With US cellular operator Sprint Nextel and WiMax provider Clearwire suspending their partnership to build a new nationwide wireless network using WiMax, the future looks precarious for the much-hyped technology that was supposed to revolutionise the mobile Web.
On Friday, Sprint Nextel and Clearwire announced that they had dissolved a deal signed in July to join forces and build a next-generation wireless network using WiMax technology. Together, the companies were supposed to share resources and the cost of deploying a new fourth-generation wireless network to reach about 100 million US users in the next few years.
While the companies have said they are still committed to building their networks separately, the news throws into question whether they'll have the money or shareholder backing to actually get the networks built. And without a nationwide network in one of the largest markets in the world, the WiMax revolution Stateside could come to a standstill.
"There will be a fourth-generation wireless technology," said Craig Mathias, principal analyst with Farpoint Group. "But WiMax was never a slam dunk as the clear winner. As a technology, there is nothing wrong with using WiMax, but I think the market will evolve slowly over a long period of time."
Still, companies like Intel, which is a technology partner of Sprint's and a financial supporter of Clearwire, say they will continue to roll out new WiMax products as planned.
"We are still moving forward with our next-generation Centrino chips for notebooks and our silicon for ultramobile PCs," said a spokeswoman for Intel. "We're disappointed that the agreement didn't work out, but we are committed to continue working with each of them on their WiMax initiatives."
Like so many other technologies that have come before it, WiMax has become a victim of over-hype. Many have described it as Wi-Fi on steroids, because of the fast broadband transmission speeds it can deliver.
But unlike Wi-Fi, which transmits in a radius of 25 feet to 100 feet, WiMax signals can travel miles, making it more similar to cellular-phone technology. And because WiMax uses wider frequency channels than current 3G wireless technology, it uses wireless spectrum much more efficiently, which should help reduce the cost per bit of delivering data over its network.
It's this combination of features that has fueled the hype machine that has turned WiMax from just another wireless technology in a carrier's toolbox into the savior for the wireless Web.
While no one disputes that WiMax is a useful technology, the real question is which markets it's best suited for. For example, most wireless experts agree that WiMax is hugely useful in developing countries, where little to no wireless or traditional telephone infrastructure exists.
But it's unclear whether the technology can become a major player in a developed market like the US, where regular broadband is plentiful and cheap and 3G wireless networks already blanket most major metropolitan areas.
Cisco Systems, which threw its hat into the WiMax ring last month when it
"We bought Navini to build networks for the emerging markets," said a spokesperson for Cisco. "In most developed markets, WiMax will be used selectively. But the developing world is a Greenfield opportunity. They don't have the infrastructure to begin with, so it's much easier to provide coverage in those areas than to try to fit into some existing wireless model."
Intel and Motorola also see opportunity in the developing world. But Joe Nardone, general director of Intel's WiMax team, said that WiMax is also an attractive technology for mature markets, which will eventually need more capacity than 3G technology will be able to deliver.
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There is a company in California with representation in Australia called Tropos. Tropos provided in-car communications to the San Mateo Poiice Force and has wireless penetration into many cities throughout the world. Perhaps any detractors might care to have a look at its site. It can do sensor interfacing to vehicular traffic systems and can even host wireless CCTV. It can also expand the range of GSM. It's worth looking at.