Wireless War: 4G Battle Lines Have Been Drawn

by: Sam Gustin June 12, 2008 | about stocks: ALVR / CLWR / NT / S    

Sam Gustin

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The battle over so-called 4G wireless technology is heating up, with major industry players choosing sides between WiMax and LTE, or Long Term Evolution.

Nortel (NT), the Canadian telecommunications equipment manufacturer, gave LTE a boost Wednesday when the company said it would devote its main research efforts to that standard, and hand over its WiMax development to an Israeli company called Alvarion (ALVR).

"This enables Nortel to achieve faster time to market with WiMAX at a lower cost, while accelerating LTE development to meet a demand that is emerging faster than the industry originally predicted," Nortel said in a statement.

Investors were enthusiastic about Nortel's new strategy, sending the company's shares up over 13 percent in trading Wednesday.

Nortel's decision to fully embrace LTE comes one month after Sprint Nextel (S) and Clearwire (CLWR), the telecom startup founded by cell-phone pioneer Craig McCaw, announced a $12 billion joint venture to build a nationwide WiMax network offering superfast wireless service for cell phones and laptops.

The Sprint-Clearwire WiMax initiative has attracted powerful backers, including Intel (INTC), Google (GOOG), Comcast (CMCSA), and Time Warner Cable (TWC), which are collectively injecting $3.2 billion in financing into the project.

WiMax has been highly touted as the successor to WiFi, and though it is still largely unproven, its backers say that it offers speeds of up to five times faster than existing wireless networks over much greater distances.

LTE, which has garnered increasing buzz lately, has attracted formidable backers of its own, including AT&T (T) and Verizon Wireless (VZ).

With the battle lines over fourth-generation being drawn, the playing field is set for a showdown over what could be the next great technology format war.

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This article has 29 comments:

  •  
    Jun 12 08:33 AM
    WiMax is ready to go, LTE is years away. Not sure this was a great decision by Nortel.
    Reply | Link to Comment
  •  
    Jun 12 10:02 AM
    3G is not fully implemented, has been proven failure in Japan/EU as far as customer acceptance due to high prices and now we talk about 4G. In my suggestion Verizon better focus on customer service education and fixing the big holes in accounting than look for 4G.
    Reply | Link to Comment
  •  
    Jun 12 10:05 AM
    The big mobile carriers love LTE because it paves the way for continued extension of their existing business model. They fear WiMAX because it brings with it a paradigmatic shift in the way people will access wireless data.

    From where I stand, the big mobile carriers (Verizon, AT&T, T-Mobile, et al.) increasingly look like the AOLs and CompuServes of the 90's. Like their dot.com-era counterparts, the mobile carriers will die a painful death as soon as their customers get a whiff of what they really want -- open internet access. Ringtone downloads, SMS messages, My-5's and all the other "value-added"... bullshits will lose all their appeal as soon as smartphones and netbooks become network peers on the open internet.
    Reply | Link to Comment
  •  
    Jun 12 11:30 AM
    I 'm with majority above. WiMax is a real standard with real infrastructure, being deployed today. LTE is just a lovely vision. When you see big companies pushing phatoms (phantom-ware?)over real products and services something consumer-unfriendly is likely brewing in the background.

