Spectrum allocation and other regulatory issues continue to dog WiMax adoption in Asia, according to industry observers. One Malaysian analyst warns that such uncertainties could also cloud investor confidence in the local market.
Speaking to ZDNet Asia in a telephone interview, Victor Liu, an analyst at market research company In-Stat, said most Asian regulators have pigeonholed the 2.3GHz and 2.5GHz spectrums for WiMax services.
However, Liu said deploying WiMax services on the same spectrum will be most ideal because equipment vendors can benefit from economies of scale. "People can also roam from one network to another [seamlessly]," he added.
"But this is difficult because different spectrums have been allocated in different countries," he said. "It's hard to find a commonly available spectrum for WiMax to ride on."
And even if regulators have decided on which spectrum to allocate for their country's WiMax services, they also need to consider interference issues that may result from spectrums adjacent to the ones used by WiMax applications, Liu explained.
"[Regulators] may have allocated adjacent spectrums to other services. At the 2.5GHz spectrum, for example, there might be problems with satellite signals," he said.
The solution, he suggested, may be for regulators to shift satellite services to another spectrum by negotiating with satellite players. He added that regulators will also need to iron out interconnection issues between existing telecoms operators and WiMax service providers.
For example in Hong Kong, agreements that address call interconnections between operators as well as billing issues, have already been established between fixed-line and mobile operators.
"In Hong Kong, they have mentioned that [service providers] can put data and voice on WiMax," Liu said. "But the problem is when you enable voice on top of WiMax, regulators have to come up with a solution on how the interconnections can be done between WiMax service providers and existing operators."
He added that Hong Kong regulators have to either fit WiMax into the existing interconnection framework, or to come up with a completely new model.
"It's difficult because they have to balance the interest of different parties, such as 3G operators who have paid a lot for their licenses," he said.
WiMax hazy in Indonesia, too
In Southeast Asia, Liu also singled out Indonesia as the country with potential issues that could put a damper on WiMax services.
"Previously, the Indonesian government even charge license fees for the Wi-Fi spectrum," he said. "So, it's going to be even more difficult for WiMax service providers to enter the local market."
According to media reports, the Indonesian government tried to block Intel's WiMax equipment from being shipped to the country last year. The local authorities also reportedly raided Internet cafes in Yogyakarta that were operating Wi-Fi access points.
Liu also highlighted issues in Japan, which has traditionally been a competitive market for communications services.
"When WiMax first surfaced, many people were interested in getting into the business," he said, adding that the number of licenses allocated in Japan may be fewer than the number of interested parties.
"The Japanese government has to decide to whom they should allocate the spectrums," Liu said. "If they can only issue three licenses, there might be an issue if there are six or seven applicants."
In China, the government has always been protective of their own companies and technologies, Liu said. He noted that the delay in the rollout of TD-SCDMA--China's homegrown 3G technology standard--could also hamper the deployment of WiMax, since it is in the government's interest to see its own technology succeed.
Liu said WiMax is particularly effective in providing wireless broadband access to rural parts of China. To maximize coverage in a cost efficient manner, Liu said wireless operators may choose to use the 750MHz spectrum, which can cover a wider area with fewer base stations.
"That means China's WiMax equipment may not be compatible with other WiMax networks in other parts of the world," Liu said, adding that it could be possible that China might issue WiMax licenses on lower frequency spectrums to allow domestic vendors to produce equipment for the Chinese market.
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