With WiMAX Punked, Is Verizon the New King of Mobile?

Too many have bet on wireless broadband standard WiMAX to see it retire into obsolescence before reaching maturity. But if a recent survey is to be believed, leading WiMAX proponents Clearwire (Nasdaq; CLWR) and Sprint Nextel (NYSE: S  ) are well behind rivals in delivering data at high speeds.

In more than 1,000 tests across New York City, BTIG Research found that HTC's Thunderbolt smartphone, operating on Verizon's (NYSE: VZ  ) LTE network, was nine times faster downloading data and five times faster uploading data than the EVO 4G smartphone, operating on Sprint's 4G WiMAX network. Boy Genius Report published the detailed results.

The news follows a report that the Thunderbolt is outselling the iPhone 4 in some locations. BTIG surveyed 150 Verizon stores selling both handsets and found that 28% had sold more Thunderbolts than iPhones. Only 11% of locations had sold more iPhones than Thunderbolts, while 61% had sold an equal amount of each, Computerworld reports.

The message? Speed matters to users, and in some cases they're willing to forgo Apple's iCandy to get it. That has numerous implications:

  • For Sprint, this means losing virtually all leverage in its pricing dispute with Clearwire or facing irrelevance as LTE marches toward mass deployment.
  • For AT&T (NYSE: T  ) , the results create additional pressure to finish backhaul upgrades that would allow fast smartphones to realize their full potential.
  • For Apple, consumers' speed cravings increase the risk of iPhone market-share losses. The next version of the handset, due in the fall, won't be LTE-ready.

And Verizon? It gets to play King of Mobile for at least a while -- good news for the more than 4,400 investors betting on a rally in Motley Fool CAPS.

Do you agree with them? Disagree? Let us know what you think about WiMAX, LTE, and Verizon's network versus those of its peers using the comments box below.

The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up-to-date news on companies such as Verizon, or any of its competitors. To get the latest Verizon news and analysis, add the company to your watchlist today:

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Apple and has written Apple puts. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is oddly worried about a hangnail. Don't ask us why.


Read/Post Comments (13) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 03, 2011, at 4:58 PM, conradsands wrote:

    You can hardly compare an LTE network with very little traffic on it at a certain cell site to a WIMAX network with a lot more customers. Wait until both systems are fairly loaded before passing judgment.

    Here's the type of news that Verizon is mostly known for ...

    Verizon Wireless pays $25M to end FCC fee probe

    Verizon Wireless has agreed to pay $25 million to the government to settle an investigation of the "mystery fees" it improperly charged millions of customers for data sessions they never intended to launch, the Federal Communications Commission said Thursday.

    The "voluntary payment," which the FCC said is its largest on record, comes on top of the refunds Verizon plans to issue to around 15 million customers. Those refunds will total at least $52.8 million, the FCC said.

  • Report this Comment On April 03, 2011, at 4:58 PM, conradsands wrote:

    AT&T and Verizon = The Most Expensive Wireless Plans in America. We know where Verizon (the 10th leading U.S. lobbyist) and AT&T (the 12th leading U.S. lobbyist) get all that money to run commercials 24x7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists to push the U.S. market into a wireless industry duopoly -- the American consumer.

  • Report this Comment On April 03, 2011, at 5:05 PM, Mulieh wrote:

    AT&T lost huge market share when they canceled their unlimited data plans. With the advent of nationwide 3G, and the looming prospective of a national 4G network by competitors, AT&T last "trump" card was the IPHONE market. The HTC Thunderbolt is a remark device and the Verizon LTE wireless broadband is now 2nd to none.

  • Report this Comment On April 03, 2011, at 6:31 PM, pryan37bb wrote:

    "New"?

  • Report this Comment On April 03, 2011, at 6:33 PM, donkuiken wrote:

    Every company has their headwinds (they come and they go). But, the bottom line is all the smart money out there today is investing in companies (like VZ) that are best of breed and have market share AND pay a huge dividend.

    There's too much b.s. and rheteric out here because the Shorts just want to either buy much cheaper or cover their mistakes! VZ is so mainstream that you need to put it in your portfolio and look at it in ten years and you'll be able to retire off of it!

    .

  • Report this Comment On April 03, 2011, at 9:30 PM, hunterintustin wrote:

    WiMax is not punk'd at all but has been available for quite some time and delivered good results. I have WiMax and LTE phones and modems and Verizon had many issues with their network in the last couple of weeks.

