WiMAX has gained traction globally because of its potential of offering wireless broadband services in fixed, nomadic, portable and mobile operating scenarios and its ability of delivering personal broadband service. WiMAX, particularly mobile WiMAX development, is still in the early stage in China. We don’t anticipate that China will have meaningful WiMAX development until 2009.

The Chinese WiMAX market will reach 8.39 million users in 2011, almost 7 times the 1.25 million users we project for 2009. The nomadic and portable broadband access user bases will have the biggest market share (46% in 2011); mobile broadband and low-cost fixed wireless access services will rank second and third (43% and 11%, respectively).

Like any market development for new technology in China, the Chinese government’s support is essential for the success of the new technology. WiMAX is no exception. China’s Ministry of Information Industry (MII) has yet to allocate mobile WiMAX spectrum, which is crucial for mobile WiMAX development in China. This also signals to the industry that MII has yet to make up its mind about mobile WiMAX development in China. The 2.3-GHz and 2.5-GHz bands are ideal mobile WiMAX spectrums, but MII allocated those for 3G-TDD technology and cable transmission, respectively.

Under the self-innovation and self-owned intellectual property rights (IPR) policy, MII has been unwaveringly promoting TD-SCDMA, the native-developed 3G standard. Because of MII’s full attention on TD-SCDMA, we don’t anticipate 2.3-GHz to 2.4-GHz bands will be under discussion for reallocation in the next 24 months. On the other hand, 2.5 GHz is currently underutilized and could potentially be used to deploy mobile WiMAX. We believe reallocating the 2.5-GHz band to mobile WiMAX could generate broader industrial value than its current application because of the global development of the WiMAX ecosystem.

However, SARFT, another regulatory body focusing on China’s media industry, regulates the 2.5-GHz spectrum. MII and SARFT have to reach an agreement before MII can reallocate 2.5 GHz to mobile WiMAX. Although it’s challenging for MII to reallocate spectrum resources that are under other ministry’s supervision, it can be done. The successful reallocation of the military’s 800-MHz spectrum for China Unicom’s CDMA network is a good example.

Regardless, reallocation of 2.5 GHz—whether by MII or SARFT—will be very challenging. However, it is a domestic issue. To accelerate mobile WiMAX policy development, the key for MII is to show the government that Chinese companies can benefit from mobile WiMAX development in China. Even though the Chinese government is promoting self-innovation and self-owned IPR, there is no sign that the government wants to isolate itself from the rest of the world. This applies to TD-SCDMA as well.

Since day one of TD-SCDMA development, MII invited and encouraged foreign investment and foreign vendors to participate in the TD-SCDMA industrial chain. Foreign investment and vendors made skeptical and passive moves toward TD-SCDMA development, which will become irrelevant

© Copyright 1997-2007. Yankee Group Research, Inc. All rights reserved.

by XJ Wang, Vice President, Asia-Pacific Research, Yankee Group; Yi Zhou, General Manager of Research,

Executive Summary

Philip Marshall, Ph.D., Senior Vice President, Enabling Technologies Service Provider, Yankee Group | April 2007

WiMAX, particularly mobile WiMAX, is still in the early stage in China. We don't anticipate that China will have meaningful WiMAX development until 2009. Chinese government support is critical, but China's Ministry of Information

Industry has yet to allocate spectrum for mobile WiMAX. Nonetheless, between 2009 and 2011, we forecast that the WiMAX market in China will grow almost seven-fold.

WiMAX, mobile WiMAX, TD-SCDMA, China, forecast, spectrum CEO, CIO, CMO, regulator