IHS Global Insight Perspective | |
Significance | Clearwire has awarded Alvarion and ZTE contracts to supply equipment for a mobile WiMAX network in Seville and Malaga, in the Spanish region of Andalucia. |
Implications | Building on the operator's existing fixed-wireless WiMAX presence in the region, the network is meant to go live next year. Most notably, this would allow Clearwire to beat Telefónica's Long-Term Evolution (LTE) launch and thus give mobile WiMAX some kind of chance to prove its potential in a major European market. |
Outlook | Spanish regulator CMT plans to commence the licensing of the 2.6-GHz spectrum by the end of this year and we would not be surprised if Clearwire was prepared to place a bid over the available frequencies, although the UMTS players will be ready to commit substantial amounts to the same assets. In the meantime, Clearwire's management has recently indicated that it will not stick to WiMAX at any costs, given that a switch to LTE can be done at relatively small investments. |
American wireless service provider Clearwire says it has selected Alvarion and ZTE to supply equipment for deployment of a fourth-generation (4G) WiMAX network in Spain. Under the agreements, Alvarion will supply equipment for the operator's network in the city of Malaga and ZTE for another one in Seville. To be sold under the same CLEAR brand that Clearwire uses in the United States, services in both cities will use the 3.5-GHz spectrum and become available in 2010.
Outlook and Implications
- An Attempt to Make WiMAX Relevant by Going Mobile: According to regulator CMT, as of end-March 2009 there were 52,872 WiMAX-based broadband accesses in Spain, a mere 0.6% of the total. The largest WiMAX provider by a wide margin is incumbent Telefónica's Iberbanda unit, serving around 90% of all WiMAX subscribers, most of whom are based in areas where the operator's fixed broadband infrastructure does not reach (see Spain: 4 March 2008: Alvarion to Expand Telefónica's Spanish WiMAX Network). The other providers include also Clearwire, which entered the market by launching its 3.5-GHz fixed-wireless services in Seville in September 2007 (see Spain: 14 September 2007: Clearwire Launches First Broadband Wireless Internet Network in Spain) but has thus far failed to make a difference against fixed-line and cable groups. Most of all, by starting a mobile (i.e. 4G) WiMAX, the company hoping to break in to the fast expanding mobile broadband segment, which at end-July comprised over 1.6 million 3G datacards (see Spain: 14 September 2009: Telefónica's Spanish Mobile Net Additions Match Market Share in May-July), and thereby make itself relevant in the market.
- Timing the Launch Before Telefónica's LTE Entry: Rather notably, Clearwire's announcement comes a week after Telefónica confirmed that it will start LTE field trials in a number of countries, including also Spain, later this year (see World – Spain: 1 October 2009: Telefónica to Trial LTE in Six Countries with Six Vendors). Given that Telefónica's LTE services will be commercially available towards the end of 2010 at earliest, Clearwire has some time to capitalise on the maturity of mobile WiMAX and see whether there will be a significant uptake. As such, the launch offers a fairly realistic chance for mobile WiMAX to prove its worth in comparison to LTE as a technology path for European operators. If it fails to make an impact, Clearwire's chief executive's comments in September hinted that the company—one of the leading proponents for WiMAX—will have an exit plan in LTE, to which it can switch in most cases by simple software updates (see United States: 16 September 2009: Clearwire CEO Opens Up LTE Switch Possibility). As part of its international strategy, we expect Clearwire to keep a close eye on Spain's forthcoming 2.6 -GHz auction (see Spain: 17 June 2009: Spanish Government Plans 2.6 GHz and 3.5 GHz Auctions by End-2009), even if it would almost certainly face a tough challenge from Telefónica and other rival bidders.