Another one bites the dust: Worldmax shuts WiMAX network in Amsterdam

The ink has barely dried on Jim Baker’s article “Is WiMAX A Failure In The UK” detailing the demise of Freedom4, one of the two UK WiMAX operators, when Dutch WiMAX operator, Worldmax, has decided to terminate WiMAX service in Amsterdam by the end of July 2010. The purported reason is a conflict with the military: “The company said it’s unable to expand the service due to interference in the 3.5GHz band with a ministry of defence ground station for an intelligence satellite. In the name of national security, the government put restrictions on the Worldmax operating licence.”

Interference with  military satellite system

The Dutch military opposed Worldmax’s expansion outside Amsterdam on grounds that the WiMAX network interferes with a satellite ground station. Worldmax sued for €100 million in damages but its claim was rejected because the frequency license gave the government the right to restrict the network for national security reasons.

Big losers in the Worldmax debacle: Intel Capital and Greenfield Capital Partners

Worldmax paid €4 million for the license and its investors – Intel Capital and Enertel Holding – had put in around €30 million ($37 million) to launch the network. Greenfield Capital Partners, an 80 percent owner of Enertel Holding, stands to lose €12 million. Intel even put in more money in 2009.

Would Worldmax have succeeded anyway?

I don’t think the military was its most serious problem. The lack of WiMAX devices, the availability of 3G service at reasonable prices, Worldmax’s failure to win one of the 2.6 GHz licenses, the economic crisis (leading people to cut down on their communications spending), the poor indoor reception and lack of roaming capability to other countries (the Netherlands is tiny; three hours drive and you are in Germany or Belgium) — all of these factors conspired to make WiMAX the least attractive wireless broadband solution. They were banking on getting customers outside Amsterdam but bear in mind that the Netherlands is a small, densely populated country with excellent DSL, cable and fiber broadband options, a lot of Wi-Fi networks, and HSDPA+ service at affordable rates. In its favor were high download speeds, but apparently that isn’t enough.

So unfortunately, Worldmax joins Freedom4 in the graveyard of European WiMAX operators. Adieu!

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