's decision to wind-down its mobile WiMAX business, grim predictions from analysts and concerns about "Buy American" legislation. At least three Canadian vendors continue to be optimistic. Nortel Network's decision to shutter its mobile WiMAX business and end its joint venture with Dallas, TX-headquartered Alvarion Ltd. came as no surprise. WiMAXCounts Quarterly Report from Maravedis, a Montreal-based telecom tracking firm, has raised the alarm on mobile WiMAX, claiming that deployments will be hit by the economic downturn as subscription rates and service revenues lose pace, and that WiMAX operators are more vulnerable to the credit crunch than their 3G competitors. Adlane Fellah, CEO and Founder of Maravedis, claimed in a recent statement that these are very difficult times for mobile WiMAX as funding dries up and the technology loses the PR battle to LTE. The outlook for fixed wireless, however, looks far more promising. "Mobile WiMAX will get eaten by LTE (Long Term Evolution), but fixed has a lot of legs," says Robert Forget, director of wireless product management for Vecima Networks Inc. in Victoria BC. Vecima, which has three main businesses - OEM, cable equipment, and wireless - has seen significant new market growth in the United States with the opening of 3.65 spectrum. In November the company announced the launch of its Federal Communications Commission (FCC) certified 3.65 GHz VistaMAX base and subscriber stations. Next up is USDA Rural Development acceptance and "Buy American" status from the USDA Rural Utilities Service. "As it stands, buying American means that the equipment has to come from Canada, the US, Mexico, or Israel," says Forget, adding that he doesn't think that US-based protectionism will shut out Canadian companies from the US market. Meanwhile, Tranzeo Wireless Technologies Inc., with headquarters in Pitt Meadows, BC, is seeing growth in emerging markets. At the end of January Tranzeo announced that it was moving forward with the first phase of a joint development agreement with partner PT. Teknologi Riset Global (TRG), a subsidiary of the Indonesian Tower Group, to produce WiMAX subscriber units for the Indonesian market. "We are competing against base station vendors that have developed their own CPEs ," says Dave Gelvin, president of Tranzeo USA. "We have built our WiMAX business on CPEs with high volume radio components, and have announced relationships with multiple base station partners like Vecima and Redline Communications." Gelvin notes that the WiMAX rollout in Indonesia is well-funded from the Tower Group, and that the market potential is immense. "Indonesia has 234 million people," he says, adding that Internet and phone penetration is low. "We expect rapid growth for Internet and telephony." Alan Solheim, VP product management for Ottawa-headquartered DragonWave Inc., which designs and manufactures microwave equipment - and which recently announced a deal for WiMAX, 3.5G, Evolution Data Only (EVDO) and Long-Term Evolution (LTE) services in Nigeria - thinks WiMAX still has a future. "WiMAX is not dead, either internationally or in North America," he says. "In the Middle East, Africa, and to a lesser extent South America, all the good spectrum is owned by WiMAX players. On the mobile front LTE may win in the long run, but mass market LTE is a couple of years away at best." However, at the end of the day, fixed WiMAX is a smaller market than mobile, which explains why the larger infrastructure vendors have been exiting the market. This opens up opportunities though for small Canadian players like Eion Inc. and SR Telecom Inc., particularly if Canada gets around to licensing the 3.65-3.7 GHz band. "The US has seen an economic downturn but the FCC has released the 3.65 GHz spectrum, which is lightly licensed and therefore virtually free," says Forget. "This is perfectly aligned with Obama's directives, and with the requirements of regional WISPs ." Industry Canada has proposed licensing provisions for the 3.65-3.7 GHz band for both fixed and mobile services, but there hasn't been much movement, perhaps due to the need to understand requirements around exclusion zones and the creation of the right policies. "WiMAX is ideally for licensed spectrum, and that's held by a handful of companies in Canada," says Forget. "If Industry Canada were to go ahead with a ‘light licence' for 3.65 in Canada they wouldn't make millions and millions of dollars, but it would be ideal for the community. In Canada we are often a close follower to the US, and I wouldn't be surprised to see something similar to what the Americans have done with 3.65 in Canada in the not-too-distant future."

Fixed WiMAX expected to weather “Buy American” bill and gloomy analyst predictions

News | 02/09/2009 3:02 pm EST

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