Summary: Why Mobile WiMAX can succeed in mature mobile markets

Here's a summary for those that don't want to plough through the rather long post below.

A mobile WiMAX operator can be successful in a mature mobile market if it:

1. doesn't offer services that 3G networks are good enough at. In particular, voice, because a new WiMAX network will definitely NOT be good enough on coverage and will not get mobile interconnection. Allow free access for VoIP services
   
2. concentrates on what it can do better than 3G, not try to fix it's shortcomings or copy 3G services.
   
3. concentrates on differentiation. Investors demand above-average returns on their investments. Above-average returns come from competitive advantages. Competitive advantages come from either lower costs or differentiation (or network effects) - and a new mobile WiMAX network certainly won't benefit from economies of scale. WiMAX's primary competitive advantage, until LTE arrives, is better performance.
   
4. develops premium services for customers for whom the performance of 3G networks are not good enough and where WiMAX is better. This primarily means businesses and a few very demanding consumers
   
5. ignores 'average' consumers for a while. Most of these are not willing to pay more for better services even if they whinge about performance
   
6. moves quickly to build its network - it has three to five years before LTE rolls out - but builds selectively, targeting demand rather than coverage - so, large cities first (which is also where 3G broadband is under the most pressure)
   
7. focuses on making above-average margins and profitability rather than a land-grab for customers - although energetic solution sales skills are a must for its sales teams
   
8. ignores rural markets (unless it's demanding customers value it sufficiently to make it economically attractive, unlikely as that sounds)
   

This is, of course, as long as the 3G operators don't manage to bamboozle the regulator into withholding WiMAX spectrum any longer.

A mobile WiMAX operator can damage the investment case for LTE by taking the most demanding customers now - because LTE and mobile WiMAX are so similar that there is no way to build differentiated products on the basis of the technology, so once a mobile WiMAX network has these customers then a 3G/LTE operator is not good enough to win them back UNLESS it makes a disruptive, low-price play. However, a disruptive play is highly unattractive when the majority of the costs are sunk in infrastructure because, when push comes to shove, the incumbent can write down its investment and match pricing to keep the competitor out, as happened with fibre networks - which is why WiMAX doesn't work as a disruptive play either.

Over a relatively short time increasing demand for bandwidth will mean that more and more consumers will fit into the 'more demanding' category and will look for services that can only be delivered over the WiMAX network.

So many different services will work over a broadband infrastructure and require better quality bandwidth that there is plenty to go for. More on this later.