Intel's WiMAX Office Closure Could Open Doors for TD-LTE

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Intel (intc) is reportedly closing its WiMAX Program Office in Taiwan, according to DigiTimes, causing concerns about adoption of the high-speed wireless technology. Taiwan’s vice economic minister Huang Jung-chiou played down the office closure, saying that WiMAX isn’t dead to the region but there are still options for WiMAX makers to migrate to a variation of the Long Term Evolution fourth generation standard called TD-LTE. Indeed, if WiMAX support is faltering, a transition to TD-LTE could ensue, given that the two 4G wireless technologies aren’t as incompatible as CDMA and GSM, for example.

Intel’s closure of the WiMAX office — and expected reallocation of the WiMAX resources to other internal wireless, computer or sales groups — follows a string of other speed-bumps the chipmaker has faced with its WiMAX bet. Last January, Intel took a $950-million write down on its WiMAX investment in Clearwire (s clwr). And last month, Dutch WiMAX-operator WorldMax announced it would soon shut down its network — a network started in August 2006 with a $37 million investment from Intel Capital and Enertel Holding. Aside from the up-front investment losses, every WiMAX network closure hurts Intel’s potential revenue from the WiMAX chips it builds.

But there’s hope for network operators and customers using those networks if WiMAX doesn’t pan out in some countries. A relatively smooth transition to TD-LTE is possible. As noted in a recent GigaOM Pro report (subscription required), since LTE and WiMAX are both OFDM technologies, the underlying equipment shares about 75 to 80 percent of the same infrastructure. Such similarities are allowing some telecoms in other areas of the world to hedge their bets — KDDI in Japan has tested transitional equipment — while analysts expect Clearwire in the U.S. to use TD-LTE if it switches from WiMAX.

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Jeff Pinkham

It is sad that Intel could not make more of its first mover advantage in 4G. It looks like LTE will have a near monopoly. I was in Malaysia where Green Packet rolled out a wimax solution with investment from Intel. It was slow rollout and now many operators will hesitate. I nearly waited for HTC 4G evo phone to become available in Europe. Glad I plumped for the Desire. I’m concerned that LTE will stiffle innovation as incumbent operators will crowd the market with overpiced offerings.

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