4G World-NOT!Friday, September 18, 2009
I don't like the hype that has run rampant throughout the wireless industry since its inception: advertising slogans that are not true, technology hyped as the next great thing, coverage advertised as better than it is, devices that don't live up to promises, and most certainly claims that today's version of WiMAX is a 4G technology. I am greatly disappointed that, from all reports, the "4G World Conference" was a blatant pulpit for WiMAX and Clearwire.
Not to bite a hand that feeds me, but 99% of the ads in the Wireless Week Show Dailies were about WiMAX, paid for by the WiMAX community. The program and articles I have read leave no doubt that WiMAX was the core of the conference and LTE, the only real 4G technology, was merely tolerated. I am reminded of several other conferences I have attended over the years.
One of my favorite examples was held in the San Francisco area in the 1980s-or was it the 1990s.time sure flies. In any event, it was shortly after the first pen computing devices were released into the market-big, bulky, heavy devices, with 1-2 hour battery life, screens that were difficult to read (no color, no backlighting), and slow applications. The conference was packed with pen computing companies and wannabes, Microsoft, the company behind the operating system, and more venture capitalists than you could count. At the first night cocktail party, venture types were congratulating each other for their vision in putting money into companies developing these new pen-based devices because they were all going to be rich-not!
Today there is a feeding frenzy within the WiMAX marketplace. People who have poured money into the technology and networks have proclaimed victory; their 4G service is real while LTE is still in the future. I'm sure they were walking around the show floor at 4G World congratulating themselves on their insight and ability to understand that WiMAX will win the day and LTE will be too late to the party.
As a 3G technology with the same speed limitations as the other 3G technologies, there is nothing wrong with WiMAX. It works and it will continue to work. But in the United States, WiMAX has less than 1 million subscribers compared to the other wireless networks with more than 270 million subscribers-most of which pay for voice services, some for data. Voice pays the bills, and VoIP over WiMAX is not really voice, it is merely a substitute for true voice services.
I don't blame the Yankee Group; its job is to make money. And oh, by the way, it is paid to provide unbiased industry analyses. But in these hard economic times, who can blame a company for trying to ride a new wave of interest and make some money from it, though I do believe this could have been accomplished with a much more even hand.
When all is said and done, those who stand around at conventions extolling the virtues of WiMAX or LTE are not the ones who will decide what survives and thrives. Customers will make that decision with their checkbooks and credit cards. From what I have seen, the major WiMAX providers in the United States are having problems with their churn and customer growth is slow. They will reason that they don't have the devices available yet and there are not yet enough networks built out, pointing to cellular where it took 10 years or more to prove the industry was viable.
This is true, but Analog Cellular was competing only with IMTS-a phone system that handled one call per channel, had waiting lists, and was very expensive. Clear and Sprint have 6 to 8 competitors in every marketplace. Voice rules and pays the bills while data accounts for less than 30% of a network's income. Building out a new network and competing with incumbents is like running against a senator who has been in office for 30 years and has improved each year. Good luck!
It doesn't matter what the WiMAX camp says or does, nor does what I or others have to say. This is a market-driven economy, and success will be determined by customers who buy wireless devices and services, and renew every month. Any network that cannot hold onto existing customers and must rely on new customers to keep its cash flowing will eventually go out of business.
Back in 1995-96, I had my first run-in with Craig McCaw and his band of merry men. They were touting CDPD (Cellular Digital Packet Data), a technology invented by IBM but claimed as their own. CDPD was to revolutionize the wireless industry with data rates of 19.2 Kbps. RAM Mobile Data and ARDIS (Motorola/IBM joint venture) were running 8 Kbps and 4 Kbps, and CDPD was supposed to make a huge difference.
The problem was that CDPD was late having been promised in just a few more months, just another tweak, over and over again. In the meantime, McCaw's folks were spending a lot of time convincing computer companies not to waste time with RAM or ARDIS and to wait for CDPD. CDPD was finally available several years later but it did not deliver on the promises.
CDPD died a slow death as other technologies came along and took the wind out of its sails-a scenario that tends to repeat itself-but competition is good. RAM and ARDIS did okay against CDPD and have since been replaced with newer, faster technologies, which is normal in an industry based on technological innovation. The problem was that the hype surrounding CDPD slowed the growth of wireless data for about 2 years while everyone who had been convinced that CDPD was the answer waited for it. It is true that WiMAX is real today and LTE is not, but it is close. We won't know the actual LTE data speeds until networks are in place, but we do know they won't be 3-4 Mbps down and 1 Mbps up!
Those who regularly read my blog and Commentary know I have been tough on the manner in which WiMAX is being portrayed and the hype that surrounds it, but NOT the technology.
Let's get real. Network operators need to compete based on what they can deliver today, not what they promise for tomorrow. Hype has a way of coming back to bite and I honestly believe that if the next 4G World is a repeat of this one, the bite will soon follow! Customers don't care what technology they are using, only that it works. However, they do expect "4G" to deliver next-generation data speeds, and today's WIMAX is not delivering. Let's stop saying WiMAX is 4G and start selling it on its proven attributes.