The nation’s dire economic straits will have significant impact on the development and rollout of 4G platforms, experts say. They suggest, however, that the changes will be focused more on timing than any fundamental shifts on the version of 4G – WiMax or Long Term Evolution (LTE) – a given network will use.

The two are at very different evolutionary stages, and LTE seems less vulnerable to the downturn. “For WiMax, this is really bad timing,” says Monica Paolini, the founder and president of Senza Fili Consulting. “For the two years before September 2008, there were a lot of operators ready to go [but] the hardware was not quite there… When the products appeared, the market had tanked. … That obviously is causing problems.”

While Paolini sees challenges for the bigger WiMax players, she agrees with West Technology Research Solutions’ Principal Analyst Kirsten West, who points out that smaller WiMax projects, such as those by being run by TowerStream in Miami and San Francisco, are rolling out according to schedule.

WiMax remains a prime candidate for greenfield deployments. It also has an ace in the hole. Cable operators Comcast, Time Warner Cable and Bright House Networks are investors in the restructured Clearwire operations. The cable industry always has lacked a robust wireless platform to move its triple-play voice, video and data services to a quad play. WiMax increasingly looks like the cable guy’s mobile play. While the recession isn’t good news, it won’t do anything to fundamentally change that game plan.

LTE Picture a Bit Fuzzier

The picture is less clear but, overall, seems a bit brighter for LTE. While moves by AT&T, Verizon and some vendors suggest that the technology is more or less on track, there are rumblings of likely delays. Even if the high-profile projects move ahead, others can quietly be put on the back burner. Barry Hill, networking equipment vendor Stoke’s vice president of marketing, estimates that LTE is being delayed two years by the slowdown. He initially expected the technology to begin showing up in the network next year and 2011; he now says that he doesn’t expected deployments until 2013 and 2014.

Not everyone shares Hill’s assessment. Since it is not yet in deployment mode, there is less of an investment to be delayed. This, proponents say, allows the technology to remain more on its natural development cycle. “A lot of people have been surprised that the interest in LTE has been pretty solid,” says Robert Syputa, an analyst for Maravedis, a consultancy. “Verizon is moving forward on their schedule and has not backtracked despite the economy. They are planning trials in the second half of the year.”

On Feb. 18, Ericsson, Alcatel-Lucent and Starent Networks were announced as primary vendors for Verizon Wireless’ LTE deployments in the United States. Verizon and Vodafone – co-owners of Verizon Wireless – have tested in Minneapolis; Columbus, Ohio; Northern New Jersey; Budapest; Dusseldorf and Madrid, according to the announcement. Trials will expand this summer and commercial services will launch next year.

Vendor announcements, while certainly good news, are not deployments. The recent GSMA Mobile World Conference in Barcelona was a study in contrasts. On one hand, GigaOm reported that the anticipated emphasis on LTE was superseded by a focus on HSPA+, a 3G technology. The platform is created through a relatively inexpensive software upgrade. Still, LTE announcements were made, including Verizon’s vendors and AT&T’s announcement that it will launch commercial services in 2011.

Bob Perez, an analyst with IMS Research, agrees that there may be a delay for LTE, but points out that the standards-setting process being conducted by the Third Generation Partnership Project (3GPP) is moving along, which of course is a good sign. He also says that the UMTS path – from HSDPA to HSUPA to HSPA+ to LTE – generally will hold true. That’s a blizzard of acronyms, but the bottom line is fairly simple: Each successive technology builds upon the one before it. Thus, carriers who follow the UMTS path are unlikely to deviate before reaching the latest high plateau, which is LTE. The question is not if, but when.

The Year of the Offload

It is an interesting dynamic – mainly because the economy is not the only issue in play. The difference of opinion on rollout schedules may have to do less with the economy – everyone agrees that it is bad and won’t significantly improve anytime soon – and more on how soon individual networks will deal with the strain of exploding data demand. This demand is being pushed by a lot of things, including flat-rate data plans.

The speed with which carriers make their move will depend on the shape of their networks now and projections of how the increases in bandwidth demand will affect them. If the capacity is likely to be there, waiting out the recession is attractive. If not, something must be done, regardless of the cratering financial picture. In any case, it is a prime cause of concern for carriers.

“People are working feverishly to make sure their networks don’t buckle,” says Keith Higgins, the vice president of worldwide marketing for equipment vendor Aricent. “I’m fairly encouraged at the state of focus and attention.”

It seems, at least according to Hill, that the real drama of the next few months won’t be LTE versus WiMax, but whether operators can stay ahead of demand with the networks that they have. Data demand, he says, “is just killing their networks,” he says. “Some of the networks are seeing 500 to 800 percent growth in traffic year over year. In the past, these guys could plan network deployments and technology based on the amount of subscribers they have. As mobile data use grows, whether through an iPhone or a dongle on a laptop, you may not get any more subscribers, but the usage by [existing] subscribers goes through the roof.”

The result, Hill says, will be that 2009 will be “the year of the offload” in which operators scramble to find ways to free up capacity on 3G or networks of an earlier vintage. The handiest way is to use emerging convergence techniques such as femtocells and Wi-Fi to transfer as much traffic as possible from cellular to wireless networks. This has the added benefit of cutting costs because wireless spectrum is free.

While most network operators have chosen their network of the future – either because of timing or because of their current network’s DNA – the slowdown is giving chip makers the opportunity to create products that can support both networks. IMS’s Perez says ZTE and Alcatel-Lucent are developing these dual-use chips. He suggests that this may be more positioning and differentiation than an effort to reset the technology landscape. However, it can be more than pure hype. “It definitely is something to keep an eye on. If bandwidth needs keep rising, it may offer a solution [that is viable] in the interim.”

The technologies likely will benefit, both from the investment and image, by the broadband stimulus package signed into law by President Obama on Feb. 17. Money will expressly be spent on the wireless part of the $7.2 billion investment in broadband. Both WiMax and LTE likely will benefit from that governmental largesse.

Insiders know that 4G technology will be deployed and, for the most part, where. The question is whether it will be the fast rollout or a slower and more incremental transition. Despite the aggressive stances of AT&T and Verizon, the poor economy suggests that operators may take their time.