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Why LTE Vs. WiMax Isn’t Your Typical Standards Battle

For businesses, the wireless technologies may end up serving different purposes.
THE PRICING QUESTION

WiMax providers could strike quickly with pricing. Clearwire has said it will offer no-contract plans and plans that combine base-station and mobile access under one bill--potentially attractive lures, especially in a down economy when consolidation of services is an easy way to lower budgets. One plan offered by Xohm in Baltimore lets users pick any two devices--a home base station and a PC card, or two PC cards--and both can connect for $65 a month. However, Xohm doesn't offer any special plans for businesses.

Cell data plans can cost $60 per month with a two-year contract and restrictions that limit how much data can be used a month, and usually prohibit certain applications, sometimes including voice over IP. Plans for the iPhone 3G, which requires a two-year contract, range from $70 to $129 a month. AT&T's enterprise connectivity for linking to Microsoft Exchange e-mail systems costs around $45 per month.

To perhaps bolster its hand while it waits for LTE to arrive, AT&T in November said it would purchase Wi-Fi hotspot provider Wayport for $275 million, adding almost 20,000 locations where its customers could find faster download speeds. Since most mobile devices these days have Wi-Fi (including many smartphones, like the iPhone), increasing Wi-Fi availability may help AT&T hedge its wireless-data bet against WiMax.

WiMax's advantage for business users is the simplicity and speed of establishing services. Towerstream, which already offers "fixed" WiMax as a T1 alternative for businesses in Boston, Chicago, Los Angeles, and New York, promotes both its lower costs and faster speeds ($999 per month for an 8-Mbps connection) as well as the speed of deployment, especially when compared with T1 lines being provisioned by a major telco. With almost $3 million in revenue for its most-recent financial quarter, Towerstream shows that WiMax does have the ability to compete head-on with fixed broadband services.

In the end, 4G may be less about businesses picking a winner in the race and more about picking which path to go down. Each choice will appeal to different users for different purposes. Wireless infrastructure gear suppliers such as Motorola already have noted that the similarity between the two technologies allows for wide reuse of base components when building WiMax and LTE devices.

For business customers, the good news is that WiMax looks like it will be a viable path, and more competition generally means lower prices and more innovation. Those are always welcome when determining communications strategies and budgets.

Paul Kapustka is editor and founder of Sidecut Reports, a research firm that produces long-form reports on telecommunications and public policy issues. Write to us at [email protected].

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Clearwire CEO: ‘No Doubts’ About Betting On WiMax?