The main difference between the U.S. wireless industry and wireless services in many European countries is, and will continue to be, about spectrum. Whereas most European carriers use the same frequency bands (900 and 1800 MHz for GSM and 2100 MHz for UMTS), U.S. carriers use an assortment of radio frequencies.
AT&T Mobility (NYSE:T) uses 850 and 1900 MHz for GSM and UMTS; T-Mobile USA runs its 3G data network on 1700 MHz in the AWS band; Verizon Wireless (NYSE:VZ) uses the 850 and 1900 MHz bands for CDMA and EV-DO services; Sprint Nextel (NYSE:S) uses 1900 MHz. (And don't forget Sprint's iDEN network.) Consequently, there are few devices that can roam among these networks.
I bring this up in light of Clearwire's (NASDAQ:CLWR) decision to begin testing LTE in the 2.5 GHz-2.6 GHz spectrum band. While it appears that the global wireless industry is moving toward a single, standard 4G network technology, a Clearwire move to LTE will do little to change the fractured dynamic of the U.S. cellular landscape because Clearwire's LTE devices and services likely will be incompatible--at least initially--with other U.S. carriers' LTE offerings.
Verizon and AT&T will launch their LTE networks in separate blocks of the 700 MHz band (and will have their own roaming issues to deal with), and LightSquared's proposed wholesale LTE network--a hodgepodge of satellite and terrestrial spectrum--will operate in the 1.4 GHz and 1.6 GHz bands. Sprint, Clearwire's majority owner, could scramble the whole picture if it decides to add LTE to its 1900 MHz CDMA efforts. And MetroPCS (NYSE:PCS) appears to be headed toward LTE in the 1700 and 1900 MHz bands.
Moreover, Clearwire could put the issue into further complexity by choosing the TDD configuration of LTE (Clearwire said it will test LTE in both TDD and FDD configurations). Verizon and MetroPCS are both planning FDD LTE networks.
Thus, if all of these various LTE networks actually get built out in the United States, device vendors that want to provide LTE roaming to all of these networks would have to build (at the least) 700/1400/1600/1700/1900/2500/2600 MHz LTE phones. And they would have to throw in a bunch of other bands if they want those devices to be backward compatible with existing GSM and CDMA networks. And this is for service in the U.S. market only.
Clearwire's possible move to LTE "doesn't ensure interoperability," said Current Analysis analyst Peter Jarich. "The question is, does this help or make it easier to put in more radios? It's something vendors seem to have gotten very good at."
Indeed, some vendors are already planning for this fractured LTE future.
"The complexity of 4G designs brings a rich opportunity, not only for innovation, but for best in class performance. As an example, some of the carrier 4G requirements involve more than 12 bands, and technology challenges not seen in prior protocols," Novatel Wireless Chairman and CEO Peter Leparulo said during the company's recent quarterly conference call. Leparulo promised Novatel could address the situation, noting, "We have a long history of solving the complex problems involved in new protocols and capitalizing on wireless protocol upgrades."
I hope, for consumers' sake, that vendors will be able to bridge the spectrum divide. There may be a time in the future when U.S. consumers have devices that will be able to run multiple LTE frequencies. I just don't think it will be any time soon. --Phil