Intel's Losing Big Money on WiMAX

Two WiMAX networks backed by Intel have failed, delivering a blow to the WiMAX standard, but also to Intel and its venture capital arm. Intel, which has invested billions in WiMAX networks in order to encourage the spread of the technology and boost demand for the company’s chips, has already had to write down almost a billion dollars from its investment in Clearwire, which is still operational.

Worldmax, a Dutch WiMAX operator, said today that it will shutter its Amsterdam network by Aug. 1 because its network has been causing problems for military satellite signals that broadcast in a nearby frequency range. Worldmax was founded in August 2006 by Intel Capital and Enertel Holding, which had contributed $37 million to create the network, according to TeleGeography Research. Plans for the move come a week after UK WiMAX operator Freedom4 (also backed by Intel Capital) shut down following the sale of its WiMAX spectrum to UK Broadband for some $18.5 million.

WiMAX may be faltering, but as I write in a GigaOM Pro article published this morning (subscription required), it won’t entirely disappear. Operators with lower average revenue per user will likely continue their WiMAX operations, while many others will turn to a variation on the Long Term Evolution radio standard, which uses the unpaired spectrum that many WiMAX operators have.

That variation, called TD-LTE, will be both a bullet for many WiMAX networks as well as a bridge to get most of the world on some form of the LTE standard for 4G mobile broadband. It offers a relatively smooth transition for companies such as Clearwire and Russsian WiMAX operator Yota, as well as a path to LTE for Chinese and Indian operators with spectrum in the 2.5 and 2.3 GHz bands. For more on the technology, the operators deploying it and the considerations those operators must take into account, read the full analysis.

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