Clearwire's recent (and completely unsurprising) announcement that the firm is going with LTE is the final nail in mobile WiMAX's coffin. I have not been as vocal over the years on this topic as I should I have been, and only recently gave my first public presentation where I stated that, IMHO, mobile WiMAX is in decline and will eventually disappear entirely. Clearwire has been the poster firm for WiMAX since the company was founded, and I remember meeting a few years ago with all of the senior managers of the company in which they made their case as to why WiMAX would carry the day. They were, of course, dead wrong, and all of them are gone. Clearwire itself, however, has a shot at survival here, depending upon the availability of funds to continue what looks like a very competitive LTE buildout and the ultimate subscriber cutover. While said availability may be tough in the current economic climate, their current business plan is sound - and they have a serious competitor in a big segment (wholesale) of their business model, always a good sign for investors.
My reasoning behind the demise of WiMAX was outlined in a posting here almost three years ago. There was way too much hype surrounding WiMAX (like the White Spaces today, it was marketed as "Wi-Fi on steroids" and a replacement for Wi-Fi; such was, of course, complete nonsense), the "two-year lead" over LTE never really existed as the market for 4G-class mobile broadband was immature and Clearwire regardless offered only pockets of coverage around the country, and LTE, as the upgrade path for both UMTS and CDMA200, was clearly going to be the primary winner as carriers around the globe initiated their next upgrade cycle. I also felt back then that WiMAX might have a shot at around 20% of the US and perhaps global broadband market - that would be enough to run a pretty good business, but, really, who today would invest in a small-share Number Two with no real advantages over the Number One (which is why small-scale Number Two status would be permanent)? No, really, it's over.
I would therefore recommend against further strategic investment in anything mobile WiMAX, and instead suggest that a focus on LTE will serve enterprise users (and many higher-end consumers) quite well indeed. Having a single, global technology for 4G (or, at least, the marketing version of 4G) is going to be great for us all, with much-improved capacity availability as WiMAX spectrum is refarmed - and competition should hold prices to reasonable levels.
And, speaking for competition, who's that serious competitor alluded to above? It's a company that most people have never heard of, but one with an interesting history that is beginning a serious foray into mobile broadband. We'll discuss them tomorrow.
Mathias is a principal at Farpoint Group, a wireless advisory firm in Ashland, Mass.