WiMAX in China: Opportunities and Challenges

WiMAX development, particularly mobile WiMAX, is still at its early stage in China. Currently, only 3.5-GHz spectrum licenses have been allocated by China's Ministry of Information Industry (MII) for fixed wireless access services. Because of limited technology availability of mobile WiMAX and uncertainty of the regulatory environment, we don’t anticipate China to have meaningful WiMAX deployments until 2009. As shown in Exhibit 1, the Chinese WiMAX market will reach 1.25 million user bases in 2009, and grow exponentially to 8.39 million user bases by 2011. Nomadic and portable broadband access user bases will take the biggest market share, accounting for 46% in 2011. Mobile broadband and low-cost fixed wireless access services rank No. 2 and No. 3, accounting for 43% and 11%, respectively. Compared with mobile, nomadic and portable broadband access services, fixed wireless broadband access services is not optimistic. Currently, the Chinese fixed broadband access market is dominated by the ADSL services offered by China Telecom and China Netcom. Because of the maturity of the technology and scale, ADSL offers very competitive price and a compelling data rate. The opportunity of WiMAX fixed broadband access resides in the market that lacks broadband infrastructure such as ADSL and digital cable.