Column
Topics: “Taiwan ICT Industry- Your truly WiMAX partner in the world.”
Jay Huang, Ph.D. Technical Deputy Division Director, Industrial Technology Research Institute

   Recently, the success of Apple i-phone/i-pad and smart handheld devices has pushed mobile data consumption up to gigabyte-a-month level in mature markets, the bandwidth crunch has driven all the operators to adjust. One such change is to speed up the deployment of offload technologies such as WiFi or Femto for existing networks.

Moreover, the high volume of mobile data also forces operators to plan the next generation (higher capacity) of wireless technology i.e. LTE or WiMAX as soon as possible. A further adjustment on the business side is to introduce a flat rate with non QoS (Quality of Service) in mature market (data ARPU>30%) such as Clearwire U.S., UQ, Japan and others, so as to institute tiered charging policies with QoS in emerging markets (data ARPU<10%) such as China Unicom as just one example. For sure, operators in countries like India or Brazil will continue to sell tiered charging based packages for their customers as their data ARPU is far smaller than other mature markets. However, my question is how long can tiered pricing policies be sustained in emerging markets given consumer demand and preference for the iphone, ipad and smart phones; and how can operators in those markets work against this trend?

Despite the excitement surrounding the data services potential of LTE TDD, an analyst at Ovum Ltd. does not see it generating revenue growth for mobile operators and believes the potential for the new technology is overhyped; especially in emerging markets that are price sensitive, such as India, because current infrastructure cost and LTE TDD devices are too expensive for a scalable and meaningful deployment.

It has been estimated that the price of devices in LTE's network is in the range of US$ 150 which is too far above the average as compared to current prices of WiMAX dongles that are in the range of below US$ 30. The price point needed for devices to reach under US$ 30 would be essentially the same as we witnessed in WiMAX, and it may take up-to 24 months to reach those levels.

Given that there is a strong relation with countries purchasing power parity per capita GDP and affordability to pay for broadband services, before GDP growth, how can those operators provide affordable mobile broadband to their citizens?  One of the most appealing characteristics of WiMAX is the allure of a well developed open patent pool which facilitates commercial applications worldwide. Lower costs, broader bandwidth and highly flexible deployment complete the picture. Even in a global financial downturn, WiMAX remains a natural fit. Currently, WiMAX is the ideal technology for broadband use with tremendous innovation to drive down the cost of infrastructure and devices as well as providing affordable mobile broadband not only to mature markets but also to emerging markets.

WiMAX began in Taiwan with the support of government policies and the stated objective of establishing an overall ecosystem that includes component suppliers such as chipmakers, base station equipment manufacturers, testing companies, system integrators, CPE manufacturers and application providers. Figure 1 illustrates that Taiwan has become the most competitive WiMAX nation in the world.

Figure 1: Taiwan's WiMAX Industry Ecosystem

Source: M-Taiwan project, Industrial Development Bureau, Ministry of Economic Affairs, compiled by Market Intelligence & Consulting Institute (MIC), 2011

There are six operators that provide commercial services in Taiwan.  A variety of services such as IPTV, VOIP, Taxi and broadcast services are all available at an affordable flat rate of USD 15 to 20 per month. Except for commercial service, Taiwan government and ICT industry also work hard to extend the WiMAX service on vertical market. Variety of E2E solutions have been developed including disaster management for fire-fighting department, video surveillance for police patrol, video surveillance plus SCADA integration for Tai-power water conservation power plane and WiMAX service on public transportation etc.

Taiwan's ICT industry works hand-in-hand with major global players in forming strategic partnerships that drive the industry forward. Up-to-date, Taiwan provides more than 80% of WiMAX devices globally offering a wide variety such as USB dongles, indoor CPEs, WiMAX embedded notebooks, dual mode handsets, and personal routers.  Operators can find a healthy ecosystem for one-stop shopping from infrastructure to content providers, application and platform developers as well as device vendors. Taiwan's ICT Industry is your WiMAX gateway to the world.

 

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