WiMax in 2010: Too little, too late?

WiMax is finally making wide-area wireless broadband a reality in many cities -- but another technology is fast encroaching.

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Although most of today's WiMax rollouts are aimed at urban areas, smaller wireless ISPs are bringing WiMax to areas where there is demand for broadband but not much in the way of a wired infrastructure to deliver the high-speed Internet goods. For example, DigitalBridge Communications Corp., a rural WiMax operator based in Ashburn, Va., and Open Range Communications Inc. in Greenwood Village, Colo., are using funds from the $7.2 billion rural broadband stimulus program to build rural WiMax infrastructures in their service areas.

But mass WiMax deployments are still not moving quickly. "AT&T has had some difficulty with deployments in Anchorage and Juneau, and we all have heard about Clearwire's Portland, Oregon, deployment," which took almost a year longer than the company had first predicted, observed Matanuska Wireless owner Jones.

"I think the learning curve is what has been slowing down the growth nationwide," Jones said. "As more and more networks are being deployed, the manufacturers are listening to feedback coming in from the field, making the necessary adjustments and releasing new products." Jones said he expects to see more visible progress next year. "As standards are locked in and equipment is fine-tuned, look for deployments to grow both in size and location."

Clearwire declined to speak on the record about why its WiMax rollout has gone so slowly or why it expects deployment to speed up now. But Farpoint Group's Mathias sees funding as a problem for Clearwire's WiMax deployment moving forward. "There's an issue relating to how much additional money Clearwire will need to raise to do the real nationwide buildout needed to get to the critical mass that appeals to business users," he said.

The LTE threat

While WiMax has been slowly ramping up, LTE has been playing catch-up. Long-Term Evolution, like WiMax, is a 4G wireless data transfer technology that promises similar ranges and performance. Unlike WiMax, which is based on an IEEE standard, LTE is driven by a loose collection of telecommunications companies that support the existing Global System for Mobile communications (GSM) standard.

GSM vendors control approximately 80% of the worldwide mobile market today, according to ABI Research. These carriers see LTE, an outgrowth of GSM that is designed to be backward-compatible with it, as the obvious next step for their networks. "It's the logical upgrade path for both GSM and UMTS (Universal Mobile Telecommunications System), and for broadband data services like HSPA (High Speed Packet Access)," said Mathias. Even Verizon Wireless, a CDMA (Code Division Multiple Access) carrier, is lining up behind LTE, he noted.

"The cellular carriers are on an evolutionary path to LTE, [but] it is difficult to figure out when LTE will be a significant competitor and have material impact on WiMax adoption," Peter Stanforth, chief technology officer and co-founder of Spectrum Bridge Inc., an online market for wireless spectrum, said in an e-mail. While WiMax is finally gaining critical mass, LTE is still taking its first steps. AT&T, for instance, expects to make LTE service commercially available in 2011. Verizon has a faster timetable, saying it plans to have networks in 25 to 30 cities in 2010.

"It is true several carriers have said that they are going to start the LTE rollout soon, but when will it have enough coverage to be significant?" Stanforth asked. "If it's just a few base stations in a few major cities in order to say 'We have deployed LTE,' will consumers know or care?"

In an ABI research report from the second quarter of 2009, senior analyst Nadine Manjaro wrote, "Vendors will only begin shipping base station equipment in significant quantities in 2010, followed by full commercial launches in 2011." While "many operators have been talking about re-use of existing equipment," ABI expects that "most ... base stations will have completely new baseband and RF components, because operators will generally try to keep the new LTE networks separate from their legacy networks," she wrote.

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