Are LTE Supporters Panicking?

It is important to have the economic environment needed to support a technology’s development and commercialization. This is akin to iDEN. There is only one vendor producing the equipment and one customer of note that is using the technology. iDEN is an example of a technology that does not present any revenue producing possibilities for the vendor community. In other words, the iDEN is not large enough for more than one vendor to get a slice to eat. I don’t think WiMAX is in the same boat. WiMAX’s biggest supporter is Intel.

According to LTE pundits, vendors have pushed development timelines from their original estimates of 2010 and 2011 to as early as 2008 for field trials and 2009 for commercial deployments.

These same pundits and proponents are saying there is a demand for LTE. I don’t doubt there is demand but frankly I would believe someone who did not have any skin in the game.

Some consultants may look at the current digital wars as a blessing in disguise because we now have something to opine about. If there were no digital wars now, I would probably be busy complaining about the flawed LTE rollouts. I have never seen a technology deployed on time and without troubles.

Comments about market research companies and consultants loving the WiMAX v. LTE Wars may have some validity. However, wireless has been one nonstop fight between vendors since 1990 and none of the vendors were put up to fighting by consultants or market researchers.

Some pundits believe there is no choice but to go the route of LTE. Here is what I believe, WiMAX is here now and LTE is not.

LTE is in the lab now. You can launch a beta trial for LTE this year before the technology is stable. The purpose of the beta trial is to test a technology’s most basic functions. LTE is an evolutionary phase of UMTS, therefore it is possible that the LTE pundits are being truthful and a working commercial product can be ready by 2009. Nah, I am leaning toward all this talk being vendor talk to pump up Wall Street investors. If this occurs then this would be the first time in 30 years I will have seen an accelerated schedule actually work. I would love to be proven wrong. I am not married to any technology. I focus on what is available and can generate returns.

Most likely, LTE will be deployed in stages. Let us start with LTE Revision 0. Revision 0 will likely support voice, Internet access, and faster data rates. Revision 1 will support voice, Internet access, faster data rates, and streaming video. Revision 2 will support voice, Internet access, faster data rates, streaming video, and music. You get the picture; technology evolves all the time. Please don’t quote on the details of the revisions; the point is LTE will be deployed in phases.

What is interesting to note is that if the world’s vendors all threw their weight behind WiMAX all of the so-called limitations could either be overcome or worked around. If WiMAX functions as promised then why bother with LTE?

If I were a vendor I would see the current situation akin to Qualcomm(NMS:QCOM) and CDMA. In this case, the vendor is facing Intel(NMS:INTC) in the world of WiMAX. Someone is going to be paying someone else licensing fees. WiMAX is mature by comparison to LTE and offers fewer opportunities for new vendor products and services than LTE.

I empathize with Sarin. I also remember the AMPS v. digital wars, the CDMA v. TDMA wars, and the GSM v. CDMA wars. The wars were costly but brought out the competitive spirit from the vendors. The vendors were fighting like cats and dogs. The vendors were trying to out do one another in every way. The fact is 3G made through standardization faster with the competition. It is true vendors would love to not have to juggle so many balls in the air for carriers. However, many of the vendors also wished they could sell one telephone model in one color as well.

Of course if I were a LTE proponent, I would tell everyone often and loudly that WiMAX is dead. You would too if you were a LTE supporter. If WiMAX is successful, it will be deployed 2 years ahead of LTE. Boy if I were a Vodafone(NYS:VOD), Verizon(NYS:VZ) or AT&T, I would not be a happy camper if WiMAX were deployed first. If I were one of those carriers or even Vodafone, I would probably try to intimidate vendors and the financial community into cutting off money to WiMAX. I just love it when carriers start to panic; they do things like telling the financial community that the last 10 years (or more) worth of Intel investment was pointless. I think LTE supporters are panicking.

Ericsson(NAS:ERIC) has called for one 4G standard; bear in mind Ericsson has no WiMAX product line. Then again, Ericsson is also pushing to keep 3G UMTS alive as well - think about that one. Every vendor has an agenda.

A danger the carriers face is that they themselves will be played for fools by the vendors.