Mobile WiMax vs. 3G: Will faster and cheaper win?

Enormous stakes

The advent of mobile WiMax is far more than just a matter of introducing new technology. It has the potential to significantly alter the pecking order in the cellular industry. And, more important, it has the potential to change what people do while they're mobile.

Of the four nationwide cellular carriers in the U.S., only Sprint has enough spectrum to create a nationwide WiMax network. If its claims for mobile WiMax bear out, "it's very possible it will hurt the others' 3G service," Locke said. That's important to the competitive landscape because Sprint has been staggering recently while AT&T/Cingular and Verizon Wireless, the two largest U.S. cellular operators, have been awash in profits and rapidly gaining new subscribers.

Sprint's troubles are only one reason why it is willing to gamble on mobile WiMax. Another is that the company was ordered by the FCC to either use the enormous amount of valuable WiMax-appropriate spectrum it acquired along with Nextel in 2005 or to give it up. If it gives up the spectrum, Sprint's more powerful competitors could eventually acquire it.

"Sprint is in a very unique spectrum position," said Mike Roberts, a principal analyst at Informa Telecoms & Media, a London-based industry analyst group. "It's either use [the spectrum] or lose it."

Even skeptics like Kerton agree that Sprint's gamble is worthwhile.

"I admire Sprint's bravado," Kerton said. "It's gutsy, and if they can succeed, they'll have an unmatchable advantage."

Clearwire's intentions are not as well known. A spokesman for the company did not return calls for this story. But two things are known: Clearwire is in the process of raising even more money via an initial public offering, and it is run by Craig McCaw, a cellular pioneer who started the company that later became the original AT&T Wireless, which was acquired by Cingular several years ago.

The question, though, is whether Clearwire has enough spectrum to launch a truly nationwide network.

"I just don't think they have [enough spectrum], even with the spectrum they just acquired," Roberts said.