Ericsson Hovers on WiMax

Ericsson AB (Nasdaq: ERICY) has become the last major wireless networking vendor to sign up to the WiMax Forum, but remains cautious on the long-term potential of 802.16 technology.

According to a statement today, the company expects its initial offering to focus on the fixed wireless 802.16d standard. “Ericsson plans to offer WiMax as part of the Public Ethernet offering and as a complement to DSL,” notes the announcement (see Ericsson Joins WiMax Forum).

“We see the market for WiMax being driven by wireline demand,” Karl Thedeen, VP of product area wireline, tells Unstrung. “Wireline carriers are the ones looking to deploy broadband solutions and boost DSL coverage.”

Ericsson appears unwilling to commit to a future move into the 802.16e market, a standard that aims to support faster handoff between base stations, facilitating mobile applications. “We don’t see WiMax as a mobility solution,” says Thedeen. “Even the e standard will not give it the capability of a truly mobile cellular solution.”

Spokesman Peter Olofsson is keen to add, however, that the vendor has not completely ruled out such a move. “It depends on demand. It has not been decided on.”

One reason for this strategy could be the competitive threat from 802.16e on Ericsson's 3G cellular infrastructure revenues. "We've consistently advocated that 3G vendors join the forum, if only to keep WiMax from encroaching too far on their turf," comments Current Analysis's Peter Jarich. "A go-slow attitude on 802.16e and WiMax mobility suggests that this might be Ericsson's strategy - a logical strategy for the market leader."

No specific product details are available on either standard. “We don’t want to give dates and details as it is far too early,” adds Ericsson's Olofsson.

Unlike some industry players, the Swedish giant certainly isn’t guilty of market overhype. “We are still very uncertain about the full market potential of WiMax to be honest,” admits Thedeen. “There is still a lot of uncertainty.”

Fellow heavy hitters Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Cisco Systems Inc. (Nasdaq: CSCO), Lucent Technologies Inc. (NYSE: LU), Motorola Inc. (NYSE: MOT), Nokia Corp. (NYSE: NOK), Nortel Networks Ltd. (NYSE/Toronto: NT), and Siemens AG (NYSE: SI; Frankfurt: SIE) have already joined the forum. (See WiMax Gets Serious, Cisco Joins WiMax Forum, Lucent Joins WiMax Forum, Moto Joins WiMax Forum, Nokia Rejoins WiMax Forum, and Nortel's WiMax Coming Out.)

— Justin Springham, Senior Editor, Europe, Unstrung