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Study: Net phones key to WiMax success

When WiMax becomes available in a couple of years, providers should look to VoIP to boost revenue, according to In-Stat/MDR.

The wireless broadband standard called WiMax won't be ready for prime time for a couple of years, but when it does come out, Internet phone service could be the cash cow for providers, according to a study.

WiMax, a technology standard that will provide broadband Internet access over many miles of coverage, is expected to make a big splash when services emerge in 2006 or 2007. That's because WiMax could become a third option for broadband access, challenging cable companies and DSL providers.

While high-speed data access is considered a driving force behind WiMax's consumer appeal, service providers must bundle features such as VoIP--voice over Internet Protocol--to make enough money for survival, according to a study conducted by market researcher In-Stat/MDR.

"The industry is focused on WiMax from a data standpoint, but the reality of the industry today is that you need to have voice to be financially viable," said Keith Nissen, an analyst at In-Stat/MDR.

WiMax's promise lies in its ability to deliver broadband to large areas without wires stretched into homes by local phone and cable companies. Proponents of the technology add that WiMax will bring broadband to rural areas that phone and cable companies do not reach.

While there are currently many "fixed" wireless providers dotting the globe, WiMax efforts have resulted in a standard, known as 802.16-2004, that allows equipment makers to operate in a common language. New versions of WiMax in the works are expected to allow mobility, letting users travel freely between locations and service providers.

WiMax is not expected to enter the mainstream until 2007, since testing among equipment makers is still six months off. But by 2009, WiMax services will have amassed 8.5 million subscribers, or 3 percent of the total broadband market, and more than half of them will subscribe to VoIP services bundled into their WiMax plans, according to In-Stat/MDR.

"When you get full mobility under WiMax, you will be able to drive around town and do VoIP the same as you would over a cell phone," said In-Stat MDR's Nissen.