Why TDD-LTE is an omen for consolidation of WiMAX ISPs into the MNO fold

by Terry Norman

One of things that the industry is predicting will happen over the coming years is the migration of WiMAX operators to TDD-LTE. There are a number of reasons for this

In many cases, WiMAX ISPs operate as the single provider in the BWA market segment. However, the emergence of TDD-LTE has focused some MNOs’ attention on the opportunities of providing a wireless data service to non-mobile subscribers.

Many traditionally FDD MNOs have unpaired spectrum in their spectrum inventories. In some cases, spectrum was acquired cheaply at auction. For example, many MNOs acquired unpaired UMTS spectrum in the early 2000s and have not deployed any network using that spectrum since then.

Now many operators are deploying dual TDD/FDD LTE networks and targeting different market segments with each.

Operating dual mode LTE networks allows MNOs to manage network traffic by routing heavy BWA/FWA/MBB users onto the TDD network, while keeping lower data users (i.e. handset users) onto the FDD network. For example, Sweden's 3 operates a dual TDD/FDD LTE network. Its website states, “We use both FDD and TDD frequencies in the 4G network and this enables us to control data traffic depending on whether you are browsing on a mobile/tablet or via modem/router” [Link].

WiMAX ISPs, even those that are planning to quickly migrate to TDD-LTE, can expect greater competition intensity in the BWA/FWA/MBB market segment. It will be increasingly difficult for these ISPs to compete with the traditional MNOs - the Goliaths of wireless telecoms - and we should expect some consolidation to take place. Indeed, there is some evidence to suggest that this is already happening. Below are a few indicators:

  • Australia: MNO Optus will deploy FDD-LTE in the 1800MHz band, but it has also completed the $230 million acquisition of local WiMAX operator Vivid Wireless with the intention of using its 98MHz of 2.3GHz spectrum for a supplementary TDD-LTE network that will have higher throughput and higher capacity - suitable for supporting heavy BWA/FWA/MBB traffic.

  • Japan:  In October 2010, Softbank gained control of Willcom Inc. Willcom was a PHS operator. However, Softbank repurposed Willcom’s spectrum for TD-LTE. This acquisition enabled Softbank to address the BWA market segment through Willcom. WiMAX ISP UQ Communications previously dominated this market segment. However, Willcom has carved out about 25% market share in this space in a relatively short space of time (see chart).

Chart 1: Subscriber numbers for BWA market segment, Japan, December 2010 – February 2013 (Source: Telecommunications Carriers Association, Wireless Explorers)

  • Kazakhstan: TeliaSonera, controls Kazakhstan's largest MNO, KCell. In August 2012, TeliaSonera entered into a conditional agreement to acquire the WiMAX operations of the Kazakh company Alem Communication, which operates its WiMAX network in the 2.5/2.6GHz band.
  • United States: SoftBank's attempt to acquire Sprint and its WiMAX affiliate, Clearwire, suggests that it has plans to replicate its dual TDD/FDD-LTE approach in the United States, in addition to its home market.

To discuss opportunites for traditional MNOs in the WiMAX space and/or the implications of TDD for WiMAX operators - contact Wireless Explorers at info@wirelessexplorers.com.