    Disclosure: I own a little Alvarion and will own a little more once my tax rebate check comes in.
    Reply | Link to Comment
  •  
    Jun 12 01:36 PM
    Alvarion has been running WiMax for some time. I find it odd that this article says WiMax is generally unproven. Unproven in the U.S. maybe but its getting to be the standard in other parts of the world because they don't have the stranglehold of unregulated telecoms. The technology is working. It's the big telecoms that are dragging their feet. Thanks go to them for keeping us in tech mediocrity.
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  •  
    Jun 12 02:44 PM
    Nextel-nice try to spruce up a "hit or miss" technology coming from a Sprextel employee. Nortel made an excellent decision to back something that will actually work
    Gunark-ALL 4G is required to be open access so your comment bashing the other carriers is unfounded
    Mike Cooper-of course you'll comment positively, being a stock holder
    Fred C-WiMax does work...but is still unproven in the sense that it has yet to be used to cover entire cities or markets.
    Reply | Link to Comment
  •  
    Jun 12 03:52 PM
    Geddy, you need to study WiMax a little deeper it is covering entire cities and in fact entire islands. It is my understanding WiMax has been or is being deploued in the UK (Metranet), Italy (NGI), Spain(Telenor), Carribbean (Digicell), angola and Kenya just to name a few countries. It has recently been chosen as the service that will be utilized in India.
    Reply | Link to Comment
  •  
    Jun 12 05:08 PM
    Not exactly the truth BaileyD. You can verify that with the major vendors of equipment that would be used (i.e.-the Motorola's, Alcatel's, etc.). It is deployed in a lot of countries but no where near the scale envisioned by Clearwire/Sprextel (feel free to post a link for all of us to see if you find different). Overseas also has a different spectrum then the allotted 2.5Ghz to be used here, which of course is a major contention of WiMax penetration coverage.
    Reply | Link to Comment
  •  
    Jun 12 07:41 PM
    Geddy, you post a lot bashing wimax. You repeat yourself over and over and over. I wonder, what exactly, makes you think that lte is going to be better than wimax? I get the feeling you are not an engineer or designer with actual knowledge on the subject. Why dont you tell us specifically and directly what exactly is *wrong* with wimax.
    Reply | Link to Comment
  •  
    Jun 12 07:42 PM
    Maybe Geddy is Canadian, ay?
    Reply | Link to Comment
  •  
    Jun 12 07:44 PM
    Oh and 4G is not required to be open.
    Reply | Link to Comment
  •  
    Jun 12 08:32 PM
    stupid head...good fit for your posts. Take a look at the 4th bullet point (www.eogogics.com/talkg...). Since 4G standards aren't necessarily approved yet, it is on the list for 4G (open access). There is nothing "wrong" with WiMax, just that it's unproven. Yes, LTE is as well (or UMB for that matter) but I tend to "go with the masses" and believe that the other carriers are a bit smarter than Sprint, especially with them going down hill fast. No, not an engineer but very interested in what's going on. And where the heck did I repeat myself over & over???
    Reply | Link to Comment
  •  
    Jun 12 08:58 PM
    Geddy or VZtek or whoever you are, you are saying lte AND wimax are both unproven but you go with the masses. Thats ok. Sprint has been more of an innovator than any other carrier, historically speaking so I will go with wimax. I am not going to talk IEEE crap with you here because *none of this really matters. Consumers will choose the winner.
    Reply | Link to Comment
  •  
    Jun 12 10:56 PM
    Geddy, you wrote "Nextel-nice try to spruce up a "hit or miss" technology coming from a Sprextel employee. Nortel made an excellent decision to back something that will actually work ", and then you wrote "There is nothing "wrong" with WiMax, just that it's unproven. Yes, LTE is as well.."

    So, why say that Nortel is backing something that "will actually work" when LTE is as "unproven" as WiMax? What is your title at AT&T or Verizon? "Official Blogger II"? Your bias is very transparent.

    WiMax is going to beat LTE to the market by at least 2 years, and it has a good backing. If Clearwire plays it right, it can be a huge success. But, that's a big "if".
    Reply | Link to Comment
  •  
    Jun 12 11:42 PM
    Perhaps the most significant fact about WiMAX is that it IS a public standard. There is nothing "hit or miss" about it. Considering commercial enterprises will pay about one-third the cost for a broadband wireless link on WiMax as they would for a comparable wired T1, the benefits ramp up quickly. Bitch all you want people, if it gets there first, then it's off the to the races for WiMax.
    Reply | Link to Comment
  •  
    Jun 13 09:09 AM
    Yep, & Betamax was 1st to market with video players too...we all know how that played out. "First to market" doesn't mean jack when you have a horrible network, no build plan, & not enough money (those piddly billions that were thrown at Clearwire don't amount to much when building an entire network). Listen, I don't even work for a carrier but I am a disgrunted ex-Nextel customer that feels Sprint screwed that deal up so yeah, I'm a bit biased. Hump, yep you're right, I said it would work. I have a bit more confidence in it working correctly than I do WiMax (& since you're a fan of paraphrasing my words, "though both are unproven").
    Reply | Link to Comment
  •  
    Jun 13 11:02 AM
    Yep, I'm paraphrasing because you contradicted yourself. What better way to show that then quoting you?

    And, there you go again making unfounded claims of network quality and build plan. How do you know? Show us some facts. Sprint's network is completely up to par with AT&T and Verizon's. Clearwire stated the number of subscribers it hopes to have in the next few years, so how can they not have a build plan? I do agree with you in reference to capital, as neither Sprint nor Clearwire have a lot of free cash flow at the moment.

