Nortel to pursue LTE, passes WiMAX business to Alvarion: WiMAX patent holders team to spur market amid industry upheavals

The pace of action on the world’s infrastructure stage has increased over the past several months, with a number of major carriers announcing multibillion-dollar buildout plans, intellectual property owners realigning their stances, and infrastructure vendors desperately trying to keep up with it all.
The larger question though is how the battle between LTE and WiMAX will play out. With AT&T Mobility and Verizon Wireless aligning with LTE and Sprint Nextel Corp. and Clearwire Corp. betting on WiMAX, vendors too may be pressed to choose sides in the race to 4G.
Nortel Networks Corp. made its choice last week; the company announced it will offload its WiMAX business to Alvarion Ltd. in favor of developing LTE. Terms of the deal were not disclosed.
Nortel said it will focus on LTE “to meet a demand that is emerging faster than the industry originally predicted.”
Specifically, the deal involves the integration of Alvarion’s radio access network technology with Nortel’s core network solutions, backhaul solutions and applications such as VoIP.
“For someone like Nortel, who was expected to be a major player in mobile WiMAX, to abandon development raises questions about the overall market opportunity,” wrote Oppenheimer analyst Ittai Kidron. “Simply put, this could be viewed as a signal that Nortel doesn’t expect the WiMAX market to develop as it once thought and that its efforts are better spent on LTE development.”
For its part, Alvarion crowed about the partnership, its newly strengthened position, and the WiMAX opportunity in general.
“This is an outstanding example of open WiMAX in practice, and we think our combined capabilities (with Nortel) can accelerate the growth of the entire WiMAX market.” Said Tzvika Friedman, Alvarion’s CEO, pointing out that WiMAX has proven itself in more than 200 commercial deployments for Alvarion.
Others seem to agree on the relative benefits of WiMAX.
“While early WiMAX network coverage will not be as large as 3G cellular, it will be adequate to appeal to consumers,” said Daryl Schoolar, In-Stat analyst, citing findings from the firm’s recent survey of U.S. wireless users. “When respondents were presented with service examples and picked the one they most preferred, the one representing WiMAX was picked more than two-to-one over the one representing 3G cellular data.”
And while vendors begin positioning between LTE and WiMAX, proponents for both technologies are working to smooth the patent-licensing situation. Last week, a group of WiMAX patent holders – following in the footsteps of LTE proponents -announced a plan they hope will entice WiMAX device vendors to jump into the market with both feet.
Alcatel-Lucent, Cisco, Clearwire, Intel Corp., Samsung Electronics Co. Ltd. and Sprint Nextel announced the Open Patent Alliance for WiMAX. The companies said the group will pool its WiMAX patents “to help participating companies obtain access to patent licenses from patent owners at a predictable cost.”
The effort follows a similar move earlier this year by a group of LTE vendors comprising Alcatel-Lucent, L.M. Ericsson, NEC Corp., NextWave Wireless Inc., Nokia Corp., Nokia Siemens Networks and Sony Ericsson Mobile Communications.