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Summary:

Ericsson chief technology officer Hakan Eriksson tells me that the Swedish wireless gear maker is really big in the US, why WiMAX really isn’t 4G, and a world where 4G wireless broadband is a norm, we will soon need a device that is a cross between an iPhone & a Netbook.

Hakan Eriksson, chief technology officer of Stockholm, Sweden-based telecom equipment giant Ericsson, doesn’t much care for WiMAX. He doesn’t even think of it as a real 4G wireless technology — though to be fair, since the ITU hasn’t actually set the standard yet, there are no real 4G technologies. “They are four years late so they have to call it 4G,” Eriksson said of the telecom standards organization during a conversation with me earlier today. He proceeded to run down the reasons why he feels 4G isn’t a true wireless technology — all while laying the smack down on WiMAX.”There are 400 million people using 3G (HSDPA/WCDMA) technologies today,” he said. “There will be 70 million people using WiMAX in five years.” And by then, of course, Long Term Evolution (LTE), the 4G wireless technology, will be the de facto standard thanks to the patronage of large phone companies such as Verizon, Vodafone and AT&T, Ericsson hopes.

LTE Everywhere

As a result of its sheer scale, LTE will always have a price advantage — and such costs savings will be passed onto devices that utilize the technology. Eriksson drew a comparison to India, where GSM-enabled handsets enjoy a price advantage over their CDMA counterparts. “It will be the same for LTE and WiMAX,” he said. “In the end it will be about the economies of scale.”

LTE, according to Eriksson, is going to have a profound impact on our perception of mobile broadband, noting candidly that most of us in Silicon Valley don’t even enjoy true 3G speeds because our backhaul networks aren’t up to snuff. If we did have more bandwidth, he said, we’d be able to experience the true promise of 3G, which in turn would make us all rethink the possibilities offered by this new mobile broadband platform.

As Dr. Jan Uddenfeldt, SVP and senior adviser of technology to Ericsson’s CEO, pointed out, LTE will eventually move towards 100 Mbps. At those speeds, wireless broadband will start to compete with wired connections, especially that use DSL technology. According to Ericsson’s estimates we should start to see commercial deployments of the technology sometime next year, By 2012, the company expects LTE to be everywhere.

Devices, and the Apps That Run on Them

When we started talking about devices, Eriksson said the next generation of devices would be data-centric — likely a cross between an iPhone and a netbook — with an emphasis on browsing and multimedia technologies. “I think there are a lot of devices that do voice very well, and LTE is all about data,” he said.

Personally, I don’t believe that netbooks are a viable device option for the coming mobile broadband tsunami. So I’m glad to hear the Ericsson team articulate a bigger vision, one that includes specialized devices that leverage these new, super-speedy networks.

The need for such a devices adds credibility to the possibility of a larger-sized iPhone or iPod Touch. As I’ve noted before, if there was ever going to be a relationship between Apple and Verizon, it would have to revolve be around LTE-based devices. Verizon is spending shiploads of cash to build out its 4G network, and it would need something like an Apple tablet on which to run it.

This will present a big opportunity for Silicon Valley companies, Eriksson said, to build richer, more engaging Internet applications and adapt them for mobile broadband platforms. “I hope we see web browsers that are more capable and standardized to do better video and better gaming,” Eriksson said.

And in order for that to happen, he has Dr. Uddenfeldt based here in Silicon Valley. The company just opened a new division headquartered in San Jose that’s dedicated to IP & broadband solutions, with R&D that’s focused on mobile broadband and Internet convergence. Ericsson, which recently acquired the CDMA/LTE assets of Nortel for $1.13 billion, is slowly increasing its North American presence and today employs about 14,000 in this continent vs. 19,000 in Sweden. This new facility in what is the heart of Silicon Valley is a recognition of the fact that the U.S., after being left on the sidelines, is slowly moving to center stage when it comes to next-generation mobile and the mobile Internet.

Photo of iTablet courtesy of factoryjoe via Flickr

  1. What is better for the industry? Competing standards with wimax and LTE or having one true global standard for the 1st time.

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    1. Folks:

      GSM technology has yet to deliver on its promises. I can tell you that today WiMAX is delivering on theirs. there may be those persons reading this blog that would think of their experience with a current cell phone provider, AT&T, Vodofone, T-Mobile, BT, LIME that can truly say the technology they are using delivers a better customer experience than WiMAX.

      We are about to deploy one in Barbados using Moto Wi-4 and we know the experience will be better than any current established provider can deliver- video calling, an Internet expierence where you get all of the frames you would using a laptop or on a network, and yes way faster than Verizon’s Rev-a network; by far the fastest in the USA.

      THe customer wants reliable broadband speeds to their palms and at their finger tips and WiMAX is doing just that and will do more.

      FIrst it was suppose to be the high speed HSPA that was suppose to deliver way in excess of 5 Mbps; theoretically, but barely delivered 300-500Kps. Given the clear advantages WiMAX will be more dominant than LTE.

