T-Mobile USA recently announced that it is to skip evolution of HSPA and go straight to LTE, bypassing HSPA+. The announcement is a further sign of the growing operator momentum behind LTE, and increasing marginalisation of mobile Wimax. However, opportunities for mobile Wimax and HSPA+ should not be overlooked.
T-Mobile USA's announcement is not a surprise in itself. As a GSM-based operator it was always likely that it would migrate to LTE. However, the fact that it is another major global operator giving full public backing to LTE means that mobile Wimax is becoming increasingly marginalised as a long-term, mass-market option.
Globally, operators from across the current technology divides are coalescing behind LTE (for example, Verizon Wireless in the US and NTT DoCoMo in Japan). The 'New Clearwire' is now the only large-scale operator to pin its hopes on mobile Wimax, and Qualcomm has dropped development of its UMB technology.
This momentum is reflected in our recently updated forecasts. By 2013 we forecast that there will be almost as many LTE connections worldwide (37.8 million) as mobile Wimax (42.4 million), despite mobile Wimax's two-year head start. The window of opportunity for mobile Wimax is closing rapidly. We predict that after the end of the forecast period, LTE connections will rapidly surpass mobile Wimax.
Wimax not redundant - yet
Operators need to take a pragmatic approach to network evolution, so a 'LTE versus mobile Wimax' view of the world is over-simplistic. For example, Telenor has purchased spectrum in Norway to use mobile Wimax to provide fixed wireless broadband services to rural communities not served by DSL. And last month, HTC released a dual-mode GSM-Wimax device for Wimax operator Scartel in Russia.
Furthermore, operators need to take a market-by-market approach. Maximising economies of scale for equipment orders makes financial sense at one level, but could be counter-productive if market conditions are inappropriate. For instance, Vodafone is yet to declare its allegiance to a single technology but already has a fixed Wimax solution in Malta in addition to its HSPA network. However, it is highly likely that LTE will be the dominant technology at Vodafone for the evolution of its mobile networks, given CEO Vittorio Colao's desire to deepen the relationship with Verizon Wireless in the US and the latter's plan to migrate to LTE.
Don't ignore HSPA+
It is important to note that the above figures are for 2013. In the meantime our forecasts emphasise the fact that HSPA will be the most dominant high-speed wireless data technology for the next five years. Even in 2013 the installed base will have grown to such an extent that 79% of high-speed connections (HSPA, LTE, CDMA EVDO and mobile Wimax) will be HSPA.
The T-Mobile announcement, therefore, does little to change our conviction in relation to the opportunities for operators to extend the lifespan of their HSPA networks by migrating to LTE via HSPA+. Indeed, HSPA+ gives operators additional flexibility to adopt the migratory path best suited to their needs. Telstra in Australia and StarHub in Singapore have opted for HSPA+ Release 7 64QAM, which offers maximum theoretical downlink speeds of 21Mbps. HSPA+ Release 7 2x2 MIMO, supporting 28 Mbps, is currently being considered by Softbank in Japan. Operators could also opt for HSPA+ Release 8 with 42 Mbps, or leap straight to LTE.
Many factors will dictate an operator's final network evolution path. These include competitive landscape, spectrum availability and legacy network to name but a few. Although LTE continues to gain momentum, operators still have plenty of network migration options available.
Steven Hartley is senior analyst on Ovum's mobile analyst team
Julien Grivolas is principal analyst in Ovum's telecoms group