Lehmann Brothers has released a bullish prognosis for WiMax in developing Asian markets and rural Australia, stating it believes incumbents may be among the major beneficiaries.

In one of the most detailed analyses of WiMax issued for Asia to date, the investment firm says that it was “particularly optimistic about the prospects for fixed WiMax in developing markets in Asia, where the copper infrastructure is too weak or limited to provide broadband services using DSL. We believe that WiMax and other wireless broadband technologies will be particularly successful in markets – such as India, Malaysia, China, the Philippines, and Indonesia – with low broadband penetration.”

Beneficiaries could include Bharti, Reliance Comm, Indosat, PLDT, Globe and PT Telkom. Low broadband penetration rates show the potential for WiMax to pick up the slack. “Currently, broadband penetration is only 13% in China, 11% in Malaysia, 2% in India and 0.5% in Indonesia,” the firm said.

Lehmann also believes that WiMax will be successful in the “rural regions of developed markets, such as Australia, where there is sufficient purchasing power but a lack of robust fixed-line infrastructure to provide DSL. The prime beneficiaries are likely to be Unwired Australia and Austar.”

It says WiMax technology presents a near-term opportunity for alternative Australian carriers to offer an infrastructure-based broadband solution to niche markets. “On the other hand, we believe that WiMax services are unlikely to significantly disrupt the competitive balance in the wireless markets, given the nascent stage of wireless broadband services in Australia and the niche market it targets.”

WiMax’s Australian success may depend on how quickly it can come to market. “Competing technologies such as ADSL2+, HSDPA and possibly FTTN continue to be adopted at a rapid pace. If mobile WiMax infrastructure/handsets take too long to develop, it could lose its viability in the Australian market.”

However it sees little role for WiMax in developed Asia. “We are pessimistic about the prospects for WiMax like services, given the high broadband penetration rates and the extensive 3Gcoverage. More specifically, we do not think that KT and SKT’s WiBro service will be successful in Korea. Moreover, we believe that WiMax will only provide niche market services in Singapore, Taiwan, and Hong Kong.”

There may also be some losers from any success for WiMax. “In the Asia-Pacific region, we believe that China Telecom, China Netcom, Chunghwa Telecom, MTNL, Telstra, and Telekom Malaysia are a few of the fixed/integrated telecom operators in the region that could see some of their broadband business hurt by the growth of fixed wireless broadband services offered by WiMax. We believe that this problem will become more acute as more wire-line traffic is related to broadband data (including VoIP) versus voice traffic.”

On the equipment side, Taiwanese vendors such as Cybertan, Alpha Network, and Zyxel may prove the greatest beneficiaries in the region.

add to delicious | add to digg | search technorati