AT&T, VZW respond to Clearwire’s 4G spectrum taunts

Ever since Clearwire (NASDAQ:CLWR) acquired Sprint’s (NYSE:S) WiMax business, it has bragged about its spectrum position—with as much as 100 MHz in many markets—compared to its primary 4G competitors AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ, NYSE:VOD), which only have 12 MHz to 20 MHz of 4G licenses in most markets. Today AT&T and VZW executives, speaking at GSM Association long-term evolution (LTE) webinar, responded to Clearwire’s taunts, pointing out that there’s a lot more spectrum out there they could use for LTE when the time is right.

“You need to make sure you count all of our spectrum when you make these comparisons,” said Kris Rinne, AT&T senior vice president of architecture and planning.

If AT&T fills up its 700 MHz band, it has plenty of unused Advanced Wireless Service (AWS) spectrum to fall back on. And if that band, too, were to become full, AT&T has one of the country’s largest portfolios of cellular and PCS spectrum. That spectrum is all being used right now for 2G and 3G services, but as LTE demand grows, it makes perfect sense to convert high-speed packet access (HSPA) channels and GSM channels to LTE, which can much more efficiently deliver data capacity, Rinne said. “We will have the opportunity to re-utilize this spectrum in the future,” she said.

Verizon Wireless has also said that it would it start re-farming EV-DO carriers for 4G once the LTE network takes on the bulk of mobile broadband traffic, and it, too, has plenty of AWS spectrum lying fallow. During the webinar, Tom Sawanobori, VZW vice president of technology, said that the 700 MHz auction wasn’t the last chance for operators to get 4G spectrum, pointing specifically to the FCC’s recently announced plan to reclaim 120 MHz of broadcast spectrum over the next five years. Sawanbori added that it was just as important to look at the quality of the spectrum Verizon holds, not just the quantity. By using the high-propagation 700 MHz band, Verizon can build a much more dispersed network than Clearwire, whose WiMax networks operate at 2.5 GHz. That will save it both capital and time as it seeks to roll its LTE network out quickly, he said.

While 700 MHz indeed produces larger cells, that advantage lies primarily in coverage, not capacity. In urban areas, AT&T and Verizon will have to rein in their cell radii to account for the much higher traffic levels per cell.

Ultimately, LTE looks to be the clear winner in 4G wars in the US as well as globally, said GSMA director of technology Dan Warren. Though WiMax has the head start in the US, Clearwire only has half a million customers, accounting for 2% of the mobile broadband market, while EV-DO and HSPA hold the remaining 98%, Warren said, citing an Infonetics study. In 2014, WiMax’s market share will remain basically unchanged, according to the study, growing to 3% while LTE will account for 41% of mobile broadband connections.

Clearwire may be looking to gain some momentum next week at CTIA Wireless, which is held in one of Clearwire’s live 4G markets, Las Vegas. According to the Wall Street Journal, Clearwire’s investor and WiMax reseller, Sprint plans to introduce its first dual-mode 3G-WiMax handset at the event. Such a launch would be a coup for WiMax since the first LTE handsets aren’t expected until mid 2011.