Speculation about the death of WiMAX is a little bit like speculation about when Verizon Wireless will get the iPhone: persistent. This time around, the industry is buzzing with speculation that TD-LTE, a version of LTE that works on unpaired spectrum bands typically used for WiMAX, has the potential to wipe out WiMAX once and for all.
After all, TD-LTE already has secured high-profile deployment commitments from China Mobile, Qualcomm and Russia’s Yota. Analyst firms including WiseHarbor Research, Strategy Analytics, Maravedis and ABI Research all characterize TD-LTE as a threat to WiMAX. Clearly, global domination in all unpaired spectrum bands is next.
WiMAX networks already have been deployed across the world and the technology is poised to make major inroads into India, a key growth market. TD-LTE has promise, but faces a long road to gain a foothold next to incumbent 4G technologies.
Michael Thelander, founder and CEO of Signals Research, sees TD-LTE as WiMAX’s first real competition in the 4G space. His argument is this: Despite the rhetoric about LTE versus WiMAX, the technologies never really competed with each other because they used different types of spectrum. No matter what an operator wanted, if they had unpaired spectrum, they had to go with WiMAX. TD-LTE allows operators to make a choice between two different fourth-generation wireless technologies.
“Going forward, I think WiMAX will be challenged to grow,” Thelander says. “China Mobile alone has more base stations on the ground than WiMAX does on a global basis and about the same number of subscribers… There’s an argument to be made that the TD-LTE market will be bigger than WiMAX by the end of 2012.” China Mobile has more than 500 million wireless subscribers.
In a report titled “Mobile Broadband Devices Forecast to 2020 Predicts Demise of WiMAX With Rise of TD-LTE in Unpaired Spectrum,” WiseHarbor research predicts that the introduction of TD-LTE will precipitate the demise of WiMAX, whose sales will peak in 2015.
“Commitment to TD-LTE by China Mobile in particular and significant commonalities between LTE technologies and manufactured products with TDD and FDD modes will marginalize WiMAX in the marketplace over the next few years,” writes WiseHarbor, which was founded by former Yankee Group lead researcher Keith Mallinson.
Similarly grim sentiments about the long-term survival of WiMAX were issued by 4G-specific research firm Maravedis, which stated in a recent report that although TD-LTE doesn’t have much of a near-term ecosystem, “carriers are worried about the perceived lack of commitment towards [WiMAX standard] 802.16m,” the next update for the WiMAX standard.
The success of TD-LTE is by no means certain, however. Vendors including Motorola, Ericsson and WiMAX-stalwart Alvarion all support the standard, but it’s still estimated to be between six and nine months behind LTE, which is still some ways behind WiMAX in terms of deployments. Operators with unpaired spectrum in a rush to deploy networks will likely stick with WiMAX instead of waiting months or even years to deploy TD-LTE.
As ABI Research analyst Bhavya Khanna said in a recent report: “Don’t expect WiMAX to bow out just yet.” TD-LTE will have to prove itself with some high-profile deployments before WiMAX operators will migrate to the LTE standard.
So far, Russia’s Yota said in May it would use TD-LTE instead of WiMAX when expanding its 4G network and will overlay its existing WiMAX networks in Moscow and St. Petersburg with TD-LTE next year. China Mobile is reported to begin field tests as early as next year and Qualcomm is eager to introduce the technology into the Indian market. It appears Reliance Industries may follow Qualcomm’s lead.
Whether these deployments are enough to convince operators with unpaired spectrum to wait for TD-LTE to mature remains to be seen. The WiMAX Forum says WiMAX is on track to cover more than 800 million people by the end of the year, a figure that will hit 1 billion in 2011. The maturity of the WiMAX ecosystem, which includes economies of scale and a variety of devices, is a compelling reason for operators with unpaired spectrum to use the technology.
The Incumbent Advantage
Declan Byrne, marketing director for the WiMAX Forum, characterizes the buzz around LTE and its TDD relative as “classic technology hype.”
“Service providers that have unpaired spectrum have a choice to make, today. Do they want to deploy available WiMAX equipment or do they want to wait?” he says, pointing out that TD-LTE devices and equipment aren’t widely available and might not be for years. “Operators who want to go that route can wait and do a lot of trialing and technology testing, or they can chose WiMAX and get into business.”
WiMAX backers are counting on this head-start advantage to get the technology entrenched in India, which recently auctioned off its BWA spectrum in the 2.3 GHz band. However, Reliance Industries, which owns nationwide BWA spectrum thanks to its purchase of Infotel, appears to favor TD-LTE and Qualcomm has made it clear it intends to give LTE a presence in the Indian market.
Some have even speculated that Indian operators that choose WiMAX for near-term deployments could later switch to TD-LTE, a complex maneuver that would require operators to either overlay two different networks or replace devices.
Fred Gabbard, vice president of product management for Motorola Networks, says that TD-LTE will be the better choice at some point for operators with unpaired spectrum but says “by no means” is it an obvious choice to swap technologies.
For one thing, it costs money. Motorola estimates that operators that switch from one technology to another can retain between 70 percent and 80 percent of their initial capital investment since the largest cost of a network deployment is in towers and backhaul, but it’s still a costly proposition. It’s not, despite claims to the contrary, quite as simple as a mere software upgrade.
It also presents difficulties with devices. Operators can overlay their existing WiMAX footprint with TD-LTE to avoid having to replace devices, but legacy WiMAX-only devices won’t be able to roam on parts of their network that are only TD-LTE, a situation about to be faced by Yota’s subscribers in Russia.
The complexities of switching from WiMAX to LTE are being pondered by Sprint and Clearwire. Speculation that the United States’ dominant WiMAX operator would move to LTE was renewed this week when Sprint CEO Dan Hesse told The Financial Times that the company had enough spectrum to run both LTE and WiMAX.
Sprint and Clearwire currently maintain that they don’t favor one technology over the other, and they’re not ruling out a move to TD-LTE down the road. What that possible deployment could look like remains murky, but Sprint is seeking network equipment bids from both WiMAX and LTE vendors.
There are a lot of reasons for operators to continue with WiMAX. It’s available now, works on unpaired spectrum and has major growth potential in India. There are also reasons an operator may want to choose TD-LTE. It may be in the early stages of development, but has backing from China Mobile’s half billion subscribers and is interoperable with FDD-LTE, which is being deployed by major operators like Verizon Wireless and AT&T.
Very little has happened on the ground so far. As Thelander points out, until this point, LTE wasn’t really a viable competitor for operators with unpaired spectrum, since the variety of LTE on the market at the time ran on paired frequencies. However, it’s unclear how serious of a threat TD-LTE is to WiMAX, especially given the complexities of switching from one technology to another.
ABI’s Khanna isn’t ready to close the book on WiMAX just yet. For some operators, it will make sense to stick with WiMAX. Others will deploy WiMAX and transition to TD-LTE later on, while still others will simply wait for TD-LTE to mature before deploying. As Khanna puts it: “Reports of either side trouncing the other are, in my opinion, exaggerated.”