Monday, November 02, 2009

Is WiMax a good business investment?

3 companies were fined a total of 3.8 millions for failing to provide the required WiMax network coverage

WiMax is a technology like WiFi, but has wider coverage range, since they use different protocol, you can not use a wifi device (eg. netbook) connected to WiMax service. The WiFi (the wireless internet that we use at our home and internet cafe) has a shorter coverage range of about 100m, WiMax coverage range is counted by kilometers.

Don't be too excited to get a WiMax license in Malaysia here. Before you start making money, you have to invest tons of money in and you are not sure when you can collected the money back. This is still not the worst case scenario.

So far there are 4 WiMax license issued, to Green Packet (P1 WiMax), Redtone, YTLE (YTL e-Solutions) and Asiaspace. The first three companies are public listed company, only Asiaspace is not public listed, most people are not familiar with Asiaspace. Each company is responsible to provide WiMax service for at lease 25 percent coverage, I assume these 4 companies share the 100 percent coverage, that's how MCMC came out with the 25 percent coverage figure.

P1 (Packet One, backup by Intel) has started to provide WiMax services in August 2008, and P1 is the first to roll out WiMax service in South East Asia. The other three companies are not ready to provide WiMax services yet (I remember Asiaspace did provide WiMax services). Redtone, YTLE and Asiaspace was fined a total 3.8 millions Ringgit Malaysia by MCMC (Malaysia Communications and Multimedia Commission) for failing to meet the required network coverage. YTLE was fined 1.9 millions, Asiaspace was fined 1.7 millions, Redtone was fined 200K.

Don't be too excited by getting a WiMax license, before these companies can provide WiMax sevices, they was fined millions of dollar. P1 has started WiMax service for slightly more than a year now, but the service quality is not good (read my previous post). Heavy investment in advertisement and marketing campaign may bring down Green Packet's profit too (financial report).

WiMax investment could be a money printing machine but it could be money burning machine too.

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