  • Report this Comment On April 03, 2011, at 11:21 PM, Jim98122x wrote:

    "AT&T lost huge market share when they canceled their unlimited data plans. With the advent of nationwide 3G, and the looming prospective of a national 4G network by competitors, AT&T last "trump" card was the IPHONE market. "

    Do you just make this stuff up? First off, the discontinuation of the UnLtd data plan has NOT cost AT&T large market share. In fact, just the opposite...very few. Secondly, do you seriously think Verizon won't discontinue their UnLtd plan too? Thirdly, not sure why you think differently, but AT&T is building out a 4G LTE network too, and is at most about 6 months behind Verizon overall. It will be a very long time before both companies have 4G everywhere. Till then, AT&T's 3G network is faster than Verizon's in many parts of the country. There are hardly any 4G phones out yet, and by the time there are, AT&T will have deployed a lot more of their own 4G network.

  • Report this Comment On April 04, 2011, at 12:39 AM, Aryabod wrote:

    Conrad is right, any network with few subscribers using it will show faster speeds. It is like a car driving at midnight with not traffic and one driving during normal hours. So if you want to compare networks I suggest you compare them under the same circumstances. BTW, the Thunderbolt and VZ's 4G network is not without its own flaws.

    On another note, WiMax has been around for a long time and is currently in 71 markets around the US. It performs very well, however it has yet to mature to its full potential. At the end of this year WiMax 2 will begin deployment with download speeds in excess of 100 Mbps and will be backwardly compatible with its legacy platform. The upgrade will come with no disruption of service and minimal costs. One should also note that Sprint and Clearwire have 150 Mhz of WiMax frequency available in the 100 most populated cities in America, which is a stark contrast to anything VZ or ATT/TMo possess. If we are to believe that spectrum is limited then it is easy to see why Sprint originally chose WiMax over LTE.

    Thanks to technology, WiMax and LTE radios can co-exist on bimodal chips, which IMHO gives Sprint a distinct advantage, with a virtual monopoly on 2500 Mhz spectrum and a respectable portfolio of 800 Mhz. Sprint's decision to deploy and incorporate LTE in their future plans speaks aplenty. What they are most probably intending to do is use their 800 Mhz spectrum in densely populated areas while leaving the 2500 Mhz for sparsely populated areas.

    What I am watching for is Sprint maintaining its current glidepath, adding Post Paid subs, lowering debt, continued improvements in its line up of Smart-phones and showing overall growth in its subscriber base.

  • Report this Comment On April 04, 2011, at 2:42 AM, joe951 wrote:

    I have a sprint Epic 4G. and i've speed tested it at 6+ mbps multiple times in Chicago, Atlanta, and Austin. Which is about 6x what that article claims sprint's 4g network gives. Its still slightly slower than the verizon LTE, but I would think there are a lot less people using the verizon LTE network since there is only one phone on it and it hasn't been out very long.

  • Report this Comment On April 04, 2011, at 10:19 AM, mtf00l wrote:

    I'm rooting for Sprint. I have been a long time customer and am now a shareholder as well. I decided it was time to back up my customer loyalty with share holder money.

  • Report this Comment On April 04, 2011, at 4:43 PM, baldheadeddork wrote:

    Where did you hear that the iPhone5 won't have LTE and won't be available until fall?

    Not being critical, but if that's true it's huge news.

  • Report this Comment On April 04, 2011, at 6:39 PM, TMFMileHigh wrote:

    @baldheadeddork,

    Several have reported on delays with iPhone 5, but nothing has been officially confirmed by Apple:

    http://www.techieinsider.com/news/7149

    Re LTE, you're right. I can't confirm the next iPhone won't have 4G. In fact, some sites are reporting that Apple's next handset is likely to be LTE-ready:

    http://www.geek.com/articles/mobile/iphone-5-4g-could-fall-r...

    My apologies for jumping the gun,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On April 28, 2011, at 7:39 PM, verylargelarry wrote:

    Worked customer service, tech support for IDEN (Nextel) network Blackberries beside the CDMA agents as the WIMAX conversions were first rolled out in the Baltimore area in 2008.

    WIMAX is dazzlingly fast. As it loads up with users, yes, it becomes merely very fast. Tower locations also impact users and rejiggering a tower for WIMA is not cheap. Substantial improvement over existing speeds however.

    Have no clue about what to expect with LTE save that they operate with the same limitations based on the physics and the finances of the matter.

    Sprint remains the (substantially) low cost option and for that reason I will be adding to my Sprint holding, especially after today's bump up.

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