WiMAX

Sprint & WiMAX partners to invest more in technology development

Sprint and others in the WiMAX partnership have agreed to contribute more money to the 4G wireless technology despite the view by some that WiMAX is the poor stepchild of 4G and that LTE is the anointed. The problem is that they have fallen into a nomenclature trap. 4G technologies are alike in that they’re the generation after 3G, but WiMAX and LTE are in different families, and in truth are not likely to be very competitive.

WiMAX is aimed at migratory users who operate from a small number of fixed locations in some random sequence—hence our name for the group and the behavior. LTE is a successor to 3G mobile service, largely aimed at a mobile or at least a regularly moving population. The preferred LTE instrument is the smartphone; for WiMAX, it’s the tablet or the netbook.

We think Sprint and its allies are on to something here. Wireless behavior is constrained by its device support, and little devices are not great vehicles with which to view content or even web pages. Yes, there will be many iPhone and Android lovers who will use their mobile devices from fixed locations, but we think a large number of users will adopt a larger device designed for sedentary applications in cafes and other locations.

There’s still plenty of time (and ways) to mess this up, but we think Sprint could redeem its position with WiMAX. In fact, it’s the only way it can do that. Sprint is cutting its workforce, which hardly speaks favorably about its prospects with normal cellular services.

Comcast launches multi-modal WiMax service in Oregon

Comcast has launched a WiMax multi-modal service in Portland, Ore., that lets customers use either Clearwire WiMAX or Comcast cable for Internet access at one fixed charge. An additional plan offers access to Sprint’s national 3G network.

The plan is aimed at the RBOCs’ success with smartphones in promoting their own data plans for wireless, creating a useful bundle for consumers. RBOCs are also expected to launch femtocell-based services that would directly integrate wireless and wireline. Comcast says it will follow up with similar services in other Clearwire WiMax cities.

WiFi use validates WiMAX for “migratory users”?

AT&T has reported an enormous surge in WiFi hotspot use, triple the normal amount, in the first quarter 2009. The increase, in our view, is an indication that “migratory” user behavior is becoming more a factor in Internet use.

We define migratory users as those who regularly use a portable device to access the Internet from some number of predictable locations—like hotspots. The migratory user market is the big opportunity for WiMAX, which is ironically a technology being promoted by AT&T’s competitor Sprint/Clearwire. The AT&T experience shows that WiFi might well be an opportunity killer for WiMAX if hotspot growth expands, however. The big question is whether migratory behavior would involve enough different locations that WiFi hotspot deployment would become impractical.

Clearwire to deploy “developer sandbox”

Clearwire is going to deploy a WiMAX “sandbox” network in Silicon Valley, supported in part by Google, Intel, and Cisco. Each of the backers has its own motives here, of course, but we think there is a common desire to see as many broadband conduits to the user as possible and as many new applications for wireless as possible.

All of the players would also likely want a solid “migratory user” market to develop, and the final issue is that WiMAX might force faster LTE rollouts by AT&T and Verizon. It’s the classical “arms-race” mindset. The good news is that it suggests that everyone believes in a consumer recovery by the end of the year. The new network will be primarily for developers and will be offered at no cost.

WiMax needs “lifestyle” purpose to make it

At WiMAX World, panelists sparred with attendees over questions of when WiMAX would become more than another access technology, and this is what we believe the major question is for WiMAX.

If the technology is simply another way to get on the Internet from a phone or PC, it is threatened by competitive notions (3G/LTE, WiFi hotspots) that will attack segments of its potential market.

If the technology is aimed at a lifestyle built around portable devices big enough to entertain but small enough to carry to a café, or to put into a vehicle, it may be a different story.

Intel and others who have encouraged, if not blindly promoted, WiMAX will now have to step up and make this new model of behavior viable, or WiMAX will have little chance.

ITU approves 4G technical requirements

The ITU has approved its technical requirements document for 4G services and will be ready to consider technology applications this fall. This will certainly kick up the noise level in the WiMAX versus LTE battle, but the truth is that the issue may be less relevant because of the continued failure of the mobile operators to find a strong business case for non-voice services other than Internet access.

Cellular services at 100 Mbps may be technically feasible under either of the standards sets, but there is no way that Internet mobile access could sustain the investment given the price resistance of the users.

There are clearly major steps needed here, and the ITU and other standards bodies are not focusing on any feasible approach, in part because the business side of the process is out of their scope. We believe that the operators themselves have been struggling with what to do next, and they are becoming a bit more direct in their criticism of equipment vendors’ lack of help in this area.

SK Telecom sniffs around Sprint

The low dollar may be contributing to interest in Sprint by SK Telecom, though many international operators have eyed acquisition as a means of entering the US market.

There isn’t much commentary on the deal, but we are hearing the SK Telecom may be betting that the WiMAX position in the US will be worth more than investors currently believe it will, and that the value of Sprint will therefore be higher.

There is no assurance that regulators would buy such a deal, even if Sprint were to agree. However, if the deal is even attempted it would likely show that Sprint’s board is concerned about the company’s future. Sprint continues to be dependent, in our view, on getting a lot of non-traditional devices onto WiMAX, and it is not likely that much progress can be made in this area until 2009, even with the backing of Intel.

WiMAX consortium getting serious

WiMAX companies are proposing a patent pool to create a stable and reasonable royalty picture for the technology, hopefully stemming any loss of interest due to perceived risk in patent payments to third parties. Intel, Cisco, Sprint, Clearwire and Alcatel-Lucent are all involved. WiMAX, a new service framework likely dependent on wide acceptance by portable device vendors, poses greater risk than something like 3G, whose market is already established. The move is seen as a way to encourage participation by equipment vendors. This shows that the Clearwire WiMAX consortium formed here earlier is likely serious about trying to make WiMAX work.

Sprint/ClearWire WiMAX move to shake industry

ClearWire and Sprint have finally married, apparently, brokered by Comcast, Google and Intel. The move is said to be preparing to shake up wireless carriers, but the most significant impact will be to expand the notion of a hot spot into something with metro or even national scope. As we have said continually, WiMAX is portable user technology not mobile technology, and thus will have its greatest impact where 3G is used for laptop connect. We expect to see pricing for wireless laptop plans fall, but all wireless including WiMAX has a significant limit in total bandwidth per cell, and this will result in sub-par performance relative to wireline broadband connections.

Intel’s non-voice mobile devices to jumpstart WiMAX?

In what may well be a key announcement for the industry, Intel revealed that it had 25 partners working with it on portable Internet devices, or “mobile Internet devices” (MIDs) in the new-speak. These boxes will be designed for use while away from home or work but not mobile as the driver of a vehicle, and are larger than a cellphone but smaller than even the smallest laptops. Intel and others believe that the future of wireless non-voice services will lie in these devices, whose screens are large enough to deliver a credible viewing experience. Intel hopes these will jumpstart the WiMAX market, a key market sector for Intel and also one that has seen recent rumors of partnerships involving Intel, Sprint, Clearwire and Comcast.