Business case for WiMAX?

The WSJ had a good article on WiMAX prospects but however did not convince me of the real benefits of WiMAX. http://online.wsj.com/article/SB119498643110891751.html?mod=todays_us_page_one

Per the article ‘Clearwire is trying to cobble together a network to give customers fast, affordable Internet access for laptops and mobile devices in their homes, cars, commuter trains -- almost anywhere’. The key word is “affordable” – not sure how can someone make it affordable without cost advantages compared to competing technology and its deployments.

My understanding of the cost advantages for WiMAX are as follows:

1. Lower CAPEX from Open standards and Clean Intellectual Property Rights (IPR) – leading to lesser expensive equipment

2. Lower OPEX from less expensive spectrum and more advanced technology

Let’s look at CAPEX - Open standards and clean IPR are only marketing terms. Open standards would surely reduce cost but then there has to be so much adoption that economies of scale becomes an advantage. However, if the technology is open standards, then vendors may not be able to differentiate (and earn profits) and hence their motivation to increase scale. Clean IPR or better negotiated royalties could help. But then most of the Orthogonal Frequency Division Multiplexing (OFDM) will come from Qualcomm and few other vendors like Motorola, Intel. Qualcomm has been buying up companies like Flarion, AirGo and TeleCIS that have great Intellectual Property assets. The motivation of Qualcomm remains to maximize their earning potential. And then Qualcomm already has plans for the EV-DO rev C that would be based on OFDM instead of CDMA. For WiMAX one still needs the base stations, the long haul networks, the softswitches, chipsets for both transmitters and receivers as is needed for other mobile technology – in other words am not convinced there would be CAPEX savings.

Now let’s focus on OPEX – if spectrum license is cheap now, it is because there are not enough bidders to drive the price up as was done with the auction of 3G licenses. So not sure the spectrum licenses will be any less once there is excitement in the market. And with respect to more advanced technology requiring less power, space, remote manageability etc, surely this is something that would reduce the cost of operations.

Then the case for WiMAX is that it provides more bandwidth – now if this is a function of the digital technology like OFDM, this advantage will also go away soon.

I liked what Mr. McCaw (Craig McCaw, Chairman of the Board for Clearwire) had to say "There's always been this sort of messiness that's created opportunities." I too remain optimistic but am having a hard time justifying the economics for WiMAX.

What am I missing?