ThinkEquity: WiMAX Is Still Hot

Although there’s been questioning as to WiMAX’s future in the United States now that Clearwire Corp.’s nationwide rollout of the technology has been slower than expected, the analyst firm ThinkEquity Partners says U.S. rural broadband initiatives and the impact of WiMAX roaming clarity will to lead to stronger subscriber attraction and carrier deployment, based on stronger business cases.

WiMAX will be even more attractive as it becomes clear that chief 4G competitor LTE will not likely reach broad deployment before 2014. “We assert that broadband mobile device and application vendors will be naturally drawn to WiMAX, even if they are currently not persuaded,” said analyst Eric Kainer, in a research note. “Faced with a consolidating competitive environment, yet challenged with restrained carrier funding, we establish lower 2009 estimates and new 2010 estimates built around better WiMAX market growth.”

At the same time, the exit from the WiMAX business of large vendors like Alcatel-Lucent and Nortel Networks will actually help clarify the market for carriers. ThinkEquity points to WiMAX vendor Alvarion Ltd. as a potential object lesson, based on the gear-maker’s earnings reported this week: “Customer funding has stalled certain projects, and the market has not yet stabilized, leading to a wide revenue guidance range. We continue to believe that the competitive environment is calming; whereas Alvarion notes the likely exit of smaller competitors during 2009…we may find that the only remaining scale WiMAX vendors are Huawei, Samsung, and Alvarion, with some smaller vendors scrapping for niche or regional contracts and others exiting the business.”

As far as the global view, for 2009 and 2010 Kainer expects strength from customers in Australia, Ireland, the U.S., Japan and “perhaps India, depending on its licensing

procedures.” This strength is balanced by weakness in Russia and some areas of Africa.

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