The CEOs of both Sprint Nextel and its WiMax partner, Clearwire, signaled on Wednesday that they might move to LTE (Long-Term Evolution) in the future.
Since Sprint and Clearwire separately embraced WiMax and then formed their joint venture in 2008, LTE has emerged as the 4G (fourth-generation) system most likely to dominate the mobile world. In keynote appearances at CTIA Wireless in Las Vegas, the Sprint and Clearwire chiefs played up the fact that Clearwire is live in 27 markets while LTE hasn't yet launched commercially in the U.S. But they clearly left the door open to adopting LTE themselves depending on how the market shapes up. The large amount of radio spectrum Clearwire controls gives it the flexibility to do so, they said.
"Because we consider ourselves technology agnostic ... we'll give our customers just exactly what they want," said Bill Morrow, CEO of Clearwire. "They want to get access to the network, high speed, low cost, lots of capacity, low latency. Either one of these technologies can deliver those."
"The architecture of our network is designed to be able to add on LTE should we need to," Morrow said. "We can sunset one technology going forward if we need to in the future."
Morrow has called Clearwire technology-agnostic in the past, but Wednesday's comments were the strongest yet indicating the venture might ultimately abandon the technology that gave it birth. However, neither he nor Sprint CEO Dan Hesse exactly waved a white flag of surrender in the competition between WiMax and LTE.
Morrow called for convergence between networks using the two 4G technologies. He said service providers should allow for roaming between LTE and WiMax networks, using devices that can connect to both. Carriers in the U.S. in particular have an opportunity to do this, he said. Morrow pointed out that chip maker Beceem Communications announced a chip last month that includes both WiMax and LTE capability.
Still, Morrow said WiMax is far from dead. He said 600 million people around the world are within reach of a WiMax network and 1 billion will be by the end of this year. "That's a market that's big enough to be around for a long time," he said.
Sprint's Hesse appeared just before Morrow and also cited the possibility of adding LTE. In an on-stage interview at the keynote session, CTIA President and CEO Steve Largent asked Hesse why his predecessors at Sprint had chosen WiMax in the first place. "It was time to market," Hesse said.
"Because of our spectrum position ... we have enough that we can always add other technologies later, but it lets us get in the market quickly," Hesse said. Highlighting that competitive advantage, Hesse added, "If you're interested in 4G, you have one choice."
The real benefit of WiMax comes with the economics of the technology, according to both Hesse and Morrow. Echoing predictions by other carrier executives, Hesse estimated that in two years, plan pricing will be based mostly on the number of gigabytes the subscriber gets each month. That gives WiMax providers an advantage because it's less expensive to deliver bits of data on that technology, he said.
Morrow put that advantage in more concrete terms. Research shows most mobile operators can't make a profit delivering more than 3G bytes or 4G bytes per month to a subscriber, he said. Meanwhile, the average Clearwire subscriber uses 7G bytes per month, and the company could make a profit even with twice that traffic, he estimated.
"We have customers who use a terabyte of data per month," Morrow said.