The race to become the United States' next-generation wireless broadband technology officially began this year. On Sept. 29, to be precise, in Baltimore.
That's when the city became the first big-league deployment of mobile WiMax in the country. Sprint Nextel's Xohm brand provides the WiMax alternative to the cellular-based services hawked by the country's largest wireless providers--services that today fall well short of the speed and capacity that will define wireless broadband in just a few years.
Since both Verizon Wireless and AT&T have publicly shunned WiMax in favor of a cellular technology called Long Term Evolution, or LTE, the competitive clash is set as these fourth-generation offerings come to market. Their emergence, which once seemed safely several years off, is now around the corner. And with mobility at the center of change in business computing, CIOs should equip themselves with a clear sense of the rivalry that lies ahead between LTE and WiMax.
Unlike other VHS/Betamax-type standards battles, the one for wireless data supremacy in the United States might not be a zero-sum game, given the widely divergent technology qualities, regional spectrum positions, and go-to-market plans of the various providers. Still, everyone loves a horse race. Ben Wolff, the CEO of Clearwire, which joined with Sprint to build a nationwide WiMax network, says the which-is-better debate about WiMax vs. LTE "is the No. 1 question" he gets from investors, analysts, and the business press. Meanwhile, AT&T and Verizon treat LTE's victory as inevitable; a top AT&T technologist described WiMax at a recent telecom conference as destined to be a "niche" technology.
What speeds? Sprint's service is promising average download/upload of 4 Mbps/2 Mbps, though theoretical download speeds for WiMax range up to 40 Mbps for fixed implementations and 15 Mbps for mobile versions. Most literature discussing LTE predicts 100 Mbps/50 Mbps download/upload speeds, but it's only speculation. Speaking at a WiMax trade show in October, AT&T VP of architecture Hank Kafka promised only that "LTE is going to be fast" and will deliver "more data per bandwidth" than existing technologies.
AT&T is planning a souped-up version of its 3G data technology in 2009, but it's deliberately hazy about when it will deploy LTE. Asked directly, Kafka said, "It's not that far away. ... I'd be surprised if it isn't out in five years."
Verizon, which like AT&T intends to use LTE in the 700-MHz spectrum it purchased in the recent FCC auctions, seems in a bigger hurry. In early December, CTO Dick Lynch said Verizon expects LTE to "actually be in service somewhere here in the U.S." before the end of 2009. Previously, Verizon had said that its LTE rollout probably wouldn't start in earnest until 2010 or 2011, which is still a more-likely timeframe for wide availability of commercial services. So Verizon will need 3G for the coming years to compete with WiMax.
Nevertheless, AT&T's Kafka shows no doubts about which 4G technology would eventually gain the widest acceptance by users and providers. "Make no mistake, LTE will be the mobile broadband choice here in the U.S. and around the world," Kafka said. "We see mobile WiMax remaining as a niche technology."
WHAT WIMAX CAN DELIVER
Given its current deployments, WiMax is in fact a niche today. But following the Nov. 28 completion of the merger of Sprint's WiMax assets with those of Clearwire, the "New Clearwire" should be ready to run faster and launch in more markets in 2009, with access to the $3.2 billion in investment capital from Comcast, Google, Intel, Time Warner Cable, and other investors in the Clearwire-Sprint deal.
This month, Clearwire was already taking customer sign-ups for its mobile WiMax services in Portland, Ore., with a full "commercial" launch scheduled for early 2009, under a new brand, Clear, that unites the two companies' WiMax operations and replaces Sprint's Xohm brand. Sprint previously had said WiMax networks in Chicago and Washington, D.C., would be online before the end of 2008, but Clearwire has yet to set firm launch dates. Nonetheless, the Chicago and D.C. networks, which have been detected and used by some WiMax-savvy bloggers and reporters, should be ready to launch sometime in the coming year. Following close behind are buildouts in Boston; Philadelphia; Dallas/Fort Worth; Providence, R.I.; Las Vegas; and Atlanta.
