jueves, 22 de julio de 2010

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.

ABI predicts that there will be at best 34 million LTE users at the end of 2011, with perhaps twice as many WiMax users. And Adlane Fellah, an analyst at telecommunications research firm Maravedis Inc., even speculated that carriers who intend to deploy LTE in a few years might turn to WiMax in the short term to take pressure off their 3G networks.

Although LTE is lagging behind WiMax today and will likely do so for the next few years, it's far from certain that WiMax will win this fight in the long run. "To LTE's credit, WiMax's head start has lessened, and LTE has the support of most major mobile operators," said Daryl Schoolar, principal analyst for wireless infrastructure at research firm Current Analysis Inc., in an e-mail exchange.

"WiMax, on the other hand, has in most cases been the technology of choice for new market entrants -- Tier 2 and Tier 3 operators," Schoolar continued. "This gives LTE the advantage, as its operators often have deeper pockets and established relationships with the end user. Both attributes are needed to get a new network up and running."
Unless WiMax deployment rates speed up, LTE will become the dominant 4G data network by 2015, predicts ABI Research principal analyst Phillip Solis. Farpoint Group's Mathias concurs. "LTE will have the footprint, services, and carrier and vendor support to make almost everyone happy, especially when coupled with Wi-Fi, which it will often be," he said. "WiMax isn't going away, but its opportunities for growth will be severely limited, and I don't think that there's much that can be done about that either from a business or a technology perspective."

Looking ahead

Stanforth sees a role for WiMax as a public service, recalling the failure of many municipal Wi-Fi efforts, such as those in San Francisco, Chicago, St. Louis and Springfield, Ill., and speculating that WiMax might be better suited to the task. "Muni Wi-Fi flopped primarily because of both the lousy coverage of Wi-Fi and the cost to even get that -- it took 60-plus Wi-Fi [access points] per square mile to implement using a typical mesh architecture, whereas a single WiMax AP will probably cover well over a square mile. The economics of 'Muni WiMax' might make sense," he said.

Lori Sylvia, executive vice president of marketing atRed Bend Software Inc., which makes WiMax device-management software, thinks WiMax service delivery and infrastructure costs will need to decrease in order for WiMax to compete with DSL and cable. When all providers, no matter what technology they use, can provide multiple Mbit/sec. speeds, "then the buying criteria becomes like any other Internet service: coverage and cost," Sylvia said via e-mail.

Brough Turner, an independent wireless analyst and blogger, isn't optimistic. In an e-mail, Turner wrote, "The problem is WiMax products can never achieve the volumes associated with the GSM family of technologies (GSM, UMTS, HSPA, LTE). As a result, WiMax will always cost more to deploy, and WiMax handsets will be more expensive than comparable GSM family handsets. It doesn't matter if WiMax is 'better' than LTE or not, or that WiMax is ahead today. The installed base of GSM family technologies generates very high volumes for GSM family products. As those products migrate to LTE, LTE product volumes will drive costs well below WiMax costs."

It's not necessarily an either/or proposition, however. "In my opinion, LTE and WiMax will co-exist, as they are actually targeting different markets," said Schoolar of Current Analysis. "LTE for the most part is an extension of the current mobile ecosystem. It will primarily be used to do what we are doing today with 3G, but better. WiMax's primary market, however, will be more about fixed and portable services. As much as I hate to say it, WiMax really will be Wi-Fi on steroids. While WiMax's head start over LTE has diminished, I don't think it matters as much as people think, as the two technologies are running a separate race."

José Galviz 17.206.921