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International branded vendors playing key role in Taiwan WiMAX industry

International branded network-equipment vendors have been playing an important role in the development of Taiwan's WiMAX industry over the part two years, in part because they are determined to build up their respective ecosystems alongside Taiwan CPE product makers given that WiMAX is an open standard.

The most active international equipment players in the Taiwan WiMAX industry include Alcatel-Lucent, Motorola and Nortel Networks, with all of them having either set up a WiMAX IOT (interoperability testing) center or have announced plans to establish such a center.

Nortel set up its IOT center in Taiwan at the end of 2006, making it the first international brand vendor to establish such a project. Alcatel-Lucent followed by inaugurating its WiMAX IOT center in February 2008 and Motorola announced recently that it plans to build its first global WiMAX IOT center in Taiwan in the third quarter of this year.

The services offered by the IOT centers allow Taiwan-based WiMAX CPE makers to enter interoperability testing with devices from other equipment makers in the most efficient manner. In addition, the certifications received by Taiwan makers from the centers enables them to step into the supply chains of international brand vendors and even allows them to win orders directly from WiMAX operators around the globe.

The local clients of each IOT center, as well as the local partners of each ecosystem operated by the international players are not exactly the same. However, the proliferation of the centers offers an opportunity for Taiwan-based network-equipment makers to work with more than one international equipment supplier, which is in contrast with the previous experience of Taiwan makers who were mostly confined to cooperate with only one big player. Zyxel Communications, Quanta Microsystems and Accton Technology, among others, are now working under such a pattern.

Even so, shipments of WiMAX devices from Taiwan makers were still rather limited in the first half of 2008 with most makers reluctant to reveal WiMAX shipment figures, despite some market sources indicating that shipments of WiMAX devices by Taiwan makers in the first half of 2008 were higher than those they shipped in the second half of 2007.

The continuing small-volume shipments of WiMAX CPE products from Taiwan makers may be an indication that international equipment vendors are still working on the construction of WiMAX infrastructure for contracts secured from operators, with demand for WiMAX CPE devices to pick up later.

Alcatel-Lucent claimed that the number of WiMAX contracts it secured so far exceeds 70, and Motorola stated that it has won about 70 WiMAX contracts with around 20 networks already commencing commercial operations.

Mike Shieh, president of Motorola Electronics Taiwan, has said that Motorola and most WiMAX CPE makers are ready to offer WiMAX equipment and devices that support MIMO 802.16e Wave 2 technology. In addition, US-based wireless operator Clearwire has begun testing its 802.16e Wave 2-based WiMAX networks which will help accelerate the commercialization of WiMAX services.

The WiMAX market will begin to take off in 2009, marking the year a milestone for the WiMAX industry, Shieh contended.

According to Taiwan WiMAX hardware makers, Alcatel Lucent, Motorola and Nortel actually have begun small-volume purchases of WiMAX CPE products from Taiwan suppliers, with Nortel being the first international brand vendor to implement the buying policy.

Although Motorola has not yet announced the Taiwan partners of its WiMAX ecosystem, a number of Taiwan makers are pinning their hopes on building up business relationships with Motorola, given that Motorola is the supplier of base stations for Sprint Nextel and a shareholder as well as a major partner of Clearwire.

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