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Tuesday, August 08, 2006

WiMax Nation: Intel, Motorola, Sprint and Alvarion

Stocks: (INTC)(MOT)(ALVR)(S)

The Wall Street Journal reported that Sprint will use WiMax to build its wireless network over the next several year. Just a couple of years ago, no one thought WiMax would work and it seemed doomed to be one of those good tech ideas with no practical application.

But, Intel and Motorola would not give up on the patient. They felt it was to valuable to die. Intel put $600 million in to broadband wireless firm Clearwire, lead by cell legend Craig McCaw. Motorola also put money into the deal. Clearwire now has WiMax working in 27 cities, and AOL sells the technology in California and Florida. But, it seems like a crazy uncle's tech until Sprint decided to adopt it. According to CIO Today, Clearwire only brought in $8.5 million in service revenue last year.

Jupiter Research just put our a report saying that mobile WiMax will have 1.7 million subscribers by 2007 and 21.3 million by 2012, driving $2.53 billion in revenue. No one can really see out that far, not even Jupiter which is noted for its long-term forecasts, but it would appear that rumors of WiMax's demise were premature.

The Vietnam Investment review recently ran an article saying that WiMax deployment could kill 3G cell service before they even begin to get broad adoption. In Vietnam, the government is working with Intel and other companies to put in equipment that will begin to power WiMax deployments around the country.

News reports from New Zealand ( indicate that Intel is working aggressively with the national government to roll out WiMax in that country.

Techweb recently reported that Mexico was launching a WiMax mobile initiative in that country: "Ultranet2go, a unit of Zoma Telecomm, officially launched Friday mobile broadband wireless to cover a wide swath of Mexico".

Motorola and Softbank are launching WiMax tests in Tokyo and Intel plans to launch WiMax trials in India in the next couple of quarters.

Aside from Intel and Motorola, the other big winner in WiMax deployments is Alvarion, which, according to SkyLight Research, provided 81% of all deployments across 80 countries in 2005 according to SW Business of Findland. Alvarion may be the biggest winner in all of this. The company, based in Israel, has a market cap of $413 million, and trades at $6.80 on a 52-week high/low of $10.96/$4.92. If WiMax deployments continue at the rate Jupiter projects, the stock could go much higher

So, it would appear that WiMax lives. Whether it kills 3G is another matter altogether.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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