Timing Is Everything

The recent results of the India 4G spectrum auctions have de facto resulted in the market “going LTE,” so to speak.  This, of course, was a major bombshell for the WiMAX industry.  In essence, WiMAX saw India as a fantastic opportunity to salvage a future for the technology, and when the India auctions turned out the way they did … with a major victory for LTE-focused service providers, yet another nail was placed in the long-term coffin of WiMAX.

So why did India turn its attention toward LTE, after having trialed WiMAX for almost two years, and having seemed focused on WiMAX for 4G until recently?

The answer: Time.

The story begins with 3G actually.  The Telecom Regulatory Authority of India (TRAI) had to delay the auctions for spectrum back in 2008, because the government had trouble agreeing on the pricing structure for the rollout of 3G.

And the TRAI couldn’t very well initiate the 4G spectrum auctions right on the heels of the 3G spectrum, so rather than conducting the auction in early 2009, the auctions took place in 2010.

Essentially, the India market was frozen for almost two years, trying to get both 3G and 4G sorted out. 

What a difference two years make.

Two years ago, WiMAX had distinct advantages over LTE in: 1. Time-to-Market (TTM) and 2. Cost.

Once the auctions took place, the Time-to-Market advantage for WiMAX had shrunk.  What was once a two-year TTM lead is now six-nine months.   

Cost was also a major differentiator two years ago.  Now it is not.  In fact, our estimates are that in another six months, LTE cost will be on-par with WiMAX. 

So if you are an Indian service provider today, and you have been keeping up on the trends, you know that LTE is getting stronger and stronger.  And just as important, WiMAX has not evolved in a positive way. 

So the obvious question is:

When is that intersection point, when LTE surpasses WiMAX? 

I believe we are only six to nine months away.

It’s really remarkable.  We all know the old adage of “No one ever got fired for selecting Cisco.”  Well, two years ago, WiMAX was the Cisco of 4G.  Today, LTE is the Cisco of 4G.  And the recent auctions in India are the latest proof of that.

That didn't take much time at all, did it?

If I was a procurement manager making a multibillion dollar decision that will set the tone for the future of my company’s wireless business, I would be nervous about WiMAX. 

LTE is already the obvious and clear long-term winner.  But what the India auctions have shown is that LTE is also very close to ending the short-term battle as well.

It’s all a matter of time.

-Eran Eshed