      THe truth is that the GSM cellular providers have to find a way to keep their customers but having not been able to deliver on it yet I seriously doubt they will be successful. YOu will see many GSM provider either acquire or bid for WiMAX spectrum

      Nokia is having second thoughts about abandoning WiMAX and its clear that Ericcson will as well. Given the predictions of this market and where those predictions were correctly called Ericcson will see their stock rise or fall dependent upon if they are allowed to keep the parts of Nortel is won at auction, and how they handle acquisitions and partnerships. Nonetheless if they opt to stay out of the WiMAX market they will loose significant market share.

      I believe that Moto will come back once properly aligning its assets and determination.
      Most of the companies doing GSM selected the technology because of cost and it will not allow them to handle the competition from WiMAX like a Rev-A network will.

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      1. Most of the feedback I have had is that WiMax and LTE are broadly simlar, both using OFDMA. The technology is bound to improve over time, whichever camp you are in, but the real issue is not one of technology.

        The real problem is architecture. The standard PMP architecture of most networks is well suited to gaining coverage quickly, and does the job well, albeit at high cost. However, in developed markets, customers requirements of a network are changing. Holes in coverage will be less acceptable, data demands will continue to rise and all this will come with an expectation of “all you can eat” data at $15/month.

        In developing markets, reliable coverage and data availability are even more important given the lack of alternative infrastructure.

        In this situation, the standard macro-cell architecture will look increasingly expensive, regardless of which standard is used. That is what needs to change. The negative comments made about WiMAX networks so far only seem to re-inforce this. They don’t seem to be about problems unique to WiMAX.

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  2. i am always amazed that the conversation on 3G/4G is always limited to handheld devices versus netbooks. the dominated bandwidth users of this technology will be old fashioned laptops and even desktops as most subscribers will be cutting out there DSL/Cable to offset the cost of their new mobile broadband subscription.

    here in denver cricket broadband is becoming massively popular and almost no one who subscribes also has a wired connection. also desktops are as popular as laptops to be connected via cricket.

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  3. I’m not sure that I agree that laptops will be the primary data hog on these networks. The iPhone is relatively speedy in accessing YouTube for example and there are potentially many more of these products than connected laptops.

    I agree that mobile data is not just for mobility. My first Verizon data card was used at home primarily. Looking forward to LTE!

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  4. I am always amazed at the pure hyperbole that comes when people position their company strategy as the answer for the market. The facts are simple – LTE is a forklift upgrade from 3G, just like WiMAX. LTE and WiMAX, given similar channel sizes etc will be using the same advanced signal processing techniques and hence will have similar capacities. Given that what is the real difference between the two? WiMAX is about 5 years ahead of LTE and has a large ecosystem of suppliers that are already deliviering WiMAX modems for a fraction of the cost of the 3G modems today let alone LTE products in two years

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  5. “The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” —Rupert Murdoch

    I think that the Ericsson CTO is missing the mark. Why WiMAX momentum is scaring them so much is that the business of broadband is not same as voice and they are losing monopoly of cellular voice network business. In order to make operator business successful in broadband, you need big highways (spectrum that allows 10-20MHz channals at minimum), you need an low cost IPR ecosystem, and open industry, competitive ecosystem. This is why governments across the globe are allocated spectrum in 2.3G and 2.5G in addition to 3.5GHz. Today WiMAX USB dongle costs below 3G! India, Indonesia, Brazil… are allocating spectrum for WiMAX. Taiwan and the internet community are fully behind WiMAX. We already have multimedia devices with WiMAX, Wi-Fi and 2G, 3G in the market. WiMAX is a friend and helps mobile operators to expand their business but through the OPEN internet model. You have a unique situation in US, with Clearwire network which is growing, you have Sprint, Comcast, TimeWarner together providing alternative for consumers. New innovative operators such as Open Range and DBC are bringing broadband to neglected America. If I were them, I would be nervous and try downplay the strength of the competition as well.

    To prove further my point please visit a few conversations on WiMAXTimes.com – Let’s keep our eye on the ball, Voice Over WiMAX – The Killer Application, and What are the essential features that make WIMAX successful?

    Mo Shakouri
    WiMAX Forum

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    1. This Tata Comm case-study of its rollout of WiMAX across Indian cities is illuminating and I agree with Keith Walker when he says “The customer wants reliable broadband speeds.. and WiMAX is doing just that and will do more.” Writing it off, the way the Ericsson CTO seems to be doing, seems rather presumptuous.

      http://www.slideshare.net/newworldready/connecting-a-continent-with-80216d-the-indian-experience

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  6. … and the editor of the NY Times says that newspapers will never be replaced…

    Every time I see an Ericsson comment about WiMAX it makes me laugh. It seems so last century to me that LTE vested interests find it so necessary to continue to knock WiMAX. You don’t see WiMAX proponents continually knock LTE.

