LTE tests signal Clearwire is serious

It's likely the carrier will use LTE eventually, and the choice will probably be revealed within a year, analysts said

WiMax carrier Clearwire is likely to adopt LTE (Long-Term Evolution), and its decision will probably be known within a year, analysts said following the company's announcement on Wednesday that it will test the network technology.

Clearwire's plan for trials, set to take place later this year and early next year in Phoenix, was not a big surprise after recent statements by the company that it could use LTE and was studying its options. But the announcement could eventually have an impact on WiMax, as Clearwire's national network is the world's largest deployment of it, analysts said.

The carrier, which is majority owned by Sprint Nextel, said it is committed to WiMax for its current build plans and is considering various ways in which the two technologies could coexist. With between 120MHz and 150MHz of radio spectrum in most markets, Clearwire has enough capacity to operate two networks at the same time. Its existing backhaul and core network also could accommodate both networks, Chief Commercial Officer Michael Sievert said in an interview Wednesday. The tests will be carried out in cooperation with Huawei Technologies and Samsung Electronics, and both companies' base stations in Clearwire's WiMax network could be upgraded to offer LTE, he said.

If Clearwire does use LTE, it will probably deploy the new network alongside WiMax and gradually change the mix of client devices it offers to consumers, said analyst Peter Jarich of Current Analysis. Once most of its subscribers are using LTE or dual-mode products, the WiMax network might eventually be discontinued.

As a majority of 4G deployment plans by carriers around the world specify LTE, device manufacturers are expected to make a wide array of products to use that type of network. Russian carrier Yota, which announced earlier this year it would adopt LTE, said it was doing so in part because it thought the supply of LTE devices would exceed products for WiMax. For the moment, there are more commercial networks and more devices for WiMax, including the HTC Evo 4G handset sold by Sprint. Clearwire promises its own handsets later this year.

"The decision will in part be the technology, but mostly the ecosystem -- how it develops -- and their funding ability," said Monica Paolini of Senza Fili Consulting. It's still possible that it will take a long time to work out the kinks in LTE equipment, in which case Clearwire might just stick with WiMax. However, "at this point I think it seems quite likely that they will move to LTE," Paolini said.

Verizon plans to introduce LTE service by the end of this year, reaching at least 100 million U.S. residents in 25 to 30 major markets, and AT&T has said it expects to roll out some LTE in 2011. But Clearwire has two key advantages over those rivals.

The huge spectrum holdings that the company crowed about in its LTE trial announcement give it a real edge, analysts said. Clearwire said Wednesday that with FDD (frequency-division duplex) technology, it could use a pair of bands that are twice as wide as that of its competitors. As a result, it could offer downstream speeds between 20M bits per second and 70M bps, far above the speeds between 5M bps and 12M bps that Verizon has found in some of its tests. Though even Clearwire wouldn't get more specific about where in that range the real speed will be, its greater spectrum holdings are a major advantage, analysts said.

In addition, Clearwire can move to LTE at its leisure, because it already offers a 4G service, the analysts said. This is good, because Clearwire will be a pioneer in the technical problems of transitioning from WiMax to LTE, Paolini said. Network equipment vendors say it will be fairly easy to add LTE to their base stations, and Clearwire's trials will put those claims to the test, she said.

But despite the fact that Clearwire's not under pressure to get LTE rolled out, analysts don't believe the suspense will last too long. For one thing, the more subscribers it gets on its WiMax network the harder it will be to bring those customers along to LTE. Clearwire said Wednesday it has about 2 million, counting both its own subscribers and those of wholesale partners.

"Within a year, we should have a good sense of how things are heading," she said. Jarich thinks it's likely the carrier will announce a commitment to LTE in the first half of next year, at a major mobile event such as Mobile World Congress in Barcelona in February or CTIA Wireless in Orlando in March.

A gradual move to LTE by Clearwire would affect WiMax vendors, but the industry will probably take Wednesday's announcement in stride, the analysts said. Makers of both infrastructure and device components have been preparing for a world of two technologies. In addition to the base-station vendors' transition promises, some chip vendors are beginning to focus on multimode silicon to make devices compatible with both types of networks. Beceem, a maker of device chips that support both WiMax and LTE, will also be participating in Clearwire's trials.

"It doesn't help, but it isn't unexpected," Paolini said.

Even if Clearwire eventually goes to a pure LTE network, WiMax would probably live on in other networks, such as ones aimed more at stationary use or at specialized machine-to-machine applications, Jarich said.

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