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TELECOMS AND SOFTWARE NEWS
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WiMAX far behind schedule in France
Julien Grivolas
WiMAX far behind schedule in France
ARCEP recently examined the deployment progress of the 3.5GHz spectrum holders against the obligations set out in their licences. The result was far from the initial expectations of the regulator, with only 15% of the promised sites up and running by the end of June. In our view, there are three main reasons: a fragmented WiMAX market, industrial delays and difficult business cases in a developed broadband market.WiMAX is likely to remain a niche market in developed broadband countries Developed markets with significant broadband penetration and increasingly available mobile broadband services present a difficult challenge for WiMAX as it does not bring any real service differentiation. In addition, the cost of WiMAX devices, when available, will also be a barrier. Areas with no DSL or mobile broadband may offer a greater window of opportunity for WiMAX, but it will remain a niche market. The mobile WiMAX industry is partly responsible for this situation, and the impact is not just in France
Most of the French WiMAX players decided to adopt the mobile WiMAX standard, even for the supply of fixed wireless services. This is because of the stronger ecosystem behind the technology and the promise of a wide choice of devices supporting the technology at a low cost. However, as for any technology, this takes time to materialise, particularly on the devices side. Volume drives cost reduction. Even in Taiwan, which is the main development centre for WiMAX devices, licence holders have postponed their service launches until 2009. Global Mobile explained the delay as due to the need to wait for the adequate availability of devices and low-cost base stations.However, after several delays, the situation is evolving positively; the first certified mobile WiMAX products are available for the 2.3GHz and 2.5GHz bands, with 3.5GHz products to follow.A fragmented WiMAX market is a barrier At the time of the licence allocation in July 2006, we commented that we had difficulty understanding ARCEP's vision regarding WiMAX, and its expected impact on the French telecoms landscape. This was because most of the licences were allocated to new entrants rather than established French or foreign telecoms players. Furthermore, the geographical segmentation of the spectrum added complexity, with none of the selected companies able to provide nationwide coverage. There has since been some consolidation, with Bollore Telecom purchasing eight regional licences from HDRR to achieve almost nationwide coverage (two regions are still missing). However, the market is now even more fragmented, with a total of 19 licence holders compared to the original ten. This is mostly due to the fact that the regional public authorities that won spectrum are distributing their rights at a department level. The reality of WiMAX in France is not meeting the hype which accompanied the WiMAX licence allocations Two years after the allocation of the regional WiMAX licences in France (for around €125 million in total) it is fair to say that the current situation is far behind what was promised at the time. 3,564 sites were supposed to be operating by the end of June 2008, but only 526 were effectively up and running at that date - 15% of the target. For example, Bollore Telecom, the most aggressive bidder for WiMAX spectrum, had only deployed 11 sites by the end of June 2008 instead of the 968 sites it was supposed to have rolled out. However, there are even worse situations, as nine licence holders have done nothing.Of the 19 players, only three had met their rollout obligations by 30 June 2008. From now on the WiMAX players must update the regulator on their rollout status every six months. This supervision will continue until the next authorisation deployment obligation deadline, scheduled for December 2010.
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