Broadband Advisor

"Although LTE is on the GSM track, it really requires new equipment" at base stations, said Lisa Pierce, an analyst at Forrester Research. That means a substantial investment is in store for AT&T and also for Verizon, which has focused on CDMA (Code Division Multiple Access), but partners with Vodafone, a GSM carrier favoring LTE. The cost of a national WiMax network will be billions of dollars, and an expenditure of that much money would not have been possible without the Clearwire-Sprint joint venture.

Uplinks from the user to the cell tower will probably be different in the two technologies. OFDM will be used in WiMax, but a technology called SC-FDMA (Single Carrier-Frequency Division Multiple Access) will be used in LTE, Solis said. SC-FDMA is theoretically designed to work more efficiently with lower-power end-user devices than OFDM is.

Both technologies will be IP-based, which will enable quality-of-service technologies to be applied, although it is not clear whether carriers will offer guarantees of service to business users. The big push for WiMax has been with consumer-based devices so far, and service guarantee considerations have been secondary.

"How much differs between LTE and WiMax remains to be seen, since LTE is not standardized yet," Pierce said. LTE is designed to turn voice and data traffic into packets, which bodes well for unified communications applications, she said. In theory, WiMax will also be able to support voice, but whether it is used for voice "remains to be seen."

The spectrum difference in the US

Both Verizon and AT&T picked up 700 MHz of spectrum in the recent Federal Communications Commission auction, and both carriers said the spectrum will be used for LTE. Meanwhile, Sprint had already been expecting to use its generous holdings of 2.5 GHz spectrum for WiMax. And the Sprint-Clearwire joint venture expects to control about 80 per cent of that spectrum for the WiMax rollout in the US.

Since two different bands of spectrum will be employed, WiMax and LTE transmissions will have different physical properties. And that, in turn, will influence the costs of building base stations and the expensive gear inside.

LTE can run on a variety of spectrums, but the lower 700 MHz frequency will provide greater range and better in-building penetration than a higher frequency would, Pierce said. Still, a lower frequency means that boosting the speed of a transmission might require technologies such as compression and the ability to bond channels together to improve performance.

In comparison, since WiMax will use 2.5 GHz spectrum, bits won't be able to travel as far as they would at a lower frequency. And that suggests that WiMax providers will need to "blanket" service areas with base stations to avoid attenuation, which is the loss of a bit's strength as it travels through air or another medium, Pierce said.