Comments on article found at: http://online.wsj.com/article/SB10001424052748704017904575409860401340320.html?mod=WSJ_Tech_LEFTTopNews
I am still a supporter of WiMax as a 4G technology. However, we may be seeing market forces at work here. Buying network equipment is partially about leverage and numbers.
The fewer the network equipment buyers there are the less leverage that buying group has over the equipment suppliers. Carriers are always trying to leverage buying group strength to force vendors to lower prices. Carriers as a whole do not actually plan to buy as a group, however, vendors see carriers as a group. The more customers there are the lower the pricing (hopefully). Vendors have to be able to pay their bills. Economies of scale are achieved when there are massive numbers of buyers. This is what is driving Clearwire and Sprint Nextel (NYSE:S) towards carefully examining the potential for LTE.
What is occurring needs to be put in its proper context; money is driving the decisions towards testing LTE not technical capability. LTE essentially does not exist except in two places; labs and the minds of the engineers.
Is Clearwire doing the right thing? Despite what many talking heads on television are saying, we are still in a recession. People are still losing their jobs and people are spending less. This means one thing for the 4G market revolution, it is being slowed down by economics and not technology capability.
Unless there is a large spike in demand for 4G services that cannot be dealt with by 3G, Clearwire and Sprint Nextel are forced to examine the viability of LTE. As time passes, LTE gets closer to becoming a reality. Unless the market is demanding 4G services it would be bad fiscal management to invest in something that is not needed now. This is good carrier management.
There may be analysts out there who want to take a shot at Bill Morrow or even Dan Hesse over this issue; however, those analysts would be off-base. Looking at LTE given the current circumstances is simply good carrier management.
Clearwire and Sprint Nextel are facing a tough decision in the next 2 or 3 quarters.
In the past WiMax made good economic sense for greenfield deployments while LTE was better suited for the upgrade path. Does this still hold true? Does WiMax still have a future in developing countries?
