The battle over next-generation cellular networksDecember 19, 2007: 6:00 AM ET
By Michal Lev-Ram
Half the world doesn't even own a mobile phone but wireless carriers are already fighting over the next-generation cellular network.
Consumers may care less about whether they'll be using WiMAX, LTE or UMB to download video to their phones or browse the Web faster than ever before. But one by one, mobile operators are aligning themselves with one of these competing next-generation, or 4G, technologies, placing billion-dollar bets on the horse they hope will win the race.
All three of the dueling technologies are Internet Protocol-based and tailored for mobile television, video chat and other data services that eat up a lot of bandwidth.
The first of these technologies to hit prime time will be WiMax, which Sprint (S) is expected to soon launch in three trial markets -- Chicago, Washington D.C. and Baltimore. By the end of 2008 the company says it will reach 100 million people with its new network. Motorola (MOT), one of the suppliers of infrastructure equipment -- and eventually WiMax-enabled phones -- for Sprint's upcoming service, says it has signed 15 contracts for commercial WiMax networks.
"We're driving it at about twice the pace of traditional cellular technologies," Fred Wright, senior VP of Motorola's home and networks mobility unit, told reporters earlier this week.
WiMax proponents claim that the technology is superior to other 4G standards because it's faster and more affordable. But Philip Solis, an analyst with New York-based ABI Research, says all 4G networks are more or less created equal.
"The three major 4G technologies are pretty much on par with each other," says Solis, though he adds that WiMax has already been standardized and deployed.
That didn't stop Verizon Wireless (VZ) from picking LTE -- Long Term Evolution. Solis says LTE isn't expected to become widely available until 2010, but Verizon says it chose the technology partly because the roaming potential it will have with Vodafone. The British company owns a 40 percent stake in Verizon and has already chosen LTE as its next generation technology.
Although the two largest CDMA carriers in the United States have picked opposing 4G technologies, Motorola's Wright says that won't slow adoption of next-gen networks.
"There's probably more industry confusion that was created than anything else," he says.
The U.S.'s No. 1 wireless carrier, AT&T (T), has not decided which 4G network it will deploy.
In addition to WiMAX and LTE, AT&T has yet another technology to choose from -- Qualcomm's (QCOM) UMB, or Ultra Mobile Broadband. So far, though, no mobile operator has committed to UBM.
But the bigger question -- beyond whether the 4G network of choice will be WiMAX, LTE or UMB –-- is whether consumers are as hungry for wireless broadband as carriers think they are.
"We're all hoping they'll want to watch TV on their cell phones," says Qualcomm executive Joe Lawrence.