Taiwan revamps WiMAX plans

The global economic crisis has taken a bite out of plans to roll out WiMAX, the speedy new wireless broadband technology. But despite setbacks, Taiwanese companies are forging ahead.

"We're still very optimistic about WiMAX," said Chen Chao-yi, director general of Taiwan's Industrial Development Bureau, at a meeting on Friday.

His optimism appears misplaced amid a load of bad news for the WiMAX industry over the past few months.

Nortel Networks, a major WiMAX player, filed for bankruptcy protection last month and said it would stop developing mobile WiMAX. Major WiMAX vendor, Motorola, reported a massive 2008 net loss of  $4.2 billion and said it will lay off 4,000 workers. At the same time, several big WiMAX backers, including chip giant Intel, Time Warner Cable, and Google, reduced by hundreds of millions of dollars the value of their investments in Clearwire, a company building a WiMAX network across the U.S.

Financial troubles have hit WiMAX in Taiwan as well.

Late last year, money problems at First International Telecom (Fitel), forced the company to dump plans to roll out a WiMAX network in the capital city, Taipei. The network would have been the biggest so far on the island. Now government officials say Fitel may have to sell its WiMAX license and offload its network.

A Fitel spokesman said the company still plans to launch WiMAX services in Taiwan.

Other WiMAX license holders in Taiwan have delayed their launch plans.

Tatung Infocomm was supposed to launch its first WiMAX network on the outlying island of Penghu by the end of last year. Now, the company says it will be ready in March or April.

Despite the delays, Taiwanese government officials and companies remain focused on the future.

"WiMAX is a form of broadband wireless and broadband wireless will always be around," said Ho Kuan-chung, another official from the Industrial Development Bureau. "There will be some companies delaying, but WiMAX is still a good technology."

Government backing for WiMAX in Taiwan has been key to its development on the island so far.

Taiwan launched the M-Taiwan (Mobile-Taiwan) program a few years ago to ensure that people in all locations, including remote mountain villages and offshore islands, will be able to access the Internet wirelessly. WiMAX is a major part of that program.

As part of M-Taiwan, the government has offered generous research grants and co-investment to companies on the island to help jump start WiMAX services. The hope is that by being an early adopter and producer of WiMAX products, Taiwanese manufacturers will benefit from the global deployment of WiMAX.

"We haven't seen any impact [from the global downturn] on WiMAX production. Production is still on track," said Liu Ming-shou, president of Accton Wireless Broadband (AWB) in Taiwan.

"There will be some impact on orders from Nortel," he added. "So far, we have not seen any impact, but I believe we will."

Other manufacturers hope that big government stimulus programs that include investments in broadband Internet technology, such as from the U.S. and China, will keep WiMAX sales healthy. They also believe WiMAX will make big waves in emerging markets, where wireless technology costs less than laying cables across thousands of miles of territory.

"The future of WiMAX is clear. D-Link will continue to invest in this technology," said Anny Wei, president of D-Link.

Copyright © 2009 IDG Communications, Inc.

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