Confusion and Skepticism May Impede 4G Adoption
With so many potential 4G customers expressing concerns about cost and performance providers may be in for some disappointment.
While it's been apparent for a long time that Long Term Evolution (LTE) is overtaking WiMax as the 4G technology of choice for a majority of worldwide operators, an end game of sorts was reached this week. Clearwire - the biggest success story for WiMax to date - officially said that it will supplement its 4G service with LTE. Details of the plan, which will cost about $600,000 and be used in the carrier's more active cities, are well presented at ConnectedPlanet.
It has long been known that Clearwire, which markets its network under the Clear banner, was on the road to LTE. It ran a test of the technology in Phoenix last year, and its executives were fairly open about the plans.
This is not surprising from technology and business points of view. LTE and WiMax are the human and chimpanzee of telecom: They are different, but share much of the same DNA. From the business perspective, the economies of scale in the creation of network gear and end-user devices favor a unified approach and, since Verizon and AT&T are on the LTE bandwagon, WiMax is the logical technology to be thrown off the lifeboat.
As you'd likely expect, the company closed with a restatement of its support to the existing WiMAX network, but it's practically a guarantee that you've seen the last expansion effort on that one. In case you've been looking the other way, Clearwire hasn't produced plans for a new WiMAX market in all of 2011. Now you know why.
The other moving parts in this drama - anything involving billions of dollars is by definition a drama - are LightSquared and Sprint. LightSquared is a big project that aims to lease LTE capacity on a wholesale basis. The only fly in the ointment is that the government - in the form of the Federal Aviation Administration and the Federal Communications Commission - may not let it due to fears that it could crash the Global Positioning System.
Sprint is an omnipotent presence in the U.S. 4G landscape. It is an investor in Clearwire and is marketing it to businesses, and last week signed a 15-year deal with LightSquared, provided the FCC gives that network the go-ahead.
There is no doubt that WiMax is well on its way to being secondary status in the 4G world. Whether it is being marginalized and crowded out or is assuming a natural niche status is an important distinction for potential network customers to make. Marginalization suggests eventual extinction - and the disappearance of the support ecosystem - while niches can thrive.