Add in the growing rural WiMax operations of providers such as DigitalBridge Communications, and it's clear that the WiMax "niche" should actually be available to a good number of users by the end of 2009. None of the WiMax services has a national-roaming component, but there are still attributes that might make WiMax an attractive choice for companies in metro areas where it's offered, especially those with demanding connectivity requirements for mobility around a campus, town, or regional area. That also speaks to a potential long-term appeal: helping companies equip their "local nomads."
SERVICE FOR NOMADS
In the world of cell phone services, most U.S. cellular customers now expect roaming that lets them use their phones wherever they travel in the country. WiMax's initial appeal will be for a different kind of roaming user--the "local nomad" who wants faster-than-cellular Internet access from home to work, to lunch, to the coffee shop, or for business meetings around the city. Since most of the Internet-using market doesn't travel outside their hometown region regularly, the probable customer base for nomadic roaming services could be significantly greater than the business pros who need nationwide coverage. Think of investment advisers and insurance salespeople, real estate agents, repair staff--anyone with a local client base they meet face to face.
People are just starting to consider the value of high-speed mobile Internet, thanks in part to the explosive popularity of the Apple iPhone and iPhone 3G, says Julie Coppernoll, marketing director for WiMax at Intel, one of the standard's biggest backers. "We love the iPhone, because it gives people a taste for mobility," says Coppernoll.
Most mobile WiMax services will be accessed initially through add-in cards or dongles that connect to laptops via a PC Card port or a USB port. PC makers including Acer, Asus, and Lenovo are offering laptops with WiMax connectivity built in for the Sprint networks, and Dell, Hewlett-Packard, Sony, and Toshiba have all promised to deliver embedded WiMax laptops within the next year. Nokia is selling for the Xohm service a WiMax-enabled "tablet," a handheld device with a horizontal screen and keyboard. The Nokia tablet is among the first WiMax-enabled "mobile Internet devices"--MIDs--expected to target the mobile-professional market now dominated by devices like Research In Motion's BlackBerry.
At Intel's Developer Forum in August, several manufacturers showed prototype MIDs in several sizes between a cell phone and a laptop, some of which could also be customized or ruggedized for businesses with fleets of highly mobile users, like delivery personnel. Though no such device other than Nokia's was available in the United States this year, sneak previews of similar technologies are likely at the Consumer Electronics Show in early January. HTC brought out a combination WiMax/GSM smartphone in November for use in a WiMax network in Russia, perhaps heralding more such devices for the U.S. market this year.
With its high speeds for connectivity in both the downstream and upstream direction, WiMax offers the ability to support real-time video communications, something cellular data links can't provide with their relatively slow uplink speeds. One provider of WiMax services in rural areas, DigitalBridge Communications, says television crews in one of its markets are using WiMax connections to do live broadcasts, replacing costly satellite links. So for companies with large area campuses, or for businesses whose employees travel frequently inside a metro area, WiMax services and devices could make sense and open entirely new opportunities based on the ability to connect at broadband speeds from any point inside a covered area.
Today, the head-to-head competition is between WiMax and increasingly fast 3G networks, which aren't up to WiMax's speed but usually are fast enough for e-mail and simple Web-page access and can offer nearly nationwide coverage. The familiar scene of BlackBerrys and iPhones being clicked into action the moment a plane lands backs the major telcos' belief that a bit of broadband in as many places as possible is the killer app. At least today, for most companies, a near guarantee of e-mail trumps the need for high-bandwidth applications such as mobile video.
The current technology behind AT&T's 3G network, High Speed Packet Access, can reach peak speeds of 3.6 Mbps, Kafka said, and AT&T plans to start rolling out the "plus" version of HSPA capable of much higher speeds--in theory up to 20 Mbps. "We have a lot of runway with HSPA," Kafka said. "HSPA is mobile broadband today, and it's getting better."
AT&T hasn't made clear where HSPA-plus rollouts will occur, how dense the coverage will be, or if the performance will be guaranteed. It has 17 million 3G users, and it's rolling out more 3G sites, expecting to increase its coverage to 350 cities by the end of this year. "We'll introduce the next generation when it's ready, when it's needed," Kafka said. "HSPA will more than meet the needs [of mobile users] the next few years."
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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