Pondering 2010, it's clear that it was the year of mobile broadband. Smartphone growth continued its amazing trajectory, data revenues jumped, operators focused on ways to ease network congestion, LTE made its appearance and the "4G" marketing wars began.
For the WiMAX community, it wasn't the best year. Some major operator backers showed waning interest in the technology, while LTE gained momentum. Clearwire (NASDAQ:CLWR) and Sprint Nextel (NYSE:S) began rolling out WiMAX in 2008 aiming to have a significant head start over Verizon Wireless. But it didn't turn out that way. Verizon Wireless launched LTE in 38 major markets on Dec. 5, while Clearwire/Sprint have 68 markets, many of them smaller.
Clearwire struggled with financing and with the differing priorities of its owners, including Sprint, Comcast and Time Warner, who believed Clearwire wasn't moving fast enough to roll out major markets such as New York and Los Angeles, both of which came online near the end of 2010. Interestingly, Clearwire announced a $1.33 billion debt offering the day after Verizon launched its LTE service.
The WiMAX camp also had its hopes pinned on wireless broadband licensee winners in India. A major entrance there would ensure longevity for the standard. The jury is still out, but the lone nationwide licensee, Reliance Industries indicated plans to build out a network based on TD-LTE--despite the fact that TD-LTE networks won't be ready until the second half of 2011. Meanwhile, Qualcomm and Ericsson demonstrated a TD-LTE network in the region and have been lobbying license winners heavily to wait for TD-LTE.
What may boost WiMAX going forward is the fact that vendors are selling base stations capable of transmitting both WiMAX and TD-LTE, which future-proofs WiMAX investments. Barrett Xplore in Canada is deploying WiMAX nationwide and has the option of moving to TD-LTE. WiMAX didn't get a significant boost either from the broadband stimulus awards, which primarily went to fiber-based middle-mile projects. Meanwhile, WiMAX is thriving in niche markets, such as the smart grid and municipal deployments, as chip prices have fallen.
The network capacity crunch continued to make headlines as data continued to grow exponentially. The U.S. wireless data services market grew 7 percent quarter-over-quarter and 25 percent year-over-year in the third quarter 2010 to surpass $14 billion in revenues, according to advisory firm Chetan Sharma Consulting. Chetan Sharma adds that data consumption per device is expected to average 325 MB a month by year end, up 112 percent over 2009 and behind only Sweden in respect to per-capita mobile data consumption worldwide. The U.S. also leads in smartphone sales, as smartphones accounted for 47 percent of devices sold nationwide in the third quarter, compared to 24 percent worldwide.
As such, operators are embarking on changes such as data offload onto WiFi, policy management and usage-based pricing, to name a few. Usage-based pricing reared its head in June, with AT&T Mobility (NYSE:T) firing the first salvo, ending unlimited data pricing plans for smartphones. Verizon Wireless followed suit with a lower-priced tier but kept its unlimited plan, as did T-Mobile. As expected, Verizon Wireless (NYSE:VZ) launched LTE with usage-based plans: $50 for 5 GB or $80 for 10 GB, with $10 per GB overage charge. It's clear Verizon Wireless wants to keep LTE a premium service.
Meanwhile, much debate has emerged over the term "4G" and the fact that mobile operators are applying it to their various flavors of high-speed data networks--despite the fact that none of today's technologies is officially 4G. Sprint Nextel and Clearwire call it WiMAX 4G, T-Mobile USA now brags that its HSPA+ network is the largest 4G network in the country, MetroPCS (NYSE:PCS) calls its slower LTE network 4G and Verizon Wireless came to market this month using the marketing term "4G LTE."
The wireless carrier industry was pleased this year with FCC Chairman Genachowski and his aggressive move toward finding more spectrum for wireless broadband services. He recognized that wireless Internet access will be key to making America more technologically competitive. As a result, the FCC outlined in the national broadband plan the need for an additional 500 MHz of spectrum within the next decade and made a number of rulings to free up spectrum, such as approving white-space spectrum and moving forward with a plan to reallocate spectrum from the TV broadcast industry.
Finally, Chinese vendor Huawei continued to be a thorn in the side of the wireless infrastructure vendor community. Huawei is leading the initial wave of LTE contracts globally, winning 35 percent of commercial LTE contracts so far. That number is more than twice the number of its rivals, according to research by TeleGeography. (Ericsson still leads in revenue booked despite winning 16 contracts). Big contracts in the U.S. market, however, remained elusive in 2010 amid mounting skepticism from U.S. lawmakers worried about national security should Huawei handle infrastructure for a major U.S. operator. These worries reportedly hampered Huawei's ability to secure a multi-billion dollar network modernization contract from Sprint Nextel. Those awards went to Ericsson (NASDAQ:ERIC), Alcatel-Lucent (NYSE:ALU), and Samsung.
It's not that hard to predict that mobile broadband will continue its wild ride. In 2011, I'm looking forward to LTE smartphones, more innovative mobile broadband pricing and some really cool connected devices.--Lynnette
P.S. FierceBroadbandWireless will be on a publishing break through the holiday season. We will be back in your inbox on Monday, Jan. 3. Merry Christmas and Happy New Year!