WiMax shrinking, LTE has issues

July 23, 2010 // Peter Clarke

The battle between WiMax and Long Term Evolution (LTE) as the leading supplier of mobile broadband communications is over. WiMax is shrinking, according to Mike Bryant, an analyst with market research company Future Horizons. He pointed out that WiMax operators in the U.K. and The Netherlands are closing and that U.S. operators are considering re-applying their spectrum to other technologies.

"Intel has spent an awful lot of money on one of the worst investments ever," said Bryant speaking at a mid-year semiconductor market forecast organized here by Future Horizons (Sevenoaks, England).

However, despite the apparent momentum behind LTE it does not mean that the technology is without challenges, he added. "Despite all the hype for LTE, 4G, WiMax, Femtocells and so on, the vast majority of data traffic is handled by standard 2G/3G basestations with GPRS or EDGE enhancements," said Bryant.

LTE is being introduced to try and address this demand for bandwidth but LTE basestations are only just being rolled out in production quantities. "LTE basestations are on 18-month lead times and there is a problem with a lack of suitable sites for basestations."

Whereas a 3G basestation cell could support 4,000 users, an LTE cell is smaller and can only support 600 users, so seven times as many basestations are needed to support the same number of users, Bryant said. That means additional sites have to be found and, in addition, placing LTE equipment on the roofs of tall buildings doesn't always provide street-level coverage as it normally did for 3G basestations.

The result is likely to be an inability to service the demand created by sales of smartphones. Already monthly flat rate data usage plans are being dropped by many operators in favor of per-Gbyte charging schemes to increase profits and throttle demand, said Bryant.

However, that is unlikely to worry Texas Instruments, Freescale and Xilinx; the major chip suppliers to the LTE basestation market, he concluded.

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