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Addressing the Value of WiMax to Emerging Market
Consumers
Late last week,
Motorola announced an agreement with Vietnam
Data Communications to launch WiMax testing in
Vietnam later this year. This announcement came just
days after Ericsson
spoke publicly about their refusal to put their
weight behind WiMax, claiming it lacks a business
model. While Ericsson continues to remain focused on
cellular broadband, building upon existing
infrastructure instead of transferring over
capabilities to WiMax, others like Motorola and
Intel believe that WiMax is a cost-efficient way to
boost broadband adoption in developing countries. Motorola, Intel, Samsung, and others are clear about their
interest in this emerging technology. Yet,
widespread WiMax adoption in developing countries is
not guaranteed.
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Investors bare the risk that
governments may choose not to support WiMax in their
spectrum allocation policies favoring homegrown
technologies. In addition to spectrum policy issues,
WiMax success or failure rests on its true
addressable market and its value proposition against
available options in
developing countries. Once established as a viable
technology, the addressable market for WiMax will
depend on customers’ eagerness to have and ability
to afford broadband access and devices. With price-sensitive
consumers, the value (or net utility) of broadband
has to be carefully weighed, and
recent studies show that, for new users, access
to high-speed connections is not necessarily a
priority.
The opportunity for corporations banking on WiMax is
to focus on the value proposition of the technology
in this market. The technology alone will not
automatically induce adoption. Essential to WiMax
success are service offerings, devices and go-to-market plans
that maximize the net utility offered by the
technology to the price-sensitive customers of
emerging economies. This can be done, in part,
through the introduction of services and
applications via strategic relationships. Key partnership
areas will include financial institutions to
facilitate electronic payments and remittances,
health professionals for delivering and collecting
health-related information, and advertisers who are
willing to supplement WiMax service costs in return
for access to these new markets. With a great value
proposition for the customer and reliable market
data about where to focus their efforts, MNCs will
be better equipped to benefit from the potential of
the WiMax market.Also in the news:
Special
thanks to Chetan Sharma for his contribution to
this article.
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