The Wi-Fi War
The claims of invested parties notwithstanding, real world data rates for both standards are expected to be comparable. Up to this point, the prime differentiator, and WiMAX’s greatest advantage, has been timing. WiMAX is already up and running in two U.S. cities and is enjoying even greater market penetration overseas. LTE has yet to be standardized and will come out of the gate in catch-up mode. While LTE proponents expect the standard to be finalized later this year, WiMAX boosters refer to LTE as "vaporware" or "LaTE."
The downturn in the economy has hampered WiMAX’s lead in the race to dominate the U.S. market. To complete its nationwide footprint on time, Clearwire estimates that it will need $2.3 billion in additional funding, without which it will have to slow its deployment plans. The silver lining is that a slowdown allows more time for WiMAX-enabled devices to hit the market and for prices of WiMAX infrastructure equipment to come down.
LTE’s opportunity to gain ground on WiMAX will likely be mitigated by the same global economic malaise. WiMAX supporters point out that LTE is more than an incremental evolution of 3G. "[Many] believe that LTE is a minor upgrade from HSPA, and that’s not really the case," says Clearwire’s Davis. "It’s a forklift upgrade. You have to build an entirely new backend core network." Verizon is shooting for an LTE commercial launch in 2010, but few neutral observers see much real-world LTE before 2011 or 2012.
Other than their respective rollout schedules, the differences between WiMAX and LTE spring largely from their pedigrees. WiMAX is a product of the IEEE, which is more supportive of open standards than the patent-encumbered 3GPP. "WiMAX is a much more aggressive, open-minded modality than the traditional walled-garden of the mobile world," says William Mutual, CEO of LiveCast Media, Inc. "[WiMAX operators] know that they have only so much time to show that they’re getting market penetration or they’re cooked." Because of open standards, intellectual property costs are expected to be lower for WiMAX.
On the other hand, the mobile operators enjoy considerable fiber backhaul capacity and marketing muscle. With its $6.5 billion purchase of 700 MHz spectrum in the 2008 FCC (Federal Communications Commission) auction, Verizon has staked its claim to the spectrum for its LTE offering. According to Gartner, GSM will account for 89% of the global cellular market in 2011, and most GSM carriers are expected to follow the upgrade path to LTE.
In any case, WiMAX may face a more immediate competitor before LTE makes the scene. AT&T and other HSPA networks can delay the heavy lifting required for LTE deployment by adopting HSPA+ (HSPA Evolution), an intermediate, lower-cost upgrade that can squeeze 3Mbps–5Mbps on the downlink and 1Mbps–3Mbps on the uplink when combined with MIMO (Multiple Input Multiple Output) technology. The HSPA+ option is not available to CDMA/EV-DO operators.
The 460 WiMAX deployments in 13 countries covering 430 million potential subscribers reflect the fact that the "W" in WiMAX stands for worldwide. In fact, WiMAX was first commercially deployed in South Korea under the name WiBro in 2006. As Intel executive vice president Sean Maloney noted at the Mobile World Congress in Barcelona, Spain, in February, "WiMAX is a global market, and 80 percent of that market is overseas." For example, India’s Tata Communications plans to spend $1 billion to $2 billion over the next 2 years building what it calls "the world’s largest commercial WiMAX network." The company is shooting for 20 million WiMAX connections in 115 Indian cities by the end of 2010. Many other countries, including Brazil, Germany, and Mexico, are planning spectrum auctions in 2009. Some observers see the developing world, with its limited wired broadband, as WiMAX’s lowest-hanging fruit.
Figure 4. India's Tata Communications plans to spend $1 billion to $2 billion over the next 2 years building what it calls "the world's largest commercial WiMAX network."Is the WiMAX-LTE contest a zero-sum game? Not necessarily. They are both IP-based, and both use the same fundamental technology (OFDMA, or Orthogonal Frequency-Division Multiplexing Access). According to recent comments from Motorola’s Fred Wright, senior vice president for cellular networks and WiMAX, about 85% of the company’s work dedicated to WiMAX development can be reused for LTE-based equipment. In a cellular landscape of continuous network upgrades, dual-mode, tri-mode, or even quad-mode handsets are the norm. Canada-based Wavesat is already working on chipsets that promise seamless handoffs between WiMAX and LTE networks (as are other companies).
Harnessing WiMAX
Like most new media technologies, WiMAX services and hardware face the "chicken or the egg" dilemma. Neither service providers nor hardware developers want to enter a market too far in advance of the other. HTC’s dual-mode GSM/WiMAX MAX 4G handheld, the first WiMAX smartphone to enter the world market, was created to take advantage of Scartel’s Yota brand network in Moscow and St. Petersburg, Russia. Powered by Windows Mobile 6.1 and boasting a large 3.8'' touchscreen, the MAX 4G debuted in November 2008 and offers Russian WiMAX subscribers access to the Yota Video VOD catalog as well as more than 20 channels of free Yota TV. The MAX 4G can display up to nine TV channels simultaneously and includes TV-out capability, allowing users to watch streamed WiMAX content on a big screen. Following on the heels of the MAX 4G, Samsung released its WiMAX-enabled NC10 mini notebook in Russia in March 2009.
Until recently, Clearwire subscribers had to choose between a dual-mode CDMA/WiMAX modem ($5-per-month lease) and a Windows-only WiMAX PC card ($50). The company is looking for new WiMAX-ready devices to spur adoption and justify the expansion of its U.S. network. As of press time, the company was testing the HTC MAX 4G in its Portland, Ore., labs with an eye toward the release of a U.S. version. Meanwhile, Samsung is about to launch its WiMAX-ready SWD-M100 Mondi MID into the U.S. market. The Mondi boasts a 4.3'' touchscreen, a 3 megapixel main camera, and a 0.3 megapixel front camera (for video chat) and is expected to support WiMAX, Wi-Fi, and HSPA, as well as Bluetooth connectivity. The Mondi also includes a microSD card slot as well as TV-out capability and will run the Opera browser with either Windows Mobile 6.1 or 6.5.