Why the iPhone Is Bad for WiMAX

The battle for wireless supremacy was destined to heat up sometime, but it may commence far sooner than expected.

On Wednesday, AT&T (NYSE: T  ) upped its schedule for deployment of Long Term Evolution (LTE) from as late as 2012 to no later than 2011, GigaOm's Om Malik observed in a report in The New York Times.

LTE is better known as fourth-generation wireless or 4G, a network capable of transmitting voice and data at very fast speeds. Telecoms such as AT&T have been the primary backers of the technology, using it as a blunt instrument to keep the standard's chief competitor -- WiMAX -- at bay.

There are good reasons for Ma Bell to rush LTE. Malik cites competition with Verizon (NYSE: VZ  ) for the right to distribute Apple's (Nasdaq: AAPL  ) iPhone. He views LTE as the telecom equivalent of candy and flowers for subscribers.

"[AT&T] has so far been in complete denial about its network coverage," Malik wrote. "The limitations of its network were exposed during SXSW earlier this year." He's right. The walls of my basement office easily cripple my first-generation iPhone's signal.

That's troubling. And AT&T must be equally concerned about Sprint Nextel (NYSE: S  ) and Clearwire's (Nasdaq: CLWR  ) plans for a national WiMAX network that could support both computers and smartphones, leaving nothing for the telecoms.

Ma Bell has time -- Sprint and Clearwire are still very early in the rollout -- but there's no sense in ceding ground. And think about it: What's the best way to keep customers waiting for LTE, rather than making the leap to WiMAX? How about promising them an LTE-enabled iPhone?

Sprint, Clearwire, start sprinting. Ma Bell is coming for you.

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Fool contributor Tim Beyers had stock and positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is now officially overcaffeinated.


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  • Report this Comment On May 28, 2009, at 3:54 PM, Aryabod wrote:

    ATT can dream on, at the very earliest they would be able to roll out a 4G platform would be 2012, however you are right a little spin my keep their customers from ditching them. Sprint with its subsidary Clearwire will have a 4G platform in work that spreads its wings from Hawaii to New York by the end of this year, 2009. Sorry, but if the iPhone chooses to tether itself to the inferior 2.5G to 3G platform and spin from ATT that will be their choice. During this time the likes of Sprint with their 4G Pres will eat them alive. Spin needs eventual substance, not a promise 3 years down the road.

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