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Mobile WiMAX’s chances of becoming a serious competitor to LTE in the next generation of mobile networks appear to be getting slimmer all the time. The news that the TDD (time division duplexing) variant of LTE (known as TD-LTE) may be used in Taiwan, India and other markets, as well as China, suggests that WiMAX may not even be the number one choice for use in TDD spectrum.

If dual-mode LTE devices, capable of connecting to both the FDD and TDD variants of LTE, eventually become the norm, then TD-LTE will probably gain an unassailable advantage over WiMAX in terms of economies of scale and breadth of device support. That’s because the TD-LTE market would be standing on the shoulders of an army of giants – the majority of the world’s biggest mobile operators have said they will deploy LTE in FDD spectrum. The Global mobile Suppliers Association said today that there are now 64 operators committed to LTE network deployments in 31 countries, compared with 31 network commitments 12 months ago.

But LTE’s numerous supporters shouldn’t get complacent. LTE does face formidable competition, but from WiFi, rather than WiMAX. 

Operating in unlicensed spectrum, the provision of WiFi access involves a fundamentally different cost base, and therefore business model, to LTE and other mobile technologies, which have to make use of licensed spectrum typically acquired by a small number of operators at great expense.

In urban areas, you don’t have to go far, these days, to find a free WiFi hotspot, whether that be in a McDonalds, a Starbucks, an independent cafe, pub or hotel foyer. Of course, most of these hotspots aren’t really free – you’ll probably have to buy a coffee, but you might have wanted one anyway. And for anyone roaming abroad, a coffee will probably be cheaper than using a mobile broadband connection. 

WiFi with no strings attached

In some cities, public buildings provide free WiFi with no strings attached. Anyone with a computer or smartphone can sit down in London’s Royal Festival Hall, for example, and get online, albeit via an intermittent connection. The Centro de Cultura Contemporanea de Barcelona also appears to offer free WiFi to anyone in the vicinity. Some train services, such as Britain’s East Coast line, also provide free WiFi.

At the same time, more and more people have WiFi in their homes and places-of-work. The strong demand for Apple’s iPod Touch and its first iteration of the iPad, both of which have WiFi, but not 3G, is a clear indication that many people are prepared to make do with just WiFi even in a highly-portable device.

To be sure, there will always be customers, notably business people in a hurry, who will be prepared to pay for the convenience offered by mobile broadband. Despite the profusion of free WiFi hotspots in London, I have an HSPA dongle and a related service contract.

But seemingly free WiFi is obviously going to put downward pressure on what operators can charge for mobile broadband and that could weaken the business case for widespread deployment of expensive new LTE networks.

Move over WiMAX, the real battle is a more fundamental one between free wireless hotspots and paid-for mobile broadband.

 

David Pringle

This article was first published on the GSMA’s Mobile Innovation Exchange. David moderates discussion forums on the site and is a freelance media and investor relations consultant.

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members