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WiMAX versus LTE - does one need to win?
In the ever evolving wireless market, the only thing that seems to change more often than the latest must-have mobile phone is the latest hot technology to provide super-fast wireless connectivity.
GSM, GPRS, UMTS, CDMA, HSDPA, Evolved Edge….you get the idea. But when it comes to 4G, which is where most people agree the wireless industry is eventually going, there are really only two technologies that are up for discussion: WiMAX and LTE (Long Term Evolution).
Recently, some have questioned Nortel’s strategy of playing in both of these 4G technologies, seeing them as competing technologies vying for the same limited service provider budgets. But are they actually competing, and does one of these two 4G technologies really need to “win” in the market?
In a recent comment on Nortel CTO John Roese’s blog, Scott Wickware, VP of Carrier Networks at Nortel, provided a nice explanation of WiMAX and LTE, the history of how each was developed, and likely future deployment scenarios for both. His view (and Nortel’s) is that WiMAX and LTE can coexist, as they have evolved to address different markets for high-speed wireless connectivity.
See below for Scott’s post. What do you think? Can WiMAX and LTE coexist in tomorrow’s 4G world, or will one’s success inevitably result in the failure of the other?
My name is Scott Wickware and I am a VP in the Carrier Networks organization. I have seen a lot of comments pertaining to WiMAX and LTE, with many people seeking a lay man’s perspective on what this means. People love to use acronyms to describe individual technologies and grouping of technologies. At Nortel, we are as guilty as any other company that throws around these acronyms; however, this doesn’t mean that everything has to be confusing. We all need to appreciate that these are very complex technologies to develop and deploy, but that what matters most is the end user experience. The house of cards falls apart if these technologies do not provide subscribers with a service they value and at a price point that they (or a third party) are prepared to pay for the service. So, here is my attempt to generalize the situation and provide a little clarity. Here we go…
Nortel broadly defines 4G (or Fourth Generation) wireless technology as set of technologies that provides: 1) a radical improvement in end user performance, 2) a radical improvement in the Total Cost of Ownership (TCO) for the operator and 3) is based on (and here comes some techno speak) a physical radio layer known as OFDM and a flat IP architecture in the core. The technologies that meet this criteria, today, are WiMAX and LTE. WiMAX is a technology that was born out of the IEEE and is often referred to as 802.16d/e, while LTE (or Long Term Evolution) is a technology that was born out of 3GPP and 3GPP2 (ie the people that brought you UMTS, CDMA 1x EV-DO, etc… and generally GSM and CDMA before that). In other words, WiMAX was started by people that typically design the data standards, while LTE come from the people that define mobile (or cellular) technologies.
So what does all this mean? Well, essentially, these two technologies are complimentary and address (at least initially) two very different market segments. WiMAX has been deployed to address the market segment referred to as the underserved Broadband market. Practically, this means WiMAX is used as the technology to allow fixed subscribers in homes and offices to access the internet at broadband speeds. In most developed markets, subscribers use ADSL or cable to access the internet from their home or office. In more remote areas or in emerging markets, the business case does not exist to deploy one of these two technologies and consequently, WiMAX becomes the technology of choice to meet the business case of the operator. LTE, on the other hand, appears to be the technology of choice for existing cellular operators to increase their revenues through new and innovative data services. This means that familiar names associated with offering mobile services will be the likely carriers that deploy LTE.
Nortel is active in both technologies for a variety reasons. Firstly, both technologies represent a significant market opportunity. Analysts vary in their opinion on timing and size, but the general consensus is that WiMAX will (actually is) first and that LTE will be much larger in size (over the next 5-10 years). Secondly, WiMAX has a two-to-three year head start on LTE and is being deployed now in commercial networks around the world and has been for some time now. LTE is coming at us like a freight train, but will be in trials in 2008/09 and commercial towards the end of 2009. Thirdly, the R&D effort to design and deploy WiMAX networks leverages a number of Nortel competencies - specifically a strong history in wireless technologies, carrier data networking, VoIP and an end-to-end network perspective. It really does require Nortel to pull together the full power of the atom chart. LTE will require the same competencies. In other words, WiMAX not only provides a market opportunity to generate revenue in and of itself, it provides an opportunity for Nortel increase and improve its skill set in all of these areas to be ready for LTE. Fourthly, Nortel will build common platforms and applications across the broad suite of 4G technologies. We have focused our internal organizations around taking a holistic approach towards platforms and spend as we move towards 4G.
The last thing I would add is that LTE will be a discontinuity for existing operators. There is no question that operators will do everything they can to leverage their existing investments (and this is typically spectrum and their sites vs. their equipment); however, the one thing they will not do is threaten their existing revenue streams with the introduction of a new technology. The era of Hyperconenctivity means that a wide range of new devices will access the network and require a complete rethink of both bandwidth allocation, but also security and general connectivity. To that end, Nortel stands an excellent chance to increase wireless market share through both WiMAX and LTE and looks forward to the challenge.
