WiMAX vs. LTE vs Global Economy

There's a strong temptation to suggest that WiMAX has just sneaked out of the gate, before the winds of recession slam it shut. And that LTE is still cooped up, and will have to wait a bit longer for its chance to shine.

Certainly, there have been some fairly encouraging signs recently for the Mobile WiMAX camp - the Baltimore launch of Sprint's Xohm seems to be being viewed fairly positively. There's a decent stream of devices - dongles, PCs, even a rumoured HTC smartphone. And although the focus is on the US, other markets like Russia, Taiwan, India and obviously Korea also seem to be pretty WiMAX-friendly at the moment.

And despite some rhetoric about "LTE in 2009", all the signs I'm seeing suggest that most operators other than DoCoMo and Verizon are pushing it out to the right. In much of Europe, some of the most likely chunks of spectrum for LTE are mired in legal disputes or at least delayed until 2009 /2010. Not many people expected to see much commercially-used LTE in Europe before 2012 - even before the current economic fears.

Yes, there's a mad scramble by some of the network vendors to get test and early commercial gear out. But there seems to be some skepticism about whether LTE will actually improve capacity that much over HSPA. Yes, theoretical peak speeds will rise, but unless it's deployed in 10MHz or 20MHz chunks, it's not clear that total aggregate throughput will rise much.

So does WiMAX have the race sewn up then?

Actually in my view, it's still far from clear.

Firstly, the elephant in the room is HSPA - it works, its deployed, it's useable, there's lots of devices, we're a long way down the pricing curve. Yes, there's a risk it'll get congested in some locations if operators' capex doesn't extend to improved backhaul, but for now, it sets the bar. Sure, in some circumstances (eg Baltimore) WiMAX alternatives might be a little faster / cheaper right now.... but given the current pricing trends for HSPA data I don't think there's any significant gap in properly-competitive markets.

But the real issue to me is the economy, and its effect on companies - both on the infrastructure and operator sides. I haven't got a Bloomberg terminal to pull hard data from, but some of the key WiMAX advocates - Sprint, Motorola and co - must be viewed as financially weaker than LTE peers like Verizon Wireless or Ericsson. As I'm writing this, I'm hearing reports that today's stockmarket horror story concerns Korean banks - which have complex cross-holdings throughout its industrial & telecom sector. I don't know how the recession might hit the Russian, Indian or Taiwanese economies, but those will clearly be critical factors too. And as for the idea of new entrants borrowing large sums of money (or raising equity) to fund spectrum purchase and build out competing networks......

WiMAX is also still generally consigned to high frequency bands - 2.3GHz, 2.5GHz, 3.5GHz - which, even where they are available, require dense and expensive networks, consume lots of power on both network and device sides, and which have poor indoor penetration.

Bottom line? My take at the moment is:

- LTE gets delayed by recession. Come back in 2013 for massmarket volumes.
- WiMAX is up and running, but remains too patchy to get true scale globally.
- HSPA keeps growing but also faces slow-downs in terms of upgrades.

And all of this is overlaid on a set of macroeconomic and geopolitical unknowns - how will the cards fall when everything settles down? Maybe we'll be looking at Dubai and Qatar as guidelines which future technlogy will win. Maybe all the weaker telcos will be owned by Chinese sovereign wealth funds & we'll be rolling out TD-SCDMA.....

Maybe I'm just getting caught up in the frenzied speculation about the downturn. But I have to say, I'm not expecting to have any sort of 4G phone any time soon.