New Mobile Internet chief says LTE is the future; reversal from Cisco's previous agnosticism
Cisco blew a big hole in its “agnostic” mobile wireless story with this week’s $2.9 billion buyout of Starent. While placing a big bet on mobile WiMAX two years ago with the $330 million purchase of Navini Networks, Cisco trumped that this week by plunking down almost 10 times that amount on Starent, which sees LTE as “the future.”
Mobile WiMAX and LTE are competing — Cisco might say complementary — technologies for 4G wireless networks. After Cisco bought Navini though, most of the industry — including huge Cisco customers Verizon and AT&T — selected LTE as their 4G foundation of choice.
That allowed Cisco to supply Clearwire with 4G wireless infrastructure but few others. Meanwhile, Cisco, in an effort to gloss over this technical gaffe, said it is “agnostic” when it comes to supporting the two technologies and is even building an LTE gateway out of its ancient 7600 series router — the same router expected soon be succeeded by the new ASR 9000 series. The LTE/mobile WiMAX selection for 4G is not an either/or decision, Cisco officials said.
Well, it is now. Cisco’s new Mobile Internet Technologies Group chief said this week that “the future is LTE.” And the head of that new Cisco group is the President and CEO of Starent, Ashraf Dahod.
“The focus is on the UMTS and LTE markets,” Dahod said during a conference call on the Cisco acquisition. “Our goal is to aggressively focus on the UMTS and LTE markets. That’s where the future is; the future is LTE.”
Market analysis firms, like Technology Business Research, have noticed. In a dispatch issued this week, TBR notes:
While Cisco has been trying to play both sides of the WiMAX/LTE debate – at least in terms of its public statements – until now the company’s product and alliance strategy had been more closely aligned with WiMAX…By contrast, Cisco’s only significant LTE announcement came in late 2008, when it announced it would add LTE mobile gateway functionality to its 7600 Series routers. However, these products are not likely to be LTE-ready until late 2009 or early 2010.
Anyone holding their breath for the 7600 LTE gateway? Catharine Trebnick of Avian Securities thinks you can let it out now. In a bulletin on the Starent purchase, she writes:
Our channel checks have indicated Cisco’s 7600 didn’t have the features required for all-IP LTE networks. The Starent acquisition resolves this shortcoming by putting Cisco squarely in the mobile data market segment.
Trebnick thinks Cisco’s next wireless acquisition will be a RAN vendor even though Cisco recently said it will rely on third parties for radio access technology.
So where does all this leave Cisco’s mobile WiMAX aspirations? Probably in support mode for Clearwire. LTE won — even the agnostic Cisco admits it.
Says Visant Strategies Senior Analyst Larry Swasey, “Mobile WiMAX will be a niche player…and it will be an important footnote in 4G history.”
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