While the world was speculating whether Clearwire and Sprint would give up on WiMax and move to long-term evolution, Russia’s Yota was contemplating the switch all along. Reuters today reported that the Russian mobile broadband provider will build LTE networks in its new rollouts going forward and will eventually overlay LTE in its current WiMax markets of Moscow and St. Petersburg.
“The only reason we are delaying [LTE's] launch everywhere is the fact LTE technology is so new,” Reuters quoted Yota officials as saying. Yota operates on the same bands as Clearwire (2.5 GHz) and even shares at least one vendor (Samsung). The two have similar business models (unlimited mobile broadband for a set monthly fee), and like Clearwire, Yota was one of the first champions of WiMax as a competing 4G technology. Given the similarities, is Clearwire destined to make the switch as well?
Connected Planet’s take,
Kevin Fitchard:
Prevailing wisdom about WiMax has taken a big blow. When LTE started getting big, WiMax enthusiasts started laying down conditions for operators to choose one technology or the other. If you had unpaired spectrum, you picked WiMax; paired, LTE. If you were a new wireless entrant looking for a competitive advantage you picked WiMax; a traditional wireless operator, LTE. If you wanted to offer primarily residential broadband services, WiMax was the choice; for mobile broadband services, LTE was the way to go. Except for the last one, none of the rules are holding water anymore.
Yota has unpaired spectrum in the 2.5 GHz and 2.7 GHz bands, and it is one of the new wave of competitive wireless ISPs challenging the traditional wireless industry. To deploy LTE it will have to use the technology’s time division duplexing flavor, and it will abandon a technology track that gave it a few years competitive advantage, but apparently the carrier thinks LTE has so much momentum it’s worth it. I wonder if we’ll start seeing the same switch from rural and developing market residential broadband providers. In the U.S., it’s already happening, as some companies seeking federal stimulus dollars for broadband deployment are tapping LTE rather than WiMax.
As for Clearwire, it’s a little further along than Yota in its deployments. Clearwire is already in dozens of markets, large and small, and has invested in WiMax infrastructure in a dozen more. So a switch to LTE won’t be as easy, but Clearwire has certainly held out the possibility of such a transition, and its customer base is small enough (less than a million) that it wouldn’t wreak havoc on its business just yet. But I still think we won’t see LTE networks from Clearwire anytime soon. The difference between Yota and Clearwire is that Yota doesn’t have 4G rivals breathing down its neck. Verizon goes live at the end of the year, and Clearwire has to preserve what advantages it has in terms of time to market and device portfolio. If it started from square one with a brand new LTE network, VZW and AT&T would eat Clearwire for lunch.
That’s our take on this. Let us know what you think in the comments section below:
At the end of the day its all about the big S world “Spectrum. Clearwire has spectrum it doesn’t even use yet and you need that to have killers speeds and a huge customer capacity. Verizon is going to be cheap with their bandwidth and charge more for the same 4g product. Verizon will even put a cap on the 4g product most likely. Mobile prouducts need to be cheaper than home service and need to be generous with bandwidth speeds. Verizon can’t use their previous 3g pricing models if they want to dominate this market.
Its not about spectrum at this point. Its about service quality.
Clearwire is deploying at 2.5 GHz with a technology (WiMAX) that suffers from a weak uplink (user to base station) RF budget. Its going to take a lot of money, a lot of base stations, and some time to build up good coverage and indoor coverage may still trail its competitors. Clearwire’s users are going to spend a lot of time on Sprint’s CDMA network which is a good network but its not HSPA+ or LTE.
In contrast, Verizon is deploying at 700 MHz and LTE does not suffer the uplink issues that plague OFDM techs since LTE has a single carrier uplink. Establishing good outdoor and indoor coverage will be easier for Verizon than for Sprint/clearwire and since Verizon deploying in spectrum that is completely unused and with 2×2 mimo, capacity will not be an issue for some time, maybe a long time, depending on the build out and customer take up.