    Spectrum, availability, CPE availability and cost, performance will all play roles in which technology is ultimately more successful – but for mine, the competition won’t be a technology nor a business economics fight but more of a big (incumbent wireless operators) company versus small (new WiMAX startups) company fight.

    Today the incumbents would score an easy win. But as someone who has spent a lot of time selling to wireless operators (for one of the large LTE providers) and therefore experienced how slow and cumbersome and last-century they are (just like their suppliers and Ericsson’s Mr Eriksson’s comments are also last century in fact), I suspect the big-powerful-slow-want-to-control-the-world Vs small-nimble-open-just-get-on-with-it fight will be much closer in a year or two.

    If I can get Google Talk, and all the other new applications that the incumbents will find so darn challenging, on my WiMAX network but not on my LTE network I know which I will choose.

    GG

    I agree with Mo’s quote from Mr Murdoch – small is the new big.

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    1. The consumers do not care which technology is powering their broadband experience. If I can have 3-5Mb average experience when fully mobile for $50-75 per month and >5Gb consumption, and it works everywhere I go (USA, Europe and Asia) why would I care if it’s 3G or Mobile WiMAX? The point is, WiMax had its chance. If mobile WiMax had become pervasive in 2005-2007 –as promised — then there would be no debate today. WiMAX is late, not as compared to LTE — but to HSPA. It’s all about the consumer experience willingness/uptake and the business case for the operators.

      I cannot understand the business case for spending over $7B in R&D and investments… can show any kind of positive return with “maybe” $1B in revenue by 2013-14. Today, Clearwire and Sprint ‘may’ have 1m subscribers. How many are using it for mobile? “Maybe 30%? Compare that to over 200M mobile subs today for HSDPA/HSPA consuming up to 4Gb/month/subs (Europe).

      Signals Research recent report “Wassup with WiMAX?” from July 21.
      “…if one compares the sustainable WiMAX ecosystem with the sustainable HSPA ecosystem, then the advantage clearly lies with HSPA – both from the perspective of the number of companies that it can support as well as to the overall size of the addressable market….And as we have argued in the past, the real competition for Mobile WiMAX is HSPA and not LTE. Once an operator deploys HSPA it isn’t going to look back and reconsider a switch it Mobile WiMAX. When the HSPA operator ultimately deploys LTE is an entirely different question, but it will ultimately be a question of when and not if.”

      Mo — keep up the good fight…though I think the mobile fight is over.

      Twitter/Mobileinsider

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      1. HSPA is a CDMA upgrade technology and I don’t see where it solves the basic cost problem of more, and closer towers required for CDMA than WIMAX. Its foolish of any carrier to pursue an upgrade path that doesn’t decrease coverage costs. Consumers will care as WIMAX or LTE reaches economy of scale and is able to undercut HSPA solutions or bundle more services at the same price.

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  7. Ericsson never liked WiMAX, because from the get go there were too many competing vendors. Too much competition means less opportunity for equipment markup. Of course, now that ZTE and Huawei seem poised to crack Ericsson’s traditional markets with LTE gear, they might not have much good to say about LTE either, come next year or the year after.

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  8. It is easy to throw big numbers when you are the incumbent “but” a closer look will show that it took 3G industry almost a decade to get to these numbers. And getting to 4G will be no different from an upgrade perspective. WiMAX’s emergence as a key broadband technology has less to do with the competition it creates for current 3GPP technologies “but” more to do with the fact that there really is no limit to the data usage patterns that we are seeing today with the explosive growth of internet. AT&T’s reliance on WiFi to offload its 3G network, since iphone usage threw out every simulation they did to build their network, is a prime example on how “one network fits all” sort of model will not survive the tremendous data growth the carriers will face moving forward. 3G networks still face a major challenge in that they haven’t yet figured out how to remove their overdependence from voice ARPUs while building these new expensive 3G networks primarily for data.

    Some of the dominant 3G players made similar statements about WiFi a decade ago. We all know how WiFi successfully created its own market and today is delivering unforeseen value and critical missing piece to broadband environment.

    Ashish Sharma
    Alvarion

    Twitter/assharma

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  9. As the latest trend in technology have fast changing, there would need to have latest updates on it.
    Thanks for this post who gives new ideas and information.

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  10. Be skeptical of anyone or any company touting 100 Mbps throughput on a mobile network. The underlying assumptions – 20 MHz channel, single user, optimal signal conditions (to support the highest order modulation), massive backhaul capacity, and limitless device battery life – are both practically and economically infeasible in the near future.

    LTE will have greater scale because it will dominate in the FDD spectrum that is much more widely available, and DO-A and HSPA operators can afford to wait. WiMAX will continue to perform well in TDD spectrum and its lead in perfecting the technology and a developing device ecosystem should not be underestimated.

    The article rightly points out that optimizing the three legs of the device stool – screen size, portability, and battery life – will be the key for mobile applications beyond laptops and netbooks. Aside from small differences in chipset pricing, LTE and WiMAX face identical hurdles in this regard.

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