BONN (WiMAX Day). Following the BWA auction in Germany last week, three companies emerged with national licenses for 3.5 GHz spectrum. The hard work for the new license holders now begins in what may become a very competitive market.

Broadband access in Germany has grown quickly and stood at 11.4 million subscribers in March 2006. Some analysts see significant future subscriber growth, and alternative DSL operator Tiscali expects that the market will grow to 20.7 million subscribers by 2008.

However, with new services expected soon from WiMAX operators, the broadband market may expand even more. According to Jan Richter, telecoms analyst at Dresdner Bank, total broadband subscribers will easily reach 27 million in the next two years, with WiMAX connections garnering at least 15% of the market.

WiMAX contenders
Among the three companies awarded national 3.5 GHz licenses, Deutsche Breitband Dienste GmbH (DBD) is positioned to advance rapidly, having already worked in the market for the last two years.

According to Fabio Zoffi, CEO of DBD, “we have laid the foundation to build the largest WiMAX network in Europe. For the next years we plan to invest up to one billion Euro into a German-wide WiMAX infrastructure.” DBD plans to target consumers in metropolitan areas such as Munich, Frankfurt, Hamburg and Rhine-Ruhr starting in March 2006.

Stealing market share from Deutsche Telekom will not be difficult, DBD says. It will compete with Deutsche Telekom head-on, and customers “will get Internet access included in a flat rate for free. This is a radical new business model,” Zoffi said.

While DBD may have a lead in the market, fellow license holder Clearwire also has substantial experience from operations in America, Denmark and Belgium, as well as the resources to make a substantial investment in Germany. A spokesperson for Clearwire was unavailable for further comment.

The third successful bidder was Inquam Broadband GmbH. The company does not have a substantial presence in either the German DSL or wireless markets. However, while at first glance Inquam may seem to lack the broad operating experience of Clearwire and the base of DBD, Inquam will prove to be a significant competitor in Germany based on a highly differentiated market entry strategy.

One of the main shareholders of Inquam is the American company NextWave Wireless. According to Roy Berger, Chief Marketing and Corporate Communications Officer at Nextwave Wireless, “Inquam intends to adopt an innovative distribution strategy under which it will jointly deploy and operate its WiMAX network with well-established partners interested in providing next-generation wireless services to their customers using their existing brands and sales channels.”

Inquam will be the first company to adopt such a strategy for WiMAX, and in Germany the potential for such an operator is unlimited. “We believe that access to the unique wireless broadband technologies that NextWave Wireless is developing, including next-generation WiMAX chips, will provide Inquam with an ability to offer highly differentiated services to its customers,” Berger added.

Prior to the auction last week, Inquam was seen as a wild-card bidder, as its relationship to Nextwave was unknown at the time. Following the auction, “we realised that Inquam Broadband is a very serious company, and the market will now follow them closely,” Richter noted.