Hold off on WiMAX investments, Gartner cautions

Analysts say businesses should wait until WiMax is more widely deployed and there are more dual-mode handsets

Businesses should hold off on investing in WiMAX until the technology is more widely deployed across the United States and until vendors produce more dual-mode cellular/WiMAX handsets, says a new report from Gartner Research.

Overall, Gartner projects that while WiMAX networks in the United States will start operating commercially over the next two years, WiMAX itself will remain a "niche technology" that will best serve emerging or rural markets that don't already have access to broadband services. One of the big factors that WiMAX has going against it, says Gartner, is that WiMAX networks won't be able to provide nationwide coverage for quite some time, as Sprint and its Clearwire partners will only begin launching commercial WiMAX services for the first time this September. Thus, says Gartner analyst Phillip Redman, businesses will have to wait until coverage extends to many more cities than the ones that will be covered by the end of the year.

Additionally, Redman says that enterprises that want both WiMAX data and cellular voice capabilities will have to wait at least a couple of years until more dual-mode handsets are produced. Since WiMAX is starting out as a data-only service, Redman says that unless businesses want to rely on VoIP for their mobile voice needs, they should look elsewhere until WiMAX devices are upgraded to include cellular coverage.

"In competitive markets, WiMAX is going to have a very tough row since it's starting from scratch," he says. "But WiMAX still has great opportunities in different markets. I think it makes sense in developing markets and developing economies that don't have broadband comp from wireline carriers."

Sprint currently plans to offer its first commercial WiMAX services in September in Baltimore, with launches in Washington, D.C., and Chicago scheduled for later in the fourth quarter. The company says other major metropolitan areas shouldn't expect WiMAX to come to their cities until at least next year.

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