Nortel Puts Another Nail in WiMAX Coffin

Nortel just announced it is discontinuing its WiMAX offering which was supplied by Israeli company Alvarion. The company says these moves will allow it to focus more effectively while better positioning itself in other areas where it is stronger.

This news comes as a further blow to WiMAX and follows up on earlier analysis today about the difficulty WiMAX is having in a slow global economy. The question worth asking is when will WiMAX make money for vendors/carriers if so many companies are pulling away from the standard?

After all, will new wireless carriers migrate to WiMAX while equipment providers are visibly pulling out? All the signs point to LTE becoming a strong standard with WiMAX becoming a niche play.

Moreover, in today’s device-happy world with touch-screen devices allowing consumers and business people to surf on the go, who wants a fast network which doesn’t have broad device support?

I don’t think it over for WiMAX yet though… If RIM or Apple adds WiMAX support to a popular device, we could see the market momentum shift. But service providers can’t turn on a dime when they are deploying equipment. There is a tremendous expense they need to absorb in switching between WiMAX and LTE.

Certainly this news just makes it more difficult for wireless providers to determine which standard to use and at next week’s 4GWE show in Miami, I look forward to discussing these issues with you in detail.

  • Carl Ford
    January 29, 2009 at 10:38 pm

    I think we have to think of Nortel’s dilemma as a sign of customer base and not WiMAX’s weakness. Candidly partnerships for Nortel are not as lucrative as companies like IBM with Thomson. Nortel is not a body shop anymore (if ever) with lots of systems integration talent.
    WiMAX is being damned unjustly as I hope we will see at 4GWE.

  • Rich Tehrani
    January 30, 2009 at 9:22 am

    Carl,
    Thanks for the comment but doesn’t it seem to you that momentum – once lost is very tough to get back? This seems to be the case whether it is just or unjust. As an example I present OS/2, the operating system IBM had on the table for the early 1990s.
    All analysts thought OS/2 was the future of computing but it never got the momentum and Windows never let up. It was slow and steady wins the race.
    I am not saying WiMAX is doomed but why is it unjustly damned? The companies once backing it are indeed bowing out – sometimes gracefully and sometimes not.

  • Dan
    January 31, 2009 at 8:56 pm

    Well, I guess this is bad news for Nortel WiMax users. If you live around Portland, Oregon and had this service give Clear a look. They offer their service in Portland, Oregon but plan on expanding elsewhere. Anyway, if you lost your Nortel WiMax service Clear http://www.clear.com/?utm_source=bc is a good alternative.

  • Carl Ford
    January 31, 2009 at 11:24 pm

    Rich,
    This is what I love with 500 deployments for WiMAX and 0 for LTE at the present time. I have a rough time believing the story is momentum. We can make a case for this being an ongoing battle. But remember, fundamentally the big difference is not the technology its the support of legacy.
    Should be an interesting year.

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