(Originally posted at http://www.von.com/blogs/guest/2008/12/to-lte-or-not-to-lte.aspx )
Talk about confusion in the market! Is the arrival of LTE-based 4G imminent or still years away? Depending on which articles you’ve been reading, you could draw highly contradictory conclusions.
Qualcomm’s announcement comes on the heels of Nortel Networks Ltd.’s announcement this past summer that it’s shifting its development focus from WiMAX to LTE and Motorola Inc.’s announcement that it’s planning to release 700MHz LTE products in 2009.
It sounds like 4G is right around the corner! Or is it?
It’s not surprising to see vendors jumping on the LTE bandwagon. Qualcomm had $600 million tied up in goodwill related to UMB (Flarion M&A), and without carrier support for UMB, it’s possible some level of writedown may be in the cards. Both Nortel and Motorola have seen their stock prices decimated this past year, and announcements related to “the next major thing” allow them to add some (Gartner) Hype into their stories for the Street without having to back it up with any performance metrics.
In early October, AT&T Inc. (T), North America’s largest wireless carrier, suggested publicly that its HSxPA-based 3G networks still have a lot of life left in them, and is projecting LTE won’t be deployed on a commercial scale for another five years. Of note is that in the month following this disclosure, AT&T announced its acquisition of Wayport, the country’s largest commercial Wi-Fi service provider. With this acquisition, AT&T adds very significant wireless data capacity, for devices of all kinds, across its footprint without having to spend anything on additional spectrum.
And what of the prospects for 4G to get mired down in a patent quagmire? Some of the handset vendors have banded together to create a patent framework for LTE, but other key players are absent. ADC has indicated it has several key patents related to 4G. There also has been speculation Qualcomm may attempt to assert its OFDM patent portfolio, much of which was acquired with its Flarion deal announced back in 2005. With the discontinuation of its UMB (i.e. Flarion) development, it is not a stretch to imagine attempts to recoup its $600 million price tag via threatened litigation and broad-based licensing of the related IP.
Will LTE be rolled out? In all likelihood, the answer is yes. However, three things threaten to continue to push this date further to the right:
- Capital markets
- IP landscape and uncertainty
- Existing, low-cost substitute technologies like Wi-Fi
Previously, I blogged that the debate as to which technology is better, is moot. Ultimately, the market will dictate timing and required capabilities. There are true broadband wireless devices shipping today in the hundreds of millions of units, heading to over a billion per annum. While AT&T has come out and indicated its 3G network has legs, its investment in Wayport is a strong indication that Wi-Fi has legs too!
That’s my .02!
Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high-profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems and Teradata. Additionally, Martin successfully has negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.