The battle of the 4G standards has been waging for some time but all of a sudden, the prospects for WiMAX’s viability, compared to those of LTE’s, look wobbly. Recent indicators have fueled fears that operators who have invested in WiMAX may have chosen the Betmax of 4G standards.
New Infonetics Research data shows that the equipment and device market for WiMAX contracted in the first quarter. That report came out just as the nonprofit WiMAX Forum closed its head office in Portland, Ore., and relocated a few employees to San Diego. Meanwhile, at least two operators that had signed on to use the WiMAX wireless broadband standard are considering LTE instead.
In the three months ended March 31, revenue associated with WiMAX equipment and devices fell 2 percent to $303 million, according to Infonetics. Adding to the damage, TeleGeography was projecting a faster ramp-up of LTE subscribers than WiMAX users.
Surprisingly, though, experts don’t appear too worried about WiMAX. Richard Webb, Infonetics’ directing analyst for WiMAX, said in a prepared statement that he expects “generally healthy growth” through the rest of 2010. And the defections of major operators like Russian carrier Yota have not changed Webb’s view. Yota is just one WiMAX provider out of about 600. “It is not yet certain whether this is the thin end of a wedge for WiMAX,” said Webb.
Despite the WiMAX Forum’s struggles, the organization’s Open Retail Initiative is pushing WiMAX 2.0 adoption. That standard is meant to support data rates of more than 300mbps and contains backwards-compatibility with older versions of WiMAX. All of that should help ensure a technology roadmap and device ecosystem to support the WiMAX market in the long-term.
Still, the quiet closing of the WiMAX Forum’s headquarters in Portland in early June startled industry watchers. Only Chairman Ron Resnick – who is employed by Intel Corp., a big WiMAX-backer – and one other person are said to still be working in the City of Roses for the WiMAX Forum. Everyone else either lost their jobs or relocated to the association's San Diego facilities. The reorganization has lost about 100 members in recent months. But Resnick remained upbeat in a June interview with PC World, insisting that WiMAX continues to be the 4G standard of choice in developing markets such as India and Indonesia. Operators in those regions see WiMAX networks as cheaper to build than LTE, and Russia, the Middle East, Africa, Japan, Pakistan and India are seen as growth engines for the technology.
And, while some carriers who had committed to WiMAX are changing their minds, WiMAX is hardly going the way of eight-track tapes. That’s because, as multiple panelists pointed out earlier this year at the CTIA conference, WiMAX and LTE could eventually be “harmonized” – in other words, companies such as Sprint Nextel Corp. and Clearwire Corp. might offer WiMAX and LTE together. Clearwire, which provisions Sprint's WiMAX network, did not immediately return a request for comment.
Many mobile operators who have backed WiMAX probably will migrate to LTE. But, having a so-called "offload" network based on WiMAX or Wi-Fi is becoming more valuable as a component of a long-term mobile broadband plan. TeleGeography analyst Peter Bell concurred in a February research note. Both LTE and WiMAX have roles to play and both technologies “will be with us for years to come,” Bell said.