    The reality is that WiMax is in use around various parts of the world, so it's not unproven. Time to market is an advantage, as well as the various backers. It seems that WiMax is gaining momentum, and, for some reason, that's scaring you, Geddy?
    Reply | Link to Comment
  •  
    Jun 13 11:08 AM
    The key is WHY beta max failed. Yeah, Wimax is more of a gamble then lte is thats for sure!! Sprint Nextel does not have a horrible network. I am a Nextel customer and I am happy with my service, the network, and the quality I get. You should go back to nextel, its gotten even better over the last year or so. Its like I said before, none of this matters because consumers will choose a winner here. Your disgruntled rants are meaningless. You can disagree with the annalists but so far you cannot discredit them.
    Reply | Link to Comment
  •  
    Jun 13 03:23 PM
    Since both of YOU are either Sprextel or Clearwire employees I guess we'll just have to wait & see...enough of this back & forth as we'll all have different opinions.
    Humps-look at the sheer unprecedented number of defections by
    Sprint customers....enough said. Take a look at stupid head's post stating the same thing about Sprint's network; I'm not alone.
    stupid head-not sure which analyst you've seen that said WiMax is not a gamble so please forward any links you have to the contrary. I would love to go back to Nextel as a customer but their roaming was also an issue...& the fact that I hear the network has also gone to pot.
    Reply | Link to Comment
  •  
    Jun 13 03:26 PM
    BaileyD-did some research on the countries you mentioned above. Couple glaring differences...networks there are not designed for mobile use; more of a stand-alone type (similar to DSL or cable) whereas what Clearwire is proposing is for mobile use as well. In Korea it's also not WiMax but "WiBro" which is a bit different.
    Reply | Link to Comment
  •  
    Jun 13 04:03 PM
    I dont work for them. I am a Nextel user and if you re-read my post I said its gotten better in the last year. "does NOT have a horrible network" And I said that wimax is MORE of a gamble then lte. I am also long on S.
    Reply | Link to Comment
  •  
    Jun 13 05:12 PM
    Then why so hyped up on WiMax??? Good god, it's like I'm arguing against the holder of the patent with you both! In a nutshell, all I'm saying is that I think it's overrated. Clearwire (Portland) & Sprint (Chicago & DC I believe) both have markets built out since last year but have yet to launch them...smells like trouble to me. I personally will wait for LTE (& did everyone forget about UMB?) as I have a bit more trust in GOOD companies then I do with failures (i.e.-Sprint).
    Enough said...
    Reply | Link to Comment
  •  
    Jun 13 05:37 PM
    Not hyped up on wimax just pointing out your errors. I do not think Sprint is a failure or the other company's are "gooder" then sprint. Since I want to make money on my shares I will remain optimistic. Good luck to you!
    Reply | Link to Comment
  •  
    Jun 13 07:41 PM
    I disagree on the errors comment (besides the network one, which I still disagree...they're horrible) but I wish you luck as well on your stock!
    Reply | Link to Comment
  •  
    Jun 14 03:00 PM
    Geddy, WiMax is a gamble, and Wall Street has taken this into consideration. If it is successful for Clearwire and all the backers, shareholders stand to make money! That's why I'm in favor of Clearwire / Sprint, because I own stock. And, Sprint has already peformed a WiMax soft launch in the mid-atlantic and Chicago areas. Like it or not, WiMax is ready to go.

    Why are you so hyped on LTE, something that is years away from materializing?

    Sprint might have faltered under Forsee, but calling it a failure is a bit much. You are so against Sprint / Clearwire / WiMax, but I have yet to read a lucid statement supporting your opinions.
    Reply | Link to Comment
  •  
    Jun 15 09:18 AM
    It's not an argument, it's an opinion. We could go on & on about the pro's/con's of both WiMax & LTE (did we also forget about UMB?) but again, it's just an opinion. As stupid head mentions above as well, it will all be left to the consumer to decide. I also mentioned above in a previous post (being a former loyal Nextel customer for years until Sprint botched that merger up) why I am so biased against anything Sprint has to offer so that's my burden to bear. The "soft launch" you mentioned is true & I voice my concerns about that above in a previous post ("soft launch" a LONG time ago but still haven't allowed paying customers to use yet...smells like trouble). Good luck to you also on your stock!
    Reply | Link to Comment
  •  
    Jul 15 04:07 PM
    WiMAX a "paradigmatic change"?? I do not understand why people continue to wrap such language around this as if it's any different than LTE or another wireless technology. It's just another standard, it will not have any significant economy for network operators, especially since it will not be deployed in the scale of 3&4G, and its "backers" have traditionally been the losers in 3G, such as Motorola, Samsung, Nortel, and the associated chip vendors. It's not like WiFi or anything else revolutionary. Just another wireless network that will have a significant subscription fee. And at the frequencies that Sprint is deploying it at, good luck getting coverage indoors without special indoor distribution equipment that Sprint can ill afford. I have no skin in this, but let's be realistic.
    Reply | Link to Comment
  •  
    Jul 16 07:37 PM
    Keep in mind that Pakistan has the largest WiMax network, their Mobilink Inifinity prices are Rs 1200 for unlimited data and voice at 1 Mbps. (around $20 per month) and you have to buy a router. Wateen is also offering Wi-Max.
    Reply | Link to Comment
  •  
    Jul 19 08:01 PM
    And Pakistan having ANYTHING is supposed to influence me? They can't even control their own citizens & I'm to be impressed? They're lucky they're still not using smoke signals!
    Reply | Link to Comment
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