It’s become quite clear which technology the top four carriers have sided with in the next-generation debate between WiMAX and Long Term Evolution. Sprint Nextel Corp. is the lone supporter for WiMAX; Verizon Wireless and AT&T Mobility Inc. made public their plans to deploy LTE, a decision expected to be echoed by No. 4 operator T-Mobile USA Inc.
(It should be noted that while Sprint Nextel has thrown its support behind the WiMAX camp in regards to its vast 2.5 GHz spectrum holdings, the carrier has yet to announce any next-generation plans for its traditional cellular properties that operate in the 800 MHz and 1.9 GHz band.)
So what about the smaller, not-as-highly publicized carriers? Following in the footsteps of their larger-scale competitors, most small carriers are latching onto LTE, if anything at all. Decisions are not final for most, but they are clear, and there isn’t much mention of WiMAX.
Pricing influence
MetroPCS Communications Inc. said it will go with LTE as its 4G technology during its second-quarter conference call. And during that call, Roger Lindquist, chairman, president and CEO of MetroPCS, said it will happen sooner, rather than later. MetroPCS was not available for follow-up questions on its plans.
U.S. Cellular Corp. is also betting on LTE. Mark Steinkrauss, VP of corporate relations for U.S. Cellular, said although the carrier hasn’t made any huge decisions yet, it will pursue the LTE path. Steinkrauss said the main pull toward the technology is all the money the company expects to save by doing so.
“We think that offers the bulk of where the U.S. and the world is going,” Steinkrauss said. “[That] suggests to us that besides the benefits of LTE, spectral efficiencies and speeds, you’ve got the opportunity for reasonable infrastructure costs and equipment costs.”
Handset pricing is another likely benefit, Steinkrauss said. Verizon Wireless’ decision to go with LTE was also a big factor in the decision-making process, Steinkrauss said.
“We tend to follow the path that Verizon Wireless follows because we have extensive roaming agreements [with them],” Steinkrauss said. U.S. Cellular also has roaming agreements with Sprint Nextel, but Steinkrauss made it clear that it would not mimic the decisions of the carrier when it comes to 4G technology.
“I don’t see us pursuing WiMAX,” he said. “It doesn’t seem to be gaining a lot of traction and if it’s not gaining traction, it’s not going to help with infrastructure costs.”
Leap Wireless International Inc. has been quiet about its evolution plans, and remains quiet. Greg Lund, spokesman for Leap Wireless, said the carrier is still in the very early stages of determining what will be the best path for the company.
“As you can imagine, there are several factors that we must weight before ever making a decision one way or the other, from expected capex and opex requirements to what makes most sense from a technology perspective for the types of services we offer to our high-usage subscribers,” Lund said.
Regional wireless player Centennial Communications Corp. will also follow the actions of tier-one carriers when making its technology decisions. Jeff Shively, senior VP of engineering and technical operations at Centennial, said nothing is set in stone, but LTE will be the likely choice. He said Centennial is considering many factors and is in the midst of deploying UMTS technology, making sure it is financially ready.
“We look at capacity amount of spectrum and it’s a lot more efficient than what UMTS is,” Shively said. “As we look toward our UMTS vendors, we need to make sure they have a migration path to get us to LTE.”
In regards to following the big guys, Shively said he expects Centennial to make a final decision in the next 18 to 24 months.
Spectrum bands
Bill Ho, analyst at Current Analysis, agrees that LTE is the right choice for small carriers and identified the real issue will be what frequencies they use to deploy it.
“We know that AT&T and Verizon Wireless will use the 700 band to do it,” Ho said. “It remains to be seen if it will ever make it to the AWS bands in terms of equipment.”
Ho also advises smaller players to wait it out and eventually take advantage of the larger carriers’ capital investments, naming Alltel Communications L.L.C and U.S. Cellular as examples of carriers that waited to roll out CDMA2000 1x EV-DO until after Sprint Nextel and Verizon Wireless rolled out.
“As these larger players buy more, the manufacturers recover their R&D and can lower pricing,” Ho said. “There is also the guinea pig factor in which they can let the big guys shake out the bugs.”
MVNOs?
So what about mobile virtual network operators? Ho sees access to LTE for MVNOs no different than with regular cell service. It will be the sticking point of wholesale pricing, Ho said, and to some extent MVNOs can benefit because the technology is mostly uniform, large carriers are backing it and the LTE ecosystem is pretty large.
There may even be hope for WiMAX in the world of MVNOs.
Daniel Neal, CEO and founder of Kajeet said WiMAX is the technology he’s had his eye on due to the good experience they’ve had working with Sprint Nextel. Neal said at this point it will depend solely on the devices that come about with the launch of WiMAX.
“It’s not like there’s a huge human cry among teens and tweens for 4G right now,” Neal said. “They do use what an American wireless user would call advanced services, but we just don’t hear a lot of requests. That’s going to take some time to evolve.”
Jayne Wallace, spokeswoman for Virgin Mobile USA Inc., said neither WiMAX nor LTE is a roadmap item for Virgin Mobile USA or its subsidiary Helio L.L.C. In fact, the MVNO, which runs on Sprint Nextel’s CDMA network, just recently unveiled its first EV-DO handset, though Helio has offered such devices since